Document:

Exhibit 10.2

 

	
  

  	
   

  	
   

   

   

  185 Berry Street

  Suite 4800

  San Francisco, CA 94107

  p: 415.659.3500

  f: 415.659.0007

  

 

April 9, 2008

 

Kurt J. Van
Wagenen

31 Huckleberry
Road

Hopkinton, MA
01748

 

Re: Signing
Bonus

 

Dear Kurt,

 

FiberTower
Corporation (“we” or the “Company”) is pleased to confirm this offer to you of
the following Signing Bonus.  In
connection with your entering into the employment agreement with the Company of
even date herewith (the “Employment Agreement”), we agree to:

 

(i)                                     pay
you a cash signing bonus of $666,667 on April 9, 2010 if you remain
employed by the Company as Chief Executive Officer on such date; and

 

(ii)                                  pay
you an additional cash signing bonus of $333,333 on April 9, 2011 if you
continue to remain so employed on such date.

 

If on or
before April 9, 2011, (a) a Change of Control occurs, (b) we
terminate your employment as Chief Executive Officer of the Company without
Cause, or (c) you terminate your employment as Chief Executive Officer of the
Company with Good Reason, any amounts not yet paid to you under clauses (i) and
(ii) above shall become immediately due and payable. In the event of your
death or disability (as defined in Section 5(b)(i) of the Employment
Agreement) prior to April 9, 2011, within 10 business days after your
death or receipt of the Company’s notice of your termination for disability
pursuant to Section 5(b)(i) of the Employment Agreement, the Company
will pay you or your estate an amount equal to (A) the product of (x) the
sum of the payments under clauses (i) and (ii) above, multiplied by (y) the
Pro Rata Factor, minus (B) any amounts previously paid under clauses (i) and
(ii) above.  The “Pro Rata Factor”
shall equal a fraction, the numerator of which is the number of days that have
elapsed since April 9, 2008 to the date of your death or the Company’s
determination of your total disability, and the denominator of which is the
number of days from April 9, 2008 to April 9, 2011.

 

For purposes
of this Signing Bonus Agreement, “Change of Control” shall have the meaning specified
in Section 5(h) of the Employment Agreement.  Notwithstanding the foregoing, to the extent
necessary to comply with Section 409A, in the case of any payment

 

 

under this Signing Bonus Agreement that in the determination of the
Company would be considered “nonqualified deferred compensation” subject to Section 409A
and as to which, in the determination of the Company, the requirements of Section 409A(a)(2)(A)(v) would
apply, an event or occurrence described above shall be considered a “Change of
Control” only if it also constitutes a change in ownership or effective control
of the Company, or a change in ownership of the Company’s assets, described in Section 409A(a)(2)(A)(v).

 

For purposes
of this Signing Bonus Agreement, “Cause” shall have the meaning specified in Section 5(c) of
the Employment Agreement, and “Good Reason” shall have the meaning specified in
Section 5(e) of the Employment Agreement.

 

All
compensation under this Signing Bonus Agreement is subject to applicable tax
withholding requirements, and the Company may withhold from amounts otherwise
payable hereunder such amounts or require you to pay to the Company the amount
of applicable withholding taxes. In addition, you are solely responsible for
all taxes that result from your receipt of benefits hereunder.

 

To the extent
that any payment under this Signing Bonus Agreement is deemed to be deferred
compensation subject to the requirements of section 409A of the Code, this Signing
Bonus Agreement shall be operated in compliance with the applicable
requirements of section 409A of the Code and its corresponding regulations and
related guidance with respect to subject payment.  If you are a “key employee,” as defined in
section 416(i) of the Code (without regard to paragraph 5 thereof), except
to the extent permitted under section 409A of the Code, no benefit or payment
that is subject to section 409A of the Code (after taking into account all
applicable exceptions to section 409A of the Code, including but not limited to
the exceptions for short-term deferrals and for “separation pay only upon an
involuntary separation from service”) shall be made hereunder on account of
your “separation from service,” as defined in section 409A of the Code, with
the Company until the later of the date prescribed for payment under this Signing
Bonus Agreement and the first day of the seventh calendar month that begins
after the date of your separation from service (or, if earlier, the date of
your death).  Any such amounts shall be
aggregated and paid in a lump sum, with interest, based on the prime rate as
set out in The Wall Street Journal.

 

This Signing
Bonus Agreement is entered into in conjunction with and shall be construed
along with the Employment Agreement to govern the employment relationship
between you and the Company.  This
Signing Bonus Agreement and the Employment Agreement supersede any prior
discussions or agreements between you and the Company relating to your
employment by the Company.  In the event
of a conflict between the terms of this Signing Bonus Agreement and those set
forth in the Employment Agreement, the terms of the Employment Agreement will
prevail.  The provisions of this Signing
Bonus Agreement shall be governed by the laws of the State of Delaware.

 

Please sign
the enclosed copy of this letter in the space indicated and return it to me to
indicate your agreement to the terms of this Signing Bonus Agreement.

 

2

 

	
   

  	
   

  	
  Sincerely,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FIBERTOWER CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ John D. Beletic

  
	
   

  	
   

  	
   

  	
  John D.
  Beletic, Chairman of the Board

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted and agreed this 9th day of April, 2008

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Kurt J.
  Van Wagenen

  	
   

  	
   

  
	
  Kurt J. Van
  Wagenen

  	
   

  	
   

  

 

3Exhibit 10.1

 

SETTLEMENT AND RELEASE AGREEMENT

 

This Settlement and Release Agreement (this “Agreement”) is made
and entered into freely and voluntarily the 9th day of April 2008, by and
between Meritage Homes Corporation (hereinafter referred to, collectively with
all of its subsidiaries and affiliates, as “Meritage”) and John R.
Landon (hereinafter referred to as “Landon”). Landon and Meritage shall
be referred to collectively as the “Parties.”

 

WHEREAS,  Landon
and Meritage are parties to that certain Employment Agreement, effective as of July 1,
2003, as amended from time to time (the “Employment Agreement”);

 

WHEREAS,  Landon
and Meritage are Parties to certain other agreements, executed on or about June 12,
2006, which are a Stock Purchase Agreement (the “Stock Purchase Agreement”),
a Cooperation Agreement (the “Cooperation Agreement”), and a Settlement
Agreement and Mutual Release and Waiver of Claims (the “2006 Settlement
Agreement”) (the Employment Agreement, Stock Purchase Agreement,
Cooperation Agreement and 2006 Settlement Agreement shall be referred to
collectively as the “Existing Agreements”); and

 

WHEREAS,  certain
disputes have arisen between the Parties in which both Parties have made claims
against the other, as are set forth in the pleadings of the arbitration between
the parties before the American Arbitration Association, Case No. 71 166
00081 07 (the “Arbitration”);

 

WHEREAS,  without
admitting any liability to the other, the Parties wish to enter into a final
and amicable agreement to dispose of their outstanding controversies;

 

NOW, THEREFORE,  in
consideration of the acts, payments, covenants, and mutual agreements herein
described and agreed to be performed, Landon and Meritage agree as follows:

 

1.                                      Mutual Releases and Covenant
Not to Sue.

 

(a)           In consideration of
the matters referenced in this Agreement, John R. Landon, Eleanor Landon,
Landon Development Company, LLC, Landon Homes, L.P., Landon Family Partnership,
L.P. (“the Landon Parties”) on behalf of each of themselves and their respective
heirs, executors, administrators, and assigns, hereby forever release,
discharge, cancel, waive, and acquit Meritage and its subsidiaries, affiliates,
agents, officers, owners, directors, employees, insurers, and assigns, of and
from any and all rights, claims, demands, causes of action, obligations,
damages, penalties, fees, costs, expenses, and liabilities of any nature
whatsoever, whether in law or equity (collectively, “Claims”), which the
Landon Parties have, had, or may hereafter have against Meritage arising out
of, or by reason of, any cause or matter, existing as of the date of execution
of this Agreement, WHETHER KNOWN TO THE LANDON PARTIES AT THE TIME OF EXECUTION
OF THIS AGREEMENT OR NOT, that relate to matters occurring since the date of the
2006 Settlement Agreement, including, without limitation, the matters subject
to the Arbitration. This release shall not apply to (i) any breaches by
Meritage of this Agreement or the Existing Agreements (as modified hereby)
arising from events or occurrences on or after the date this Agreement (ii) any
vested amounts in Landon’s

 

 

401(k) account or (iii) any right to indemnification,
advancement of expenses, limitation of liability or exculpation of liability to
the extent provided under or arising from the Articles of Incorporation or
Bylaws of Meritage or under any insurance policy maintained by Meritage
benefiting Landon with respect to his service as an officer, employee, or
director of Meritage.

 

(b)           In consideration of
the matters referenced in this Agreement, Meritage, on behalf of itself and its
subsidiaries, affiliates, agents, officers, owners, directors, employees,
insurers, and assigns, hereby forever releases, discharges, cancels, waives,
and acquits the Landon Parties and their respective agents, officers, owners,
directors, employees (including without limitation Michael J. Gavin and Jim
Arneson) from any and all Claims existing as of the date of the execution of
this Agreement, WHETHER KNOWN TO MERITAGE AT THE TIME OF EXECUTION OF THIS AGREEMENT
OR NOT, that relate to matters occurring since the date of the 2006 Settlement
Agreement (or, with respect to Eleanor Landon, prior to the date of this
Agreement), including, without limitation, the matters subject to the
Arbitration. This release shall not apply to any breaches by Landon of this
Agreement or the Existing Agreements (as modified hereby) arising from events
or occurrences on or after the date of this Agreement.

 

(c)           The Landon Parties
and Meritage further covenant and agree not to institute, nor cause to be
instituted, any legal proceeding of any nature whatsoever, including, without
limitation, filing any claim or complaint with any government agency alleging
any violation of law or public policy or seeking workers’ compensation from Meritage
or Landon (or any of their representatives) for any claim released hereunder
premised upon any legal theory or claim whatsoever, including without
limitation, contract, tort, wrongful discharge, personal injury, interference
with contract, breach of contract, defamation, negligence, infliction of
emotional distress, fraud, or deceit, except that a party hereto may file a
legal proceeding against the other solely to enforce the terms of this
Agreement or the Existing Agreements (as modified hereby).

 

(d)           Meritage releases
Arneson from the obligation in paragraph 6(a) of his Separation and
Severance Agreement, dated, accepted and delivered by Mr. Arneson on July 27,
2006, such that paragraph 6(a) applies only to persons employed by
Meritage as of the date of this Agreement.

 

2.             Principal
Economic Terms and Related Matters.

 

(a)           Simultaneously with
the execution of this Agreement, Landon will pay to Meritage the sum of
$2,701,613.00 in cash. All payments to be paid by Landon to Meritage under this
Section 2 shall be paid by wire transfer on or before the close of
business on April 10, 2008 pursuant to the wiring instructions set forth
on Exhibit C to this
Agreement.

 

(b)           On or before January 5,
2009, Landon will pay to Meritage an additional sum of $875,000.00 in cash,
Meritage stock, or a combination of both; provided, however, Meritage shall
have the right to demand the payment in cash if it determines based on the
advice of its securities counsel, independent accountants or financial advisors
that the receipt of Meritage stock from Landon would (i) require Meritage
to obtain a fairness opinion, (ii) be prohibited or result in an adverse
effect under Meritage’s then existing loan agreements, credit agreements or
indentures pursuant to which Meritage has outstanding borrowed money, (iii) in

 

2

 

Meritage’s
reasonable determination, result in adverse accounting or tax implications, (iv) in
Meritage’s reasonable determination, be viewed unfavorable by the investment
community, or (v) have any adverse impact on a pending or contemplated
significant transactions, including but not limited to, a debt offering,
implementation, renewal or modification or a credit agreement, merger,
acquisition or equity offering (common or preferred). To the extent that
Meritage stock is paid by Landon, Landon shall deliver the number of shares
equal to the result of dividing the dollar amount to be paid in stock by the
closing price of Meritage common stock the day prior to the delivery date
(rounded to the nearest whole share).

 

(c)           Landon hereby releases any claim, rights or interest that he may have
to the amounts held in escrow at Guaranty Bank, Dallas, Texas, account number ***
and agrees that Meritage shall be solely and immediately entitled to all funds
in that account. Landon shall within two (2) business days of a request by
Meritage sign any documents that may be required by Guaranty Bank in connection
with the release of such funds; provided, however no such document shall require
Landon to assume any liability. The parties agree that Landon’s execution of
this Agreement shall constitute instructions to Guaranty Bank to release all
funds in the account to Meritage and that no further escrow instructions are
necessary or required from Landon.

 

(d)           Landon hereby acknowledges that Meritage has no obligation to pay Landon
any additional compensation, severance, non-competition, benefits or payments
or other consideration of any kind under this Agreement or any of the Existing
Agreements (as modified hereby).

 

(e)           The Parties hereby amend the Cooperation Agreement as follows:

 

(i)            Paragraph 2 of the Cooperation
Agreement is modified by deleting the phrase “upon termination of the
Restriction Period (as such term is defined in the Employment Agreement)” and
substituting, “ on April 10, 2010”;

 

(ii)           The following text is added to the
end of Paragraph 5(b)(ix) before the words “provided that”: “in
furtherance of, or in relation or with respect to, the actions prohibited by
clauses (i) through (viii) above”;

 

(iii)          The following sentence is added to the
end of paragraph 5(b): “For the purposes of Section 5(b)(iii) hereof,
as of any point in time, ‘extraordinary transaction’ does not include
transactions solicited, invited or widely proposed by Meritage to homebuilding
industry participants (including offers to sell real property).”

 

(f)            The Parties hereby amend the Employment
Agreement as follows:

 

(i)            Section 8 of the Employment
Agreement is deleted in its entirety and replaced with the following:

 

8.                                       Restrictive Covenant. In consideration of Executive’s employment
and in consideration of the acts, payments, covenants and mutual agreements
described and agreed to be performed by the Settlement and Release Agreement
dated April 9, 2008 and the Existing Agreements (as defined therein and
modified thereby):

 

***     CONFIDENTIAL
INFORMATION HAS BEEN OMITTED

 

3

 

A.                                   Through April 9,
2010, neither Executive, either personally or as an officer, director, partner,
member, manager, employee, agent, or consultant of any entity, nor any “Landon
Company” (as hereinafter defined) or any “Affiliate” (as hereinafter defined)
of a Landon Company will “Hire” (as hereinafter defined) any “Meritage Employee”
(as hereinafter defined). Notwithstanding the foregoing, (i) if Executive
hereafter becomes a full time employee of a Large Homebuilder (as hereinafter
defined), the restrictions set forth in this Section 8(A) will not
apply to any Meritage Employee Hired by the Large Homebuilder that is not a
Covered Officer and (ii) upon notice from the Company, Executive shall
have 30 days to cure any inadvertent breaches of this Section 8(A) and
the Meritage Employee is not a Covered Officer (as hereinafter defined).

 

As used herein:

 

“Landon
Company” means any entity owned by Executive, his spouse, or his
children. The term “own” refers to record or beneficial ownership of at least a
5% interest in the entity.

 

“Affiliate”
means with respect to any Person (as hereinafter defined), any other Person
that directly, or indirectly through one or more intermediaries, owns or is
owned by or is under common ownership with the Person specified. The terms “owned”
and “ownership” refer to record or beneficial ownership of at least a 5%
interest in the entity.

 

“Person”
means any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership or other entity.

 

“Meritage
Employee” means any person who is employed by the Company as of April 9,
2008 or otherwise becomes employed by the Company on or before April 9,
2010; provided, however, Meritage Employee shall not include any person who was
terminated by the Company after April 9, 2008.

 

“Hire” means to engage the services of another as a full or part
time employee, independent contractor or consultant. “Hire” also includes
entering into any partnership, joint venture, or other entity formed for
developing, constructing, financing, or selling any land, lot, or home.

 

“Covered
Officer” means (i) Meritage Employees whose most recent title,
office or authority was that of Vice President, Executive Vice President,
Divisional President, or Regional President or higher and (ii) up to ten (10) additional
Meritage Employees to be designed by Meritage in writing to Executive by April 14,
2008 (the persons so designed by Meritage, the “Designed Employees”).

 

“Large
Homebuilder” means a corporation, partnership, limited liability
company, or similar entity, that is engaged in the business of homebuilding,
construction or

 

4

 

land or lot development and has annual revenues from homebuilding
operations (based on such company’s 2007 fiscal year end) of more than $400
million.

 

B.                                     Through April 9,
2010, neither Executive, either personally or as an officer, director, owner,
partner, member, manager, employee, agent, or consultant of any entity, nor any
Landon Company or any Affiliate of a Landon Company will engage in any (i) “Advertising”
(as hereinafter defined), or (ii) transaction involving the acquisition,
sale, development, construction, finance, lease, land banking or lot banking of
any land, lot, or home (a “Prohibited
Transaction”), in each case with respect to clause (i) and (ii) within
or pertaining to the “Communities” identified on Exhibit A to the
Settlement and Release Agreement dated April 9, 2008. Following are
exceptions to the foregoing restrictions:

 

1.                                       After July 9,
2009, Executive may enter into a purchase or option contract for the acquisition
of lots within the Communities identified on Exhibit A
to the Settlement and Release Agreement provided that Executive may
not prior to April 10, 2010 close the acquisition of such lots or begin
construction of or on such lots (construction being defined as any
construction, physical development or physical improvement activities of any
kind other than applying for or obtaining a building permit);

 

2.                                       If Executive
hereafter becomes a full time employee of a Large Homebuilder, the restrictions
set forth in this Section 8(B) will not apply to any transaction
pertaining to the Communities insofar as it involves the Large Homebuilder;

 

3.                                       If Executive
hereafter becomes a full time employee or majority owner of a Small Homebuilder
(as hereinafter defined), the restrictions set forth in this Section 8(B) shall
not apply to any transaction pertaining to the Communities insofar as such
transaction involves the Small Homebuilder occurring before the time Executive
becomes the employee or majority owner of the Small Homebuilder but, for the
avoidance of doubt, the restrictions set forth in this Section 8(B) will
apply to any transactions occurring on, after or in contemplation of or
connection with, Landon becoming the employee or majority owner of the Small
Homebuilder; and

 

4.                                       Upon notice from
the Company, Executive shall have 10 days to cure any inadvertent breaches of
clause (i) of this Section 8(B) provided that Executive and his
Affiliates did not cause or induce such breach.

 

With respect to Exhibit A,  by
April 30, 2008, Meritage shall provide specific descriptions or depictions
of the geographic boundaries of the Communities, such as maps, plats, metes and
bounds, legal descriptions, addresses, aerial photographs, drawings, or other
information sufficient to generally identify the location and boundaries of the
property.

 

5

 

As used herein:

 

“Advertising” means marketing or advertising activities or
materials occurring on or adjacent to the Communities identified on Exhibit A to the Settlement and
Release Agreement or any newspaper or print advertising relating thereto, which
refer to or describe the Communities identified on Exhibit A to the Settlement and Release Agreement.

 

“Small Homebuilder” means a corporation, partnership, limited
liability company, or similar entity, that is engaged in the business of
homebuilding, construction or land or lot development and has annual revenues
from homebuilding operations (based on such company’s 2007 fiscal year end) of
less than $400 million.

 

C.            Executive
represents to the Company that he is willing and able to engage in businesses
and activities not restricted or precluded hereunder and that enforcement of
the restrictions set forth in this Section 8 would not be unduly burdensome
on Executive. Executive agrees that the period of time provided for in this Section 8
and the other provisions and restrictions set forth herein are reasonable and
necessary to protect the Company and its successors and assigns in the use and
employment of the goodwill of the business conducted by Executive. Executive
represents and warrants that the provisions of Section 8 and 9 of this
Agreement constitute valid and legally binding obligations of Executive
enforceable against Executive in accordance with their respective terms.

 

D.            The
provisions of this Section 8 will survive the termination of this
Agreement under Section 7 of this Agreement.

 

E.             Executive
hereby covenants and agrees that, in the event any of the provisions of this Section 8
shall be violated or breached, the Company shall be entitled to obtain
injunctive relief against the party or parties violating such covenants without
bond but upon due notice, in addition to such further or other relief as may be
available at equity or law. An injunction by the Company shall not be
considered an election of remedies or a waiver of any right to assert any other
remedies which the Company has at law or in equity. No waiver of any breach or
violation hereof shall be implied from forbearance or failure by the Company to
take action thereof. The prevailing party in any litigation, arbitration or
similar dispute resolution proceeding to enforce this provision will recover
any and all reasonable costs and expenses, including attorneys’ fees.

 

(ii)           Section 15
of the Employment Agreement is deleted in its entirety.

 

(iii)          A
new section 19 is added to the Employment Agreement as follows:

 

19.          Liquidated Damages. The parties agree
that damages resulting from Executive’s breach of Section 8(A) of
this Agreement would be difficult to estimate or determine. Accordingly, the
parties agree that if Executive breaches any

 

6

 

provision of Section 8(A) of this Agreement, he will pay to
the Company, with respect to each Meritage Employee Hired, as liquidated
damages, and not as a fine or penalty, damages in the following amounts:

 

·                  For any Meritage
Employee with a position of Regional Vice President or higher, $2.5 million per
Meritage Employee;

 

·                  For any Meritage
Employee with a position of Division President or that is a Designated
Employee, $500,000 per Meritage Employee;

 

·                  For any Meritage
Employee with a position of Vice President (other than a Designated Employee),
$250,000 per Meritage Employee; and

 

·                  For any other
Meritage Employee, $100,000 (other than a Designated Employee) per Meritage
Employee who is Hired and continues in such employment beyond the cure period
permitted in Section 8(A).

 

For the avoidance of doubt, the positions listed above refer to the
positions a Meritage Employee holds with the Company, and not the position that
they are Hired for by Executive. The foregoing remedies shall be in addition to
any remedy to which a party may be entitled to at law or in equity, including,
without limitation, injunctive relief.

 

(g)           The Parties hereby
amend Section 7(b) of the Stock Purchase Agreement by deleting the
following text: “, and (ii) in the event of any non-performance or breach
of this Agreement by Landon, Meritage shall be entitled, at its sole option, to
rescind this Agreement, in which case Landon shall be required to repay to
Meritage the amount of the purchase price paid hereunder and Meritage shall be
required to return to Landon the Shares.”

 

(h)           Contemporaneously
with the execution of this Agreement, Meritage is executing the affidavit on Exhibit B hereto
concerning Landon’s application for a refund of certain income taxes paid in
2006. Meritage covenants and agrees that it will not change its position in the
future in a manner that is different or inconsistent with the factual matters
affirmed on Exhibit B.

 

3.             Dismissal
of Arbitration. The Parties will dismiss the Arbitration between them
upon the execution of this Agreement and Meritage’s receipt of $2,701,613.00
and the release of the escrowed funds to Meritage, with each party to bear its
own attorneys’ fees and costs, including 50% of any AAA costs incurred in
connection with the Arbitration.

 

4.             No
Admission of Liability. Nothing contained in this Agreement shall be
construed in any manner as an admission by any party that it has, or may have,
violated any statute, law, regulation, or breached any contract or agreement.

 

5.             Reliance.
The Parties represent and warrant that: (a) each has relied on his or its
own judgment regarding the consideration for and language of this Agreement; (b) each
has been given a reasonable period of time to consider this Agreement, has been
advised to consult with independent counsel before signing this Agreement, and
has consulted with independent counsel

 

7

 

with respect hereto; (c) neither party has in any way coerced or
unduly influenced the other to execute this Agreement; (d) neither party
has relied upon any advice or any representation of the other party’s counsel;
and (e) this Agreement is written in a manner that is understandable to
both Parties.

 

6.             Nature
of the Agreement. This Agreement and all provisions thereof, including all
representations and promises contained herein, are contractual and not a mere
recital and shall continue in permanent force and effect. This Agreement and
all attachments and the Existing Agreements (as modified hereby) constitute the
sole and entire agreement of the Parties with respect to the subject matter
hereof, and there are no agreements of any nature whatsoever between the
Parties hereto with respect to the subject matter hereof. This Agreement may
not be modified or changed unless done so in writing, signed by both Parties.
In the event that any portion of this Agreement is found to be unenforceable
for any reason whatsoever, the unenforceable provision shall be considered to
be severable, and the remainder of the Agreement shall continue to be in full
force and effect. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas without regard to choice of law
principles.

 

7.             Severability.
If any provision of this Agreement is held by a court of competent jurisdiction
to be invalid, void, or unenforceable, for whatever reason, the remaining
provisions of this Agreement shall nevertheless continue in full force and
effect without being impaired in any manner whatsoever.

 

8.             Notices.
Unless otherwise provided, any notice required or permitted by this Agreement
shall be in writing. Notice shall be deemed sufficient: (a) when delivered
by overnight courier or sent by facsimile; (b) upon delivery when
delivered personally; or (c) upon seventy-two (72) hours after being
deposited in the U.S. mail, as certified or registered mail, with postage
prepaid, addressed to the party to be notified at such party’s address or
facsimile number, as subsequently modified by written notice, as follows:

 

(i)            if to Landon, to ***, Attn: John R. Landon, with a copy
to Mark T. Josephs, Jackson Walker L.L.P., 901 Main Street, Dallas, Texas
75202; or

 

(ii)           if to Meritage, to
Meritage Homes Corporation, 17851 North 85th Street, Suite 300,
Scottsdale, Arizona 85255, Attn: General Counsel, with a copy to David W. Jones, Beck, Redden &
Secrest, L.L.P., 1221 McKinney, Suite 4500, Houston, Texas 77010 .

 

9.             Attorneys’
Fees. In action or proceeding to enforce the terms of this Agreement, the
prevailing party shall recover from the other party its reasonable attorneys’
fees.

 

10.          Arbitration.
Any dispute, controversy, or claim, whether contractual or non- contractual,
between the parties hereto arising directly or indirectly out of or connected
with this Agreement or the Existing Agreements (as modified hereby), relating
to the breach or alleged breach of any representation, warranty, agreement, or
covenant under this Agreement of the Existing Agreements (as modified hereby),
unless mutually settled by the parties hereto, shall be resolved by binding
arbitration in accordance with the Employment Arbitration Rules of the
American Arbitration Association (the “AAA”). Any arbitration shall be conducted
by

 

***     CONFIDENTIAL
INFORMATION HAS BEEN OMITTED

 

8

 

arbitrators approved by the AAA and mutually acceptable to Company and
Executive. All such disputes, controversies, or claims shall be conducted by a
single arbitrator, unless the dispute involves more than $1,000,000 in the
aggregate in which case the arbitration shall be conducted by a panel of three
arbitrators. If the parties hereto are unable to agree on the arbitrator(s),
then the AAA shall select the arbitrator(s). The resolution of the dispute by
the arbitrator(s) shall be final, binding, nonappealable, and fully
enforceable by a court of competent jurisdiction under the Federal Arbitration
Act. The arbitrator(s) shall award damages to the prevailing party. The
arbitration award shall be in writing and shall include a statement of the
reasons for the award. The arbitration shall be held in Dallas, Texas. The
arbitrator(s) shall award reasonable attorneys’ fees and costs to the
prevailing party. Notwithstanding this provision, nothing in this Agreement or
the Existing Agreements (as modified hereby) shall preclude either Party from
seeking injunctive relief from a court of competent jurisdiction to preserve
the status quo during the pendency of any dispute.

 

[Signature Pages Follow]

 

9

 

Dated this 9th day of April,
2008.

 

 

	
   

  	
  MERITAGE HOMES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ C. Timothy White

  
	
   

  	
  Name:

  	
  C. Timothy White

  
	
   

  	
  Title:

  	
  EVP/General Counsel

  

 

10

 

Dated this 9th day of April, 2008.

 

 

	
   

  	
  JOHN R. LANDON

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
  John R. Landon

  
	
   

  	
   

  	
   

  	
  John R.
  Landon

  
					

 

 

	
   

  	
  ELEANOR LANDON

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
  Eleanor Landon

  
	
   

  	
   

  	
  Eleanor
  Landon

  
	
   

  	
   

  

 

	
   

  	
  LANDON DEVELOPMENT COMPANY, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John R. Landon

  
	
   

  	
  Name:

  	
    John R. Landon

  
	
   

  	
  Title:

  	
  President

  
					

 

 

	
   

  	
  LANDON HOMES, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John R. Landon

  
	
   

  	
  Name:

  	
    John R. Landon

  
	
   

  	
  Title:

  	
    Authorized Agent

  
				

 

 

	
   

  	
  LANDON FAMILY PARTNERSHIP, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John R. Landon

  
	
   

  	
  Name:

  	
    John R. Landon

  
	
   

  	
  Title: 

  	
  General Partner

  
					

 

11

 

EXHIBIT A

Protected Community List

 

DFW Communities

1.     South
Pointe – Mansfield, TX

2.     Mira
Lagos – Grand Prairie, TX

3.     Plantation
– Burleson, TX

4.     Forest
Meadows – Denton, TX

5.     Summit
Parks – De Soto, TX

6.     Villages
of Carmel – Denton, TX

 

Austin Communities

7.     Cantarra
– Austin, TX

8.     Falcon
Pointe – Pflugerville, TX

9.     Cold
Springs – Leander, TX

10.   Terravista
– Round Rock, TX

11.   Highland
Horizons – Round Rock, TX

12.   High
Pointe – Dripping Springs, TX

13.   Crystal
Falls – Leander, TX

 

Houston Communities

14.   Cardiff–
Katy, TX

15.   Silver
Ranch – Katy, TX

16.   Westheimer
Lakes North – Katy, TX

17.   Cypress
Creek Lakes – Cypress, TX

18.   Aliana –
Richmond, TX

19.   Telfair –
Sugar Land, TX

20.   Cinco
Ranch – Katy, TX

21.   Sienna
Plantation/Sienna South – Missouri City, TX

22.   Oakhurst
at Kingwood – Porter, TX

23.   Trails of
Cypress Lakes – Tomball, TX

24.   Wood
Creek – Montgomery, TX

 

12

 

EXHIBIT B

Form of Affidavit

See attached

 

13

 

BEFORE THE AMERICAN ARBITRATION ASSOCIATION

DALLAS, TEXAS

 

	
  IN THE MATTER OF THE 

  ARBITRATION BETWEEN:

  	
  §

  	
   

  
	
   

  	
  §

  	
   

  
	
  Meritage
  Homes Corporation,

  	
  §

  	
   

  
	
   

  	
  §

  	
   

  
	
  Claimant

  	
  §

  	
   

  
	
   

  	
  §

  	
  Case No. 71 166 00081 07

  
	
  VS.

  	
  §

  	
   

  
	
   

  	
  §

  	
   

  
	
  John R.
  Landon,

  	
  §

  	
   

  
	
   

  	
  §

  	
   

  
	
  Respondent.

  	
  §

  	
   

  

 

AFFIDAVIT OF C.
TIMOTHY WHITE

 

	
  STATE OF TEXAS

  	
  §

  
	
   

  	
  §

  
	
  COUNTY OF DALLAS

  	
  §

  

 

BEFORE ME, the undersigned authority, personally appeared C. Timothy
White, who after being by me duly sworn, said the following:

 

1.             My name is C.
Timothy White. I am over the age of eighteen (18) years and I am fully
competent to make this affidavit. Each of the statements in this affidavit is
within my personal knowledge and is true and correct.

 

2.             I am the Executive
Vice President, General Counsel, and Secretary of Meritage Homes Corporation (“Meritage”).
I am authorized to speak on behalf of Meritage for purposes of this affidavit.
Meritage’s Second Amended Statement of Claim in this proceeding, a true an
correct copy of which is attached hereto as Exhibit “A,” accurately
reflects Meritage’s position that John R. Landon (“Landon”) has been in
violation of the Restrictive Covenant contained in his Employment Agreement
since the termination of his employment with Meritage on May 17, 2006, as
set forth in Section 7. Meritage and Landon settled all claims and causes
of action against the other on April 9, 2007.

 

1

 

FURTHER
AFFIANT SAYTH NOT.

 

 

	
   

  	
   

  
	
   

  	
  C.
  Timothy White

  

 

 

SUBSCRIBED
AND SWORN TO BEFORE ME on the 9th day of April, 2008.

 

 

	
   

  	
   

  
	
   

  	
  Notary
  Public, State of Texas

  

 

2

 

BEFORE THE AMERICAN ARBITRATION ASSOCIATION

DALLAS, TEXAS

 

	
  IN THE MATTER OF THE
  ARBITRATION BETWEEN:

  	
  §

  	
   

  
	
   

  	
  §

  	
   

  
	
  Meritage Homes
  Corporation,

  	
  §

  	
   

  
	
   

  	
  §

  	
   

  
	
  Claimant

  	
  §

  	
   

  
	
   

  	
  §

  	
  No. 71 166 00081 07

  
	
  and

  	
  §

  	
   

  
	
   

  	
  §

  	
   

  
	
  John R.
  Landon,

  	
  §

  	
   

  
	
   

  	
  §

  	
   

  
	
  Respondent.

  	
  §

  	
   

  

 

MERITAGE HOMES CORPORATION’S
 SECOND AMENDED STATEMENT OF CLAIM

 

Claimant Meritage Homes Corporation submits this Second Amended
Statement of Claim against respondent John R. Landon. For cause of action,
Meritage Homes Corporation shows the following:

 

PARTIES

 

1.             Claimant Meritage
Homes Corporation (“Meritage”) is a Maryland corporation with its principal
place of business at 17851 N. 85th Street, Suite 300, Scottsdale, Arizona
85255.

 

2.             Respondent John R.
Landon (“Landon”) is an individual residing at 2200 Willow Bend Drive, Plano,
Texas 75093.

 

FACTUAL BACKGROUND

 

3.             Effective July 1,
2003, Meritage and Landon entered into an Employment Agreement.

 

4.             Section 7A of
the Employment Agreement, titled “Voluntary Resignation by Executive or
Termination Without Cause,” provides in part:

 

 

If Executive voluntarily terminates his employment with the Company for
any reason after December 31, 2003 (or before such date, if with Good
Reason), or the Company terminates Executive without Cause, then . . . the
Company shall pay Executive $10 million (the Consulting, Severance and
Non-Competition Payment), in monthly installments of $416,666.67 in cash or by
check, over the next two years (the “Consulting Period” (subject to Executive’s
compliance with this Agreement, including Sections 8 and 9 as provided
therein).

 

5.             Section 8 of the
Employment Agreement, titled “Restrictive Covenant,” provides in part:

 

In consideration of Executive’s employment, but subject to Section 7,
Executive agrees to the following:

 

A.            During the Restriction
Period (as defined below), Executive will not, directly or indirectly, either
as an executive, partner, owner, lender, director, adviser or consultant or in
any other capacity or through any entity:

 

(1)           engage in any
production homebuilding or home sales or within 100 miles of any Company
project, provided
that, for purposes of this Section 8(a)(1),
Executive (a) may own stock in the Company and less than 1% of any other
publicly traded homebuilder, and (b) may engage in custom homebuilding (up
to 5 homes annually for third parties and 2 for family members), land banking
or lot or land development; provided, however, that Executive may
not directly or indirectly engage in the sale of finished lots within the
restricted areas described above, unless at least 10 business days prior to any
offer to a third party, the lots are offered to the Company, and if the Company
(or its nominee) determines to purchase the property, the applicable selling
party negotiates a sale in good faith. If no such sale is then consummated,
then the applicable selling party may pursue a sale with a third party. If the
terms of such third-party sale are materially different than the offer made to
the Company, the Company (or its nominee) will have the right of first refusal
to purchase the lots within three business days of notice of the proposed sale
to such a third party. This notice must contain the specific terms and
conditions thereof and the proposed buyer. If the Company (or a nominee) does
not respond to the right of first offer within 10 days or the right of first
refusal within three days, the Company will be deemed to have waived the
applicable right. The Company or nominee can substitute cash for any non-cash
consideration (at the fair market value thereof). This right will arise again
if the third party offer is materially modified or amended.

 

(2)           hire any person who
is, or within the six month period preceding the date of such activity was, an
employee of or consultant to the Company (other than as a result of a general
solicitation for employment); or

 

2

 

(3)           solicit any customer
or supplier of the Company (including lot developers and land bankers) for a
production homebuilding business or otherwise attempt to induce any such
customer or supplier to discontinue or materially modify its relationship with
the Company. During the Restriction Period, Executive may utilize the services
of Company suppliers for business operations permitted under Section 8a(1),
i.e., custom homebuilding,
land banking and land or lot development, so long as these activities do not
disrupt or adversely affect the Company’s relationships with such suppliers.

 

B.            The provisions of this
Section 8 shall
begin as of the date hereof, will survive the termination of this agreement
under Section 7 and
will expire two years from the Date of Termination provided that, to the extent
required, the notices under  Section 7 are given and the payments made as
provided therein (the “Restriction Period”).

 

6.             Effective May 17,
2006, Landon’s employment with Meritage was terminated. Thereafter, effective June 12,
2006, Meritage and Landon entered into a Settlement Agreement and Mutual
Release and Waiver of Claims (“Settlement Agreement”). In Section 2 of the
Settlement Agreement, titled “Principal Economic Terms,” the parties agreed
that Landon’s termination would be treated as a termination without cause and
that they would comply with Sections 7, 8, and 9 of the Employment Agreement:

 

(a)           Landon
and Meritage agree that (i) Landon’s termination shall be treated as a
termination without Cause pursuant to, and that Landon will receive the
benefits provided by, Section 7A of the Employment Agreement applicable
thereto, and (ii) Landon will remain subject to the restrictive covenants
and confidentiality obligations of Sections 8 and 9 of the Employment
Agreement.

 

(b)           Landon
hereby represents and warrants that the provisions of Sections 8 and 9 of the
Employment Agreement constitute valid and legally binding obligations of
Landon, enforceable against Landon in accordance with their respective terms.

 

(c)           Meritage
agrees to make the Consulting, Severance and Non-Competition Payments (as such
term is defined in Section 7A of the Employment Agreement) to Landon as,
and to the extent, required by the terms of the Employment Agreement. . . .

 

3

 

7.             Contemporaneously
with the Settlement Agreement, Meritage and Landon also entered into a Stock
Purchase Agreement under which Meritage agreed to repurchase 1,000,000 shares
of Meritage common stock from Landon at a price of $52.19 per share, in the
aggregate amount of $52,190,000.00. As with the Settlement Agreement, the
provisions of Sections 7, 8, and 9 of the Employment Agreement were
incorporated into the Stock Purchase Agreement:

 

WHEREAS, Landon and Meritage are parties to
that certain Employment Agreement effective as of July 1, 2003, as amended
from time to time (the “Employment  Agreement”), which Employment
Agreement imposes various continuing obligations upon Landon, as set forth in
Sections 8 and 9 thereof (the “Continuing
Obligations”) and upon Meritage, as set forth under Section 7
thereof.

 

* * *

 

Compliance with Agreements. Landon will comply in all respects with the terms and
provisions of this Agreement, the Settlement Agreement and . . . his Continuing
Obligations under the Employment Agreement.

 

7.             Since his
termination, Landon has violated Section 8 of the Employment Agreement, the
Settlement Agreement, and Stock Purchase Agreement by, directly or indirectly,
either as an executive, partner, owner, lender, director, adviser, or
consultant or in another capacity or through an entity, (1) engaging in
production homebuilding or home sales within 100 miles of a Meritage project; (2) engaging
in the sale of finished lots within the restricted area without first offering
those lots to Meritage or providing Meritage a right of first refusal to
purchase the lots; (3) hiring one or more persons who were employees of or
consultants to Meritage; and (4) soliciting one or more customers or
suppliers of Meritage for a production homebuilding business or otherwise
attempting to induce such customers or suppliers to discontinue or materially
modify their relationship with Meritage.

 

4

 

CAUSES OF ACTION

 

Count I – Declaratory Judgment

 

8.             Meritage repeats and realleges each
and every allegation in the paragraphs above with the same force and effect as
if fully set forth herein.

 

9.             This is an action for declaratory
judgment pursuant to Section 37.001, et
seq., of the Texas Civil Practice and Remedies Code for the purpose
of determining a question of actual, justiciable controversy between Meritage
and Landon concerning their rights and obligations under the Employment
Agreement, the Settlement Agreement, and the Stock Purchase Agreement.

 

10.           Meritage seeks declarations that (1) Landon
has breached the Employment Agreement, the Settlement Agreement, and the Stock
Purchase Agreement; (2) Meritage has no obligation to pay Landon the
Consulting, Severance and Non-Competition Payment; and (3) the Stock
Purchase Agreement is rescinded pursuant to Section 7(b) of the Stock
Purchase Agreement, and Landon shall be required to repay Meritage the amount
of the purchase price and Meritage shall be required to return the purchased
shares to Landon.

 

11.           All conditions precedent to the
assertion of this claim have been met, or they have been waived by Landon.

 

Count II – Breach of Contract

 

12.           Meritage repeats and realleges each
and every allegation in the paragraphs above with the same force and effect as
if fully set forth herein.

 

13.           As a result of Landon’s breach of
contract, Meritage has suffered damages in the form of installments on the
Consulting, Severance, and Non-Competition Payment for which it is entitled to
recover.

 

5

 

14.           As a result of
Landon’s breach of contract, Meritage is entitled to rescind the Stock Purchase
Agreement.

 

15.           All conditions
precedent to the assertion of this claim have been met, or they have been
waived by Landon.

 

Count III – Injunction

 

16.           Meritage repeats and
realleges each and every allegation in the paragraphs above with the same force
and effect as if fully set forth herein.

 

17.           As authorized by the
Employment Agreement, the Settlement Agreement, and the Stock Purchase
Agreement, Meritage seeks injunctive relief to enjoin Landon’s breach of
contract for the remaining term of the Restrictive Covenant, as extended pursuant
to Section 8D of the Employment Agreement, “for a period equal to the
duration of any breach.”

 

18.           All conditions
precedent to the assertion of this claim have been met, or they have been
waived by Landon.

 

RESERVATION

 

19.           Meritage reserves
the right to assert claims arising from any further or additional breach or
violation of the Employment Agreement, the Settlement Agreement, the Stock
Purchase Agreement, and any other agreement with Landon, or any other duty owed
by Landon

 

PRAYER

 

WHEREFORE, Claimant Meritage Homes Corporation requests that Respondent
John R. Landon appear and serve an answering statement herein, and that upon
final hearing hereof, the panel:

 

(a)           determine and
adjudicate the rights and liabilities of the parties as set forth above;

 

(b)           award Meritage
actual damages plus pre-award interest;

 

6

 

	
  (c)

  	
  order the immediate release to Meritage of all installments on the
  Consulting, Severance, and Non-Competition Payment currently held in escrow;

  
	
   

  	
   

  
	
  (d)

  	
  rescind the Stock Purchase Agreement and order Landon to repay
  Meritage the amount of the purchase price and Meritage to return the
  purchased shares to Landon;

  
	
   

  	
   

  
	
  (e)

  	
  award Meritage injunctive relief as set forth above;

  
	
   

  	
   

  
	
  (f)

  	
  award Meritage costs and reasonable and necessary attorneys’ fees;
  and

  
	
   

  	
   

  
	
  (g)

  	
  award Meritage all other relief as the panel may deem proper and
  just.

  

 

	
   

  	
  Respectfully
  submitted,

  
	
   

  	
   

  
	
   

  	
  BECK,
  REDDEN & SECREST

  
	
   

  	
  A
  Registered Limited Liability Partnership

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Joe W. Redden, Jr.

  
	
   

  	
  Joe W. Redden, Jr.

  
	
   

  	
  State Bar No. 16660600

  
	
   

  	
  David W. Jones

  
	
   

  	
  State Bar No. 00790980

  
	
   

  	
  Matthew P. Whitley

  
	
   

  	
  State Bar No. 24037703

  
	
   

  	
  1221 McKinney, Suite 4500

  
	
   

  	
  Houston, Texas 77010

  
	
   

  	
  Telephone: (713) 951-3700

  
	
   

  	
  Telecopier: (713) 951-3730

  
	
   

  	
   

  
	
   

  	
  Attorneys for Meritage Homes Corporation

  

 

 

CERTIFICATE OF SERVICE

 

I
hereby certify that a true and correct copy of the foregoing has been provided
by facsimile to Respondent’s counsel of record on February 18, 2007.

 

 

	
   

  	
  /s/ David W. Jones

  
	
   

  	
  David W. Jones

  

 

7

 

EXHIBIT C

Wire Instructions

 

***

 

***     CONFIDENTIAL
INFORMATION HAS BEEN OMITTED

 

14

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