D.R. Horton

Deferred Compensation Plan

(Effective as of June 15, 2002)

                                TABLE OF CONTENTS

                                                                           Page

ARTICLE 1       ESTABLISHMENT AND PURPOSE.....................................1

ARTICLE 2       DEFINITIONS...................................................2

ARTICLE 3       ADMINISTRATION................................................5

ARTICLE 4       ELIGIBILITY AND PARTICIPATION.................................7

ARTICLE 5       CONTRIBUTIONS TO DEFERRAL ACCOUNTS............................7

ARTICLE 6       DISTRIBUTIONS.................................................8

ARTICLE 7       DEFERRED COMPENSATION ACCOUNTS...............................11

ARTICLE 8       TRUST........................................................13

ARTICLE 9       CHANGE IN CONTROL............................................13

ARTICLE 10      RIGHTS OF PARTICIPANTS.......................................13

ARTICLE 11      WITHHOLDING OF TAXES.........................................14

ARTICLE 12      AMENDMENT AND TERMINATION....................................14

ARTICLE 13      MISCELLANEOUS................................................14

ARTICLE 14      ADMINISTRATIVE INFORMATION...................................15

ARTICLE 15      ERISA RIGHTS.................................................16

50153841_4.DOC
D.R. Horton

Deferred Compensation Plan

ARTICLE 1
ESTABLISHMENT AND PURPOSE

1.1 Establishment. D.R. Horton, Inc., a Delaware corporation (the "Company"), established the D.R. Horton, Inc. Supplemental Executive Retirement Plan No. 1 (the "Supplemental Plan"), an unfunded deferred compensation plan for a select group of management or highly compensated employees, effective as of November 15, 1993. Effective as of July 1, 2000, Schuler Homes, Inc. established the Schuler Homes, Inc. Deferred Compensation Plan for Directors and Key Employees (the "Schuler Plan"), which also is an unfunded deferred compensation plan maintained primarily for the purpose of providing deferred compensation to members of the board of directors and a select group of management or highly compensated employees.

Effective February 21, 2002, Schuler Homes, Inc. merged with and into the Company, and the Company became the sponsor of the Schuler Plan. For sake of efficiency, the Company wishes to consolidate and restate the Schuler Plan and the Supplemental Plan into one uniform plan of benefits for the participants of such plans and to provide a select group of management or highly compensated employees and nonemployee directors who are selected to participate the opportunity to defer compensation on a pre-tax basis.

Effective as of June 15, 2002, the Company hereby establishes this deferred compensation plan for a select group of employees and directors as described herein, which shall be known as the "D.R. Horton Deferred Compensation Plan" (the "Plan"), which shall be the successor to and supersede the Supplemental Plan and the Schuler Plan. In particular, the Schuler Plan will be merged with and into the Supplemental Plan, with the Supplemental Plan being the Surviving Plan, which shall change its name to the Plan, all effective as of June 15, 2002. Except as expressly provided herein, all amounts deferred under the Supplemental Plan or the Schuler Plan shall be payable under the terms of the Plan as of the effective date.

The Plan is intended to be an unfunded plan maintained primarily to provide deferred compensation benefits for a select group of "management or highly compensated employees" within the meaning of sections 201, 301, and 401 of ERISA, and therefore exempt from the provisions of Parts 2, 3, and 4 of Title I of ERISA. The Plan is intended to constitute a "nonqualified deferred compensation plan" for purposes of Code section 3121(v)(2) as well as 4 U.S.C. section 114.

1.2 Purpose. The primary purpose of the Plan is to provide a select group of management and members of the Board of Directors with a capital accumulation opportunity by deferring compensation on a pre-tax basis. The Plan also provides the Company with a method of rewarding and retaining its highly compensated executives and directors.

ARTICLE 2
DEFINITIONS

Whenever used herein, the following terms shall have the meanings set forth below, and, when the defined meaning is intended, the term is capitalized:
(a) "Affiliate" means any business entity 80% or more owned or controlled by the Company.
(b) "Board" or "Board of Directors" means the Board of Directors of the Company.
(c) "Change in Control" means the occurrence of any of the following events:

(i) A merger, consolidation or reorganization of the Company into or with another corporation or other legal person if the stockholders of the Company, immediately before such merger, consolidation or reorganization, do not, immediately following such merger, consolidation or reorganization, then own directly or indirectly, more than 50% of the combined voting power of the then-outstanding voting securities of the corporation or other legal person resulting from such merger, consolidation or reorganization in substantially the same proportion as their ownership of Voting Securities (as hereinafter defined) immediately prior to such merger, consolidation or reorganization;

(ii) The Company sells all or substantially all of its assets to another corporation or other legal person, or there is a complete liquidation or dissolution of the Company;

(iii) There is a report filed on Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report), each as promulgated pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), disclosing that any person (as the term "person" is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the beneficial owner (as the term "beneficial owner" is defined under Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act) of securities representing 20% or more of the combined voting power of the then-outstanding voting securities of the Company ("Voting Securities") (computed in accordance with the standards for the computation of total percentage ownership for the purposes of Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report)); or

(iv) The Company files a report or proxy statement with the Securities and Exchange Commission pursuant to the Exchange Act disclosing in response to Form 8-K or Schedule 14A (or any successor schedule, form or report or item therein) that a change in control of

the Company has occurred or will occur in the future pursuant to any then-existing contract or transaction.

Notwithstanding the provisions set forth in (iii) or (iv) above, a "Change in Control" shall not be deemed to have occurred for purposes of this Plan solely because (i) the Company, (ii) any Affiliate, or (iii) any employee stock ownership plan or any other employee benefit plan of the Company or any Affiliate either files or becomes obligated to file a report or a proxy statement under or in response to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any successor schedule, form or report or item therein) under the Exchange Act disclosing beneficial ownership by it of Voting Securities, whether in excess of 20% or otherwise, or because the Company reports that a change in control of the Company has occurred or will occur in the future by reason of such beneficial ownership. For purposes of calculating beneficial ownership pursuant to this subsection, any Voting Securities held by Donald R. Horton as of the date hereof or received by Donald R. Horton in connection with any merger involving the Company and any affiliate of the Company shall not be included in the calculation of beneficial ownership.

(d) "Code" means the Internal Revenue Code of 1986, as amended from time to time.

(e) "Committee" means a committee of three (3) or more persons appointed by the Board to administer the Plan pursuant to Article 3.

(f) "Company" means D.R. Horton, Inc., a Delaware corporation.

(g) "Compensation" means an Employee's Salary, Incentive Compensation, Director's Compensation, and other compensation paid by the Employer for the Plan Year.

(h) "Deferral Account" means the accounting entry made with respect to each Participant for the purpose of maintaining a record of each Participant's benefit under the Plan.

(i) "Director's Compensation" means such amounts payable to an Employee for the Plan Year for the Employee's service on the Board for the Plan Year including, with limitation, annual retainer and meeting fees.

(j) "Disability" means a condition which meets the definition of a disability as contained in the Company's long-term disability plan (as determined by the Committee in its sole discretion).

(k) "Eligible Employee" means an Employee who is eligible to participate in the Plan pursuant to Section 4.1.

(l) "Employee" means any person either (i) employed by the Employer whose wages are subject to withholding for purposes of the Federal Insurance Contribution Act, or (ii) serving as a member of the Board of Directors.

(m) "Employee Contributions" means those contributions credited to a Participant's Deferral Account in accordance with the Participant's deferral election pursuant to Section 5.1.

(n) "Employer" means the Company and each Affiliate that adopts the Plan with the Company's permission.

(o) "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time.

(p) "Incentive Compensation" means such bonuses and other non periodic amounts (not including equity compensation) payable to an Employee in addition to his Salary and/or Director's Compensation for services rendered during the Plan Year, which may be paid to the Employee in the following Plan Year as determined by the Employer in accordance with its general policies and procedures and its sole discretion. Whether a payment qualifies as "Incentive Compensation" shall be determined by the Company in its sole discretion.

(q) "Installment Eligibility Age" means the attainment of age 50 and 10 years of service with the Employer (including service with any predecessor employers designated by the Company as such). This age and service requirement is applicable only to eligibility to receive installment payments hereunder and shall not apply to, or affect or be considered in interpreting, any other compensation, benefit, or plan of the Company.

(r) "Participant" means an Eligible Employee who is participating in the Plan pursuant to Section 4.2 or an Employee who participated in the Supplemental Plan or the Schuler Plan whose compensation deferrals under those plans have been credited to a Deferral Account under the Plan.

(s) "Plan" means the D.R. Horton Deferred Compensation Plan, as set forth herein, and as it may be amended from time to time.

(t) "Plan Year" means January 1 to December 31 of each calendar year. The first Plan Year shall be a short plan year that begins on June 15, 2002, and ends on December 31, 2002.

(u) "Salary" means the base annual compensation payable to an Employee by the Employer for services rendered during a Plan Year, before reduction for amounts deferred pursuant to the Plan or to the D.R. Horton, Inc. Profit Sharing Plus Plan, or any other deferred compensation, 401(k), or cafeteria plan, which is payable in cash to the Employee for services to be rendered during the Plan Year; provided that "Salary" shall exclude (i) Incentive Compensation, and (ii) Director's Compensation that may be paid by the Employer to an Employee with respect to the Plan Year.

(v) "Schuler Plan" means the Schuler Homes, Inc. Deferred Compensation Plan for Directors and Key Employees.

(w) "Supplemental Plan" means the D.R. Horton, Inc. Supplemental Executive Retirement Plan No. 1.

ARTICLE 3
ADMINISTRATION

3.1 Authority of the Committee. The Board shall appoint a Committee of three (3) or more persons to administer the Plan. The members of the Committee shall be appointed by and shall serve at the discretion of the Board.

Subject to the provisions herein, the Committee shall have full power and discretion to select Employees for participation in the Plan; to determine the terms and conditions of each Employee's participation in the Plan; to construe and interpret the Plan and any agreement or instrument entered into under the Plan; to establish, amend, or waive rules and regulations for the Plan's administration; to amend (subject to the provisions of Articles 9 and 12 herein) the terms and conditions of the Plan and any agreement entered into under the Plan; and to make other determinations which may be necessary or advisable for the administration of the Plan.

3.2 Decisions Binding. Subject to Section 3.4(b), all determinations and decisions of the Committee as to any disputed question arising under the Plan, including questions of construction and interpretation, shall be final, conclusive, and binding on all parties and shall be given the maximum possible deference allowed by law.

3.3 Claim Procedures. If a request for Plan benefits is denied in whole or in part, the Participant or his beneficiary ("claimant") will be notified in writing within 90 days after receipt of the claim. In some instances, the Committee may require an additional 90 days to consider the claim. When additional time is needed, the claimant will be notified of the special circumstances requiring the extension. The extension may not exceed a total of 180 days from the date the claim was originally filed.

If additional information is necessary to process the claim, the claimant will be notified of the items needed in order to consider the claim.

If a claimant's initial request for benefits is denied, the notice of the denial will include the specific reasons for denial and references to the relevant Plan provisions on which the denial was based, a description of any additional material or information necessary to perfect the claim and an explanation of why such information is necessary, if applicable, and a description of the Plan's review procedures and the time limits applicable thereto, including a statement of the claimant's rights under Section 502(a) of ERISA.

Within 60 days after receiving a denial, the claimant or his authorized representative may appeal the decision by requesting a review by writing the Committee. On appeal, the claimant may submit in writing any comments or issues with respect to the claim and/or any additional documents or information not considered during the initial review and, upon request, the claimant may review all documents pertinent to the claim.

A decision on appeal will normally be given within 60 days of the receipt of the appeals request. If special circumstances warrant an extension,

then the decision will be made no later than 120 days after receipt of the appeal. Subject to Section 3.4, the Committee's decision on appeal shall be final and binding on all parties.

If a claimant's appeal is denied in whole or in part, the notice of the decision on appeal shall include the specific reasons for the denial and reference to the relevant Plan provisions on which the denial was based, a statement that, upon request and free of charge, the claimant may review and copy all documents relevant to the claim for benefits, a statement describing the Plan's binding arbitration procedures (or, on or after a Change in Control, other contest procedures) and the claimant's rights under Section 502(a) of ERISA.

3.4 Arbitration. (a) Pre Change in Control. The following provisions shall apply before a Change in Control. Any individual making a claim for benefits under this Plan may contest the Committee's decision to deny such claim or appeal therefrom only by submitting the matter to binding arbitration before a single arbitrator. Any arbitration shall be held in Arlington, Texas, unless otherwise agreed to by the Committee. The arbitration shall be conducted pursuant to the Commercial Arbitration Rules of the American Arbitration Association.

The arbitrator's authority shall be limited to the affirmation or reversal of the Committee's denial of the claim or appeal, based solely on whether or not the Committee's decision was arbitrary or capricious, and the arbitrator shall have no power to alter, add to, or subtract from any provision of this Plan. Except as otherwise required by ERISA, the arbitrator's decision shall be final and binding on all parties, if warranted on the record and reasonably based on applicable law and the provisions of this Plan. The arbitrator shall have no power to award any punitive, exemplary, consequential or special damages, and under no circumstances shall an award contain any amount that in any way reflects any of such types of damages. Each party shall bear its own attorney's fees and costs of arbitration. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.

(b) Post Change in Control. On and after a Change in Control, the Committee's decisions shall be given no special deference, but rather shall be reviewed de novo, and a claimant may contest any Committee decision through arbitration or litigation, at the forum and the venue of his or her choice. The Company shall be liable for all Court or arbitration costs and legal fees if the claimant is the prevailing party.

3.5 Indemnification. Each person who is or shall have been a member of the Committee, or of the Board, shall be indemnified and held harmless by the Employer against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party, or in which he or she may be involved by reason of any action taken or failure to act under the Plan, and against and from any and all amounts paid by him in settlement thereof, with the Employer's approval, or paid by him in satisfaction of any judgment in any such action, suit or proceeding against him, provided he or she shall give the Employer an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his own behalf.

The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Employer's Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Employer may have to indemnify them or hold them harmless.

ARTICLE 4
ELIGIBILITY AND PARTICIPATION

4.1 Eligibility. The Committee shall determine, in its sole and absolute discretion, which such Employees shall be eligible to participate from time to time, and may modify such determinations at any time, provided that at all times the Plan shall continue to qualify as an unfunded plan maintained primarily to provide deferred compensation benefits to a select group of management or highly compensated employees, within the meaning of sections 201, 301, and 401 of ERISA. To be eligible for selection by the Committee, an Employee must either (i) be a Director serving on the Board, or (ii) have total Compensation for the Plan Year scheduled to be at least $100,000 (or, if greater, the highly compensated employee threshold under Code section 414(q)). In addition, to be eligible to participate herein, a former Schuler Plan participant must consent to the transfer of assets held in the Trust informally funding the Schuler Plan (with First Hawaiian Bank as Trustee) being transferred to the Grantor Trust informally funding this Plan, and must consent to the distribution rules provided for herein with respect to amounts formerly credited to the Schuler Plan.

4.2 Participation. Each Eligible Employee shall become a Participant in the Plan upon his deferral of Compensation hereunder, pursuant to Article 5.

In the event a Participant ceases to be eligible to participate in the Plan, such Participant shall become an inactive Participant, retaining all the rights described under the Plan, except the right to make any further deferrals, until such time that the Participant again becomes an active Participant.

4.3 Partial Year Eligibility. In the event that an Employee first becomes eligible to participate in the Plan after the beginning of a Plan Year, the Employer shall notify the Employee of his eligibility to participate, and the Employer shall provide each such Participant with a "Deferral Election Form," and any additional enrollment forms that must be completed by the Participant as provided in Section 5.3 herein; provided, however, that such Participant must make his election within 30 days thereof and may elect only to defer that portion of his Compensation for such Plan Year which is to be earned after the filing of the deferral election.

4.4 Notice. The Company shall notify an Employee within a reasonable time of such Employee's gaining or losing eligibility for active participation in the Plan.

ARTICLE 5
CONTRIBUTIONS TO DEFERRAL ACCOUNTS

5.1 Compensation Deferrals. Subject to Sections 5.2 and 5.3, an Eligible Employee may elect to defer and have credited to his Deferral Account for any Plan Year (i) up to one hundred percent (100%) of his Incentive Compensation and/or Director's Compensation, and (ii) up to ninety percent (90%) of his Salary; provided, however, that the amount of deferrals selected by the

Participant shall not reduce his non-deferred Compensation below the amount that is required to withhold for any state or federal payroll taxes (including FICA/Medicare tax on deferred amounts), income tax, payments to be withheld pursuant to the D.R. Horton Profit Sharing Plus Plan or any other benefit plan of the Employer (other than this Plan), and any other required or elected withholding. The minimum amount of Compensation that may be deferred in any Plan Year is five thousand dollars ($5,000) (or two thousand five hundred dollars ($2,500) in the case of the first (short) Plan Year).

5.2 Deferral Election. Eligible Employees and Participants shall make their elections to defer all or a portion of their Compensation for the Plan Year no later than December 1 prior to the beginning of the Plan Year in which the Salary, Incentive Compensation, and/or Director's Compensation is to be earned, or not later than thirty (30) calendar days following notification of eligibility to participate for a partial Plan Year (with respect to Compensation not yet earned). Notwithstanding the foregoing, any deferral election a Participant made under the Supplemental Plan or the Schuler Plan shall be null and void effective as of June 15, 2002. If an Eligible Employee wishes to participate in the Plan for the first (short) Plan Year, such Eligible Employee must elect on or before June 14, 2002, to defer all or a portion of his Compensation to be earned for the pay periods beginning on or after June 15, 2002; provided, however, that (i) Eligible Employees are not permitted to defer any portion of their Incentive Compensation payable on June 15, 2002, and (ii) Eligible Employees shall have a one-time irrevocable election until June 30, 2002, to revoke their prior deferral election, in which case they shall not be eligible to participate herein until January 1, 2003. Any Salary, Incentive Compensation, and Director's Compensation deferral elections must be made before the Compensation is earned and before the amount thereof is substantially certain of payment.

5.3 Length of Deferral and Modification of Elections. All deferral elections shall be irrevocable for the Plan Year in which they are in effect, and shall be made on a "Deferral Election Form," as described herein. Once made, a Participant's deferral election shall remain in effect for all subsequent Plan Years for which the Participant is an Eligible Employee unless and until the Participant increases, decreases, or terminates such election by submitting a new Deferral Election Form to the Employer. Deferral election changes must be submitted to the Employer no later than December 1 prior to the beginning of the Plan Year for which the change is to be effective.

On the "Deferral Election Form" and related enrollment forms Participants shall elect (i) the percentage or flat dollar amount of each eligible component of Compensation to be deferred for the Plan Year; (ii) the deemed investment elections of the amounts to be deferred, in accordance with
Section 7.2; (iii) any scheduled in-service withdrawal that may be desired (which election must be made prior to the beginning of the deferral period for the Plan Year deferral at issue, and can only be elected for one Plan Year's deferral at a time); and (iv) a Beneficiary designation.

ARTICLE 6
DISTRIBUTIONS

6.1 Scheduled In-Service Distributions. A Participant may elect in the manner prescribed by the Committee to receive all or a portion of the

vested portion of his Deferral Account while he is still employed by the Employer in (i) a single lump sum payment, or (ii) annual installment payments over a period of two (2) to five (5) years; provided, however, that a Participant may not elect to receive an in-service distribution under this
Section 6.1 of the portion of his Deferral Account attributable to amounts deferred under the Supplemental Plan, if any. If the amount the Participant elects to receive is less than $25,000 (for all years combined), payment shall be made in a single lump sum. If a Participant elects to receive installment payments under (ii) above, the amount of each installment payment shall be equal to the balance remaining in the portion of the Participant's Deferral Account that is subject to such installment election (as determined immediately prior to each such payment), multiplied by a fraction, the numerator of which is one (1), and the denominator of which is the total number of remaining installment payments. The installment amount shall be adjusted annually to reflect gains and losses, if any, allocated to such Participant's Deferral Account pursuant to Article 7.

A Participant's election under this Section 6.1 must specify the future year in which the payment of the deferred amounts shall commence, provided that the year in which distributions are to commence must be at least two (2) years beyond the end of the Plan Year in which the compensation is deferred. Any desired in-service distribution must be separately elected for each year compensation is deferred. Thus, to elect a scheduled in-service withdrawal for future plan years' deferrals, a new distribution election form must be submitted during the applicable enrollment period. Once the applicable enrollment period has passed, a scheduled in-service distribution cannot be elected for that plan year's deferrals. Distributions under this Section 6.1 shall commence in January of the year specified in the Participant's election. A Participant may delay the commencement of in-service payments or amend his election as to the form of the distribution at any time provided that such amendment must be made in the manner specified by the Committee at least one (1) calendar year prior to the date the distribution is to commence, and any change in the form of payment (such as from lump sum to installment) or the timing of the payment must delay or extend the length of the payments and may not accelerate them. If a Participant's employment or Board service with the Employer terminates for any reason prior to receiving full payment of an in-service distribution or while he is receiving scheduled installment payments pursuant to this Section 6.1, the unpaid portion of the Participant's elected distribution shall be paid in accordance with Section 6.3 below.

Notwithstanding anything in this Section 6.1 to the contrary, if a Participant has elected or is receiving an Interim Distribution (as such term is defined in the Schuler Plan) under the Schuler Plan as of the effective date of this Plan, the Participant shall receive or shall continue receiving such distribution in accordance with his election under the Schuler Plan; provided, however, installment payments shall not be made for a period longer than five
(5) years from the first January 1 following the effective date of this Plan.

6.2 Distributions upon Installment Eligibility Age, Death, or Disability. Within ninety (90) days of a Participant's termination of employment with the Employer after attaining Installment Eligibility Age, separation from Board service, or incurring a Disability, the Participant may elect to receive the vested balance credited to his Deferral Account in (i) a single lump sum payment or, (ii) annual installment payments over a period of two (2) to ten (10) years. If a Participant fails to make a distribution election within ninety (90) days following his termination of employment or if the vested balance credited to his Deferral Account is less than $50,000,

payment shall be made in a single lump sum. The amount of each installment payment under (ii) above shall be equal to the balance remaining in the portion of the Participant's Deferral Account that is subject to such installment election (as determined immediately prior to each such payment), multiplied by a fraction, the numerator of which is one (1), and the denominator of which is the total number of remaining installment payments. The installment amount shall be adjusted annually to reflect gains and losses, if any, allocated to such Participant's Deferral Account pursuant to Article 7.

Distributions under this Section 6.2 shall begin as of the first day of the thirteenth (13th) month after the Participant submits his distribution election; provided, however, that a Participant can delay the commencement of distributions to a date no later than the January of the year immediately following his attainment of age 62. In the event a participant dies while receiving installment payments or before distributions have commenced in accordance with this Section 6.2, the unpaid portion of the Participant's Deferral Account shall be paid in accordance with Section 6.3 below.

Any prior retirement or termination of employment elections under the Supplemental Plan or Schuler Plan shall be null and void.

6.3 Termination of Employment. If a Participant's employment with the Employer terminates for any reason (including the Participant's death) prior to the date the Participant attains Installment Eligibility Age or incurs a Disability, the unpaid vested portion of such Participant's Deferral Account shall be paid to the Participant or (in the event of his death) the Participant's designated beneficiary in a single lump sum payment as soon as administratively feasible following the Participant's termination of employment or death.

6.4 Nonscheduled In-Service Withdrawals. Notwithstanding any provision of this Plan to the contrary, a Participant may at any time request a lump sum distribution of all or a portion of his vested Deferral Account. In the event a Participant requests a distribution under this Section 6.4, (i) such Participant will receive a portion of his Deferral Account equal to 90% of the requested distribution, and the remaining 10% of the requested distribution will be forfeited, and (ii) such Participant will be ineligible to participate in the Plan for the remainder of the Plan Year in which the distribution is received and for the immediately following Plan Year.

6.5 Financial Hardship. The Committee shall have the authority to alter the timing or manner of payment of deferred amounts in the event that the Participant establishes, to the satisfaction of the Committee, severe financial hardship. In such event, the Committee may, in its sole discretion, distribute all or a portion of such Participant's Deferral Account to the Participant without penalty.

For purposes of this Section 6.5, "severe financial hardship" shall mean any financial hardship resulting from extraordinary and unforeseeable circumstances arising as a result of one or more recent events beyond the control of the Participant, including, but not limited to, the illness or injury of a Participant or dependent (as determined by the Committee), or the casualty loss of a Participant's real or personal property. In any event, payment under this Section 6.5 may not be made to the extent such emergency is or may be relieved: (i) through reimbursement or compensation by insurance or otherwise;
(ii) by liquidation of the Participant's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship; and (iii) by

cessation of deferrals under the Plan. Withdrawals of amounts because of a severe financial hardship may only be permitted to the extent reasonably necessary to satisfy the hardship, plus to pay taxes on the withdrawal. Examples of what are not considered to be severe financial hardships include the need to send a Participant's child to college or the desire to purchase a home. The Participant's Deferral Account will be credited with earnings in accordance with the Plan up to the date of distribution.

The Committee shall judge the severity of the financial hardship. The Committee's decision with respect to the severity of financial hardship and the manner in which, if at all, the Participant's future deferral opportunities shall be ceased, and/or the manner in which, if at all, the payment of deferred amounts to the Participant shall be altered or modified, shall be final, conclusive, and not subject to appeal.

In the event a Participant receives a distribution under this Section 6.5, then such Participant will be ineligible to participate in the Plan for the remainder of the Plan Year in which the distribution was received.

6.6 Incompetence of Distributee. In the event that it shall be found that a person entitled to receive payment under the Plan (including a designated beneficiary) is a minor or is physically or mentally incapable of personally receiving and giving a valid receipt for any payment due (unless prior claim therefor shall have been made by a duly qualified committee or other legal representative), such payment may be made to any person whom the Committee in its sole discretion determines is entitled to receive it, and any such payment shall fully discharge the Employer, the Company, the Committee and the Plan from any further liability to the person otherwise entitled to payment hereunder, to the extent of such payment.

ARTICLE 7
DEFERRED COMPENSATION ACCOUNTS

7.1 Participants' Accounts. The Company shall establish and maintain an individual bookkeeping Deferral Account for Employee Contributions. Each Deferral Account shall be credited with Employee Contributions generally within five (5) business days of the applicable payroll deduction, and as provided in Section 7.2. The Employee Contributions held in each Participant's Deferral Account shall be one hundred percent (100%) vested at all times.

A Participant's Deferral Account shall also be credited with
(i) compensation deferrals, if any, made under the Supplemental Plan or the Schuler Plan, (ii) Matching Contributions and Discretionary Contributions (as those terms are defined in the Schuler Plan) made on the Participant's behalf under the Schuler Plan, if any, and (iii) any deemed earnings credit to such amounts prior to the effective date of this Plan. (These credits are in lieu of the amounts formerly credited under the Supplemental Plan and Schuler Plan, which are being merged into this Plan.) Participants shall be one hundred percent (100%) vested at all times in the compensation deferrals made under the Supplemental Plan or the Schuler Plan credited to their Deferral Accounts. If a Participant's Deferral Account is credited with Matching Contributions and/or Discretionary Contributions made under the Schuler Plan, the Participant's vested interest in such contributions shall be determined in accordance with the terms of the Schuler Plan.

7.2 Earnings on Deferred Amounts. A Participant's Deferral Account shall be credited with earnings (or losses) based on a deemed investment of the Participant's Deferral Account, as directed by each Participant, which deemed investment shall be in one or more funds among the investment options selected by the Committee from time to time. Deemed earnings (and losses) on a Participant's Deferral Account shall be based upon the daily unit valuation of the funds selected by such Participant, and shall be credited to a Participant's Deferral Account on a monthly basis. Deemed earnings (or losses) shall be paid out to a Participant in accordance with the applicable Deferral Election Form. Any portion of a Participant's Deferral Account which is subject to distribution in installments shall continue to be credited with deemed earnings (or losses) until fully paid out to the Participant.

The Committee reserves the right to change the options available for deemed investments under the Plan from time to time, or to eliminate any such option at any time. A Participant may specify a separate investment allocation with respect to each Deferral Election Form or amended Deferral Election Form. Participants may modify their deemed investment instructions each business day with respect to any portion (whole percentages only) of their Deferral Account; provided they notify the Committee or its designee within the time and in the manner specified by the Committee. Elections and amendments thereto pursuant to this Section 7.2 shall be made in the manner prescribed by the Committee. The Committee reserve the right to credit earnings (or losses) on a basis different from that elected by the Participants.

7.3 Designation of Beneficiary. Each Participant may designate a beneficiary or beneficiaries who, upon the Participant's death, or physical or mental incapacity will receive the amounts that otherwise would have been paid to the Participant under the Plan. All designations shall be signed by the Participant, and shall be in such form as prescribed by the Committee. Each designation shall be effective as of the date delivered to the Committee or its designee by the Participant.

Participants may change their beneficiary designations on such form as prescribed by the Committee. The payment of amounts deferred under the Plan shall be in accordance with the last unrevoked written beneficiary designation that has been signed by the Participant and delivered to the Committee or its designee prior to the Participant's death. Notwithstanding the foregoing, a Participant who is married may not designate a beneficiary other than the Participant's spouse, unless the spouse consents in writing to such alternate beneficiary designation.

In the event that all the beneficiaries named by a Participant pursuant to this Section 7.3 predecease the Participant, the deferred amounts that would have been paid to the Participant or the Participant's beneficiaries shall be paid to the Participant's estate.

In the event a Participant does not designate a beneficiary, or for any reason such designation is ineffective, in whole or in part, the amounts that otherwise would have been paid to the Participant or the Participant's beneficiaries under the Plan shall be paid to the Participant's estate.

ARTICLE 8
TRUST

Nothing contained in this Plan shall create a trust of any kind or a fiduciary relationship between the Employer and any Participant. Nevertheless, the Employer may establish one or more trusts, with such trustee(s) as the Committee may approve, for the purpose of providing for the payment of deferred amounts and earnings thereon. Such trust or trusts may be irrevocable, but the assets thereof shall be subject to the claims of the Employer's general creditors upon the bankruptcy or insolvency of the Employer.

ARTICLE 9
CHANGE IN CONTROL

9.1 Trust and Trustees. Upon the occurrence of a Change in Control, the trust or trusts that may be established by the Employer pursuant to Article 8 shall become irrevocable and the Employer shall not thereafter be permitted to remove, terminate, or change the trustee(s) without the prior written consent of the majority of the Participants, with weighted voting as measured by their account balances.

9.2 Advanced Funding. No later than 30 days after a Change in Control occurs, the Employer shall make a contribution to the trust or trust(s) established pursuant to Article 8 to the extent required to fully fund all benefits that are or may become payable under the Plan, assuming for purposes of this calculation that all Participants retire with 100% vesting, and to fund in advance all administrative, legal, and other costs of maintaining the Plan, in an amount no less than $125,000. No later than December 31 of each Plan Year thereafter, the Employer shall make such additional contributions to the trust or trusts to fully fund the additional benefits that may become payable to Participants or beneficiaries under the Plan and the additional administrative, legal, and other Plan expenses.

9.3 Amendment and Termination. After the occurrence of a Change in Control, the Employer may not amend the Plan without the prior approval of a majority of the Participants. After a Change in Control, the Employer may not terminate the Plan until either (i) all benefits have been paid in full, or (ii) the majority of the Participants approve the same. For purposes hereof, Participants' votes shall be weighted based on their relative Plan account balances.

ARTICLE 10
RIGHTS OF PARTICIPANTS

10.1 Contractual Obligation. The Plan shall create an unfunded, unsecured contractual obligation on the part of the Employer to make payments from the Participants' Deferral Accounts when due. Payment of Deferral Account balances shall be made out of the general assets of the Employer or from the trust or trusts referred to in Article 8 above.

10.2 Unsecured Interest. No Participant or party claiming an interest in deferred amounts of a Participant shall have any interest whatsoever in any specific asset of the Employer. To the extent that any party acquires a right to receive payments under the Plan, such right shall be equivalent to that of an unsecured general creditor of the Employer. Each Participant, by participating hereunder, agrees to waive any priority creditor status for wage

payments with respect to any amounts due hereunder. The Employer shall have no duty to set aside or invest any amounts credited to Participants' Deferral Accounts under this Plan. Accounts established hereunder are solely for bookkeeping purposes and the Employer shall not be required to segregate any funds based on such Accounts.

10.3 Employment. Nothing in the Plan shall interfere with or limit in any way the right of the Employer to terminate a Participant's employment at any time, or confer upon any Participant any right to continue in the employ of the Employer.

ARTICLE 11
WITHHOLDING OF TAXES

The Employer shall have the right to require Participants to remit to the Employer an amount sufficient to satisfy federal, state, and local withholding tax requirements, or to deduct from all payments made pursuant to the Plan (or from a Participant's other Compensation) amounts sufficient to satisfy withholding tax requirements. Employment taxes with respect to amounts deferred hereunder shall be payable in accordance with Code section 3121(v)(2) and may be withheld from a Participant's Compensation even if due prior to the time of a distribution hereunder. The Employer makes no representations, warranties, or assurances and assumes no responsibility as to the tax consequences of this Plan or participation herein.

ARTICLE 12
AMENDMENT AND TERMINATION

Subject to Article 9, the Employer reserves the right to amend, modify, or terminate the Plan (in whole or in part) at any time by action of the Board or the Committee, with or without prior notice. Except as described below in this Article 12, no such amendment or termination shall in any material manner adversely affect any Participant's rights to any amounts already deferred or credited hereunder or deemed earnings thereon, up to the point of amendment or termination, without the consent of the Participant.

The Board may terminate the Plan and commence termination payout for all or certain Participants, or remove certain Employees as Participants, if it is determined by the United States Department of Labor or a court of competent jurisdiction that the Plan constitutes an employee pension benefit plan within the meaning of section 3(2) of ERISA that is not exempt from the provisions of Parts 2, 3, and 4 of Title I of ERISA, or if the IRS otherwise taxes amounts deferred prior to their scheduled payment date. If payout is commenced pursuant to the operation of this Article 12, the payment of deferred amounts and earnings thereon shall be made in the manner selected by each Participant under
Section 6.2 herein (other than the commencement date), as if the Participant had attained Installment Eligibility Age.

ARTICLE 13
MISCELLANEOUS

13.1 Notice. Any notice or filing required or permitted to be given to the Employer under the Plan shall be sufficient if in writing and hand delivered, or sent by registered or certified mail to the D.R. Horton Deferred

Compensation Plan Committee, and if mailed, shall be addressed to the principal executive offices of the Employer. Notice mailed to a Participant shall be at such address as is given in the records of the Employer. Notices to the Employer shall be deemed given as of the date of delivery. Notice to a Participant or beneficiary shall be deemed given as of the date of hand delivery, or if delivery is made by mail, three (3) days following the postmark date.

13.2 Nontransferability. Except as provided in Section 7.3 and this Section 13.2, Participants' rights to deferred amounts and earnings credited thereon under the Plan may not be sold, transferred, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, or pursuant to a domestic relations order, nor shall the Employer make any payment under the Plan to any assignee or creditor of a Participant.

13.3 Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

13.4 Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular, and the singular shall include the plural.

13.5 Costs of the Plan. All costs of implementing and administering the Plan shall be borne by the Employer.

13.6 Successors. All obligations of the Employer under the Plan shall be binding on any successor to the Employer, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Employer.

13.7 Applicable Law. Except to the extent preempted by applicable federal law, the Plan shall be governed by and construed in accordance with the laws of the state of Texas.

ARTICLE 14
ADMINISTRATIVE INFORMATION

14.1 Plan Sponsor and Administrator. The Plan described herein is sponsored by:

D.R. Horton, Inc. 1901 Ascension Blvd., Suite 100 Arlington, Texas 76006

The Company is the plan administrator and named fiduciary. Prior to a Change in Control, the Company has been granted complete fiduciary discretion and authority to administer, operate, and interpret the Plan and make final decisions on such issues as eligibility, payment of benefits, claims, and claims appeals, unless such decisions have been delegated to another party. However, many day-to-day questions can be answered by the Benefits Department.

The agent for the service of legal process for the Plan is the Company.

14.2 Plan Type and Plan Year. Documents and reports for the Plan are filed with the United States Internal Revenue Service and the Department of Labor under Employer Identification Number: 75-2386963.

The official Plan name is the D.R. Horton Deferred Compensation Plan, which, for government purposes, is intended to be an unfunded pension plan maintained by an employer for a select group of management or highly compensated employees. Plan records are maintained on an annual basis and December 31 is the end of the plan year.

14.3 Plan Funding. The Plan is unfunded and unsecured and benefits are paid solely from the Employer's general assets.

ARTICLE 15
ERISA RIGHTS

Certain rights and protections are provided to Plan participants under the Employee Retirement Income Security Act of 1974 (ERISA). These ERISA rights include the following:

(a) Any Plan participant may contact the Benefits Department to examine all Plan documents without charge. These may include the Plan descriptions and all other documents filed with the United States Department of Labor.

(b) Copies of Plan documents and other information may be obtained by writing to the Committee. A reasonable charge may be assessed for these copies.

(c) Each Plan participant has the right to receive a written summary of the Plan's annual financial reports, if any. However, this type of plan is not required to have either an annual financial report or a summary annual report.

(d) An employee may not be discharged or discriminated against to prevent his obtaining a benefit or exercising his ERISA rights.

(e) If a claim for a benefit is denied, in whole or in part, a written explanation from the Committee or a delegated representative will be provided. Each participant has the right to have the plan administrator review and reconsider any denied claim.

The named fiduciary for this Plan is the Company.

Under certain circumstances, outside assistance may be necessary to resolve disputes between a Participant and Plan officials. For example:

(a) If a claim for benefits is denied or ignored, in whole or in part, after a final review, the claim may be submitted to binding arbitration (or, after a Change in Control, to either arbitration or a court, at the Participant's election).

(b) If a participant is discriminated against for pursuing a benefit or exercising his ERISA rights, the participant may seek help from the United States Department of Labor or file an arbitration claim (or, after a Change in Control, either an arbitration claim or a lawsuit, at the Participant's election).

For further information about this statement or about ERISA rights, contact the Benefits Department. Or, you may contact the nearest area office of the Pension and Welfare Benefits Administration, United States Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquires, Pension and Welfare Benefits Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Pension and Welfare Benefits Administration.

IN WITNESS WHEREOF, D.R. Horton, Inc. has caused this document to be executed by its duly authorized officer on June 21, 2002, effective as of the date set forth above.

D.R. HORTON, INC.

D.R. HORTON, INC.

1991 STOCK INCENTIVE PLAN
(As Amended and Restated February 21, 2002)

1. Purpose. The purpose of this Plan is to attract and retain directors, officers, key employees and other agents and consultants for D.R. Horton, Inc. (the "Company") and its Subsidiaries and to provide to such persons incentives and rewards for superior performance.

2. Definitions. As used in this Plan,

"Appreciation Right" means a right granted pursuant to Paragraph 5 of this Plan.

"Award" means an Appreciation Right, an Option Right, an award of Performance Shares, a Performance Unit or an award of Restricted Stock.

"Board" means the Board of Directors of the Company.

"Code" means the Internal Revenue Code of 1986, as in effect from time to time.

"Committee" means the committee to which the Board has delegated its authority to administer this Plan pursuant to Paragraph 13 of this Plan.

"Common Stock" means the Common Stock, par value $.01 per share, of the Company or any security into which such Common Stock may be changed by reason of any transaction or event of the type described in Paragraph 10 of this Plan.

"Company Security" means any security (as that term is defined in Section 2(1) of the Securities Act of 1933) of the Company other than Common Stock.

"Date of Grant" means the date specified by the Board on which a grant of Option Rights, Appreciation Rights, Performance Units or Performance Shares or a grant or sale of Restricted Stock shall become effective (which date shall not be earlier than the date on which the Board takes action with respect thereto).

"ERISA" means the Employee Retirement Income Security Act of 1974, as in effect from time to time.

"Fair Market Value" means the value of any Company Security as determined by the Board in its sole discretion as of the date of any such determination.

"Grant Price" means the price per share of Common Stock at which an Appreciation Right not granted in tandem with an Option Right is granted.

"Management Objectives" means the objectives, if any, established by the Board that are to be achieved with respect to an Award granted under this Plan, which may be described in terms of Company-wide objectives, in terms of objectives that are related to performance of the division, Subsidiary, department or function within the Company or a Subsidiary in which the Participant receiving the Award is employed or in other terms, and which shall relate to the Performance Period determined by the Board. The Board may adjust Management Objectives and any minimum acceptable level of achievement with respect to any Management Objectives if, in the sole judgment of the Board, events or transactions have occurred which are unrelated to the performance of the Participant and result in a distortion of the Management Objectives or such minimum acceptable level of achievement.

"Market Value per Share" means, at any date, the average of the inside bid and asked price of the Common Stock at the close of trading on that date in the principal market in which the Common Stock is traded, or, if no market for the Common Stock exists, the price determined by the Board in its sole discretion at the time of any such determination.

"Option Price" means the price per share payable on exercise of an Option Right.

"Option Right" means the right to purchase a share of Common Stock upon exercise of an option granted pursuant to Paragraph 4 of this Plan.

"Participant" means a person who is selected by the Board to receive benefits under this Plan and who is at the time a director, officer, key employee, consultant or agent of the Company or any of its Subsidiaries, or who has agreed to commence serving in any such capacity within 90 days of the Date of Grant. Notwithstanding the foregoing, no non-employee director of the Company shall be eligible to receive any benefit under this Plan if he or she would thereby cease to be a "non-employee director" as that term is defined in Rule 16b-3.

"Performance Period" means, in respect of an Award, a period of time established by the Board within which the Management Objectives relating to such Award are to be achieved.

"Performance Shares" means shares of Common Stock granted pursuant to Paragraph 8 of this Plan.

"Performance Unit" means a unit of specified dollar amount established by the Board and awarded pursuant to Paragraph 7 of this Plan.

"Restricted Stock" means shares of Common Stock granted or sold pursuant to Paragraph 6 of this Plan as to which neither the substantial risk of forfeiture nor the restrictions on transfer referred to therein has expired.

"Rule 16b-3" means Rule 16b-3 of the Securities and Exchange Commission (or any successor rule to the same effect) as in effect from time to time.

"Spread" means the excess of the Market Value per Share on the date when an Appreciation Right is exercised over (a) the Option Price provided for in the related Option Right or (b) if there is no tandem Option Right, the Grant Price provided for in the Appreciation Right, multiplied by the number of shares of Common Stock in respect of which the Appreciation Right is exercised.

"Subsidiary" means any corporation, trust, joint venture, partnership or other unincorporated entity in which, at the time, the Company owns or controls, directly or indirectly, (i) in the case of a corporation, not less than 50% of the total combined voting power represented by all classes of stock issued by such corporation, or
(ii) in the case of a trust, joint venture, partnership or other unincorporated entity, not less than 50% of the beneficial interest of such entity.

3. Shares Available Under Plan. The shares of Common Stock and any other Company Security which may be (a) sold upon the exercise of Option Rights, (b) delivered upon the exercise of Appreciation Rights, (c) granted or sold as Restricted Stock and released from substantial risks of forfeiture and restrictions on transfer thereof or (d) delivered in payment of any Performance Units or as Performance Shares (or in lieu thereof), shall not exceed in the aggregate 9,640,373 shares, subject to adjustment as provided in Paragraph 10 of this Plan. Such shares may be shares of original issuance or treasury shares or a combination of the foregoing. Upon exercise of any Appreciation Rights, there shall be deemed to have been delivered under this Plan for purposes of this Paragraph 3 the number of shares of Common Stock covered by the Appreciation Rights or the related Option Rights, regardless of whether such Appreciation Rights were paid in cash, Company Securities or shares of Common Stock. Subject to the provisions of the preceding sentence, any shares of Common Stock which are subject to Option Rights or Appreciation Rights or are awarded or sold as Restricted Stock that are terminated, unexercised, forfeited or surrendered or which expire for any reason will again be available for issuance under this Plan. Notwithstanding the foregoing, the number of shares of Common Stock underlying Awards made to a single Participant during a calendar year shall not exceed 300,000.

4. Option Rights. The Board may, from time to time and upon such terms and conditions as it may determine, authorize the granting to Participants of options to purchase shares of Common Stock. Each such grant may utilize any or all of the authorizations, and shall be subject to all of the limitations, contained in the following provisions:

(a) Each grant shall specify the number of shares of Common Stock to which it pertains. Notwithstanding any other provision of the Plan, the aggregate Fair Market Value (determined at the time of grant of the Option Rights) of Common Stock with respect to which a Participant may be granted Option Rights intended to qualify for favorable tax treatment under Code Section 421(a) in any calendar year shall not exceed $100,000.

(b) Each grant shall specify the Option Price, which shall not be less than 50% of the Market Value per Share on the Date of Grant; provided, however, that the foregoing limitation shall not apply with respect to Option Rights granted for the purpose of issuing or assuming an Option Right, pursuant to a merger, consolidation, acquisition of property or stock, other business combination, separation, reorganization or liquidation, in the manner described in Code Section 424(a).

(c) Each grant shall specify that the Option Price shall be payable (i) in cash or by check acceptable to the Company,
(ii) by the transfer to the Company of shares of Common Stock having an aggregate Market Value per Share at the time of exercise equal to the aggregate Option Price or (iii) by a combination of such methods of payment. Any grant may provide for deferred payment of the Option Price from the proceeds of sale through a broker on the exercise date of some or all of the shares to which such exercise relates.

(d) Successive grants may be made to the same Participant whether or not any Option Rights previously granted to such Participant remain unexercised.

(e) Each grant shall specify the required period or periods of continuous service by the Participant with the Company or any Subsidiary and/or the Management Objectives to be achieved before the Option Rights or installments thereof will become exercisable.

(f) Each grant the exercise of which, or the timing of the exercise of which, is dependent, in whole or in part, on the achievement of Management Objectives may specify a minimum level of achievement in respect of the specified Management Objectives below which no Options Rights will be exercisable and may set forth a formula or other method for determining the number of Option Rights that will be exercisable if performance is at or above such minimum but short of full achievement of the Management Objectives.

(g) Option Rights granted under this Plan may be
(i) options which are intended to qualify under particular provisions of the Code, (ii) options which are not intended to so qualify or
(iii) combinations of the foregoing.

(h) No Option Right shall be exercisable more than ten years from the Date of Grant.

(i) Each grant of Option Rights shall be evidenced by an agreement executed on behalf of the Company by any officer and delivered to the Participant and containing such terms and provisions, consistent with this Plan, as the Board may approve.

5. Appreciation Rights. The Board may also authorize the granting to any Participant of Appreciation Rights. Appreciation Rights may be granted in tandem with Option Rights or separate and apart from a grant of Option Rights. An Appreciation Right shall be a right of the Participant who has been granted such Award to receive from the Company upon exercise an amount which shall be determined by the Board at the Date of Grant and shall be expressed as a percentage of the Spread (not exceeding 100%) at the time of exercise. An Appreciation Right granted in tandem with an Option Right may be exercised only by surrender of the related Option Right. Each grant of an Appreciation Right may utilize any or all of the authorizations, and shall be subject to all of the limitations, contained in the following provisions:

(a) Each grant shall state whether it is made in tandem with Option Rights and, if not made in tandem with any Option Rights, shall specify the number of shares of Common Stock in respect of which it is made.

(b) Each grant made in tandem with Option Rights shall specify the Option Price and each grant not made in tandem with Option Rights shall specify the Grant Price, which in either case shall not be less than 50% of the Market Value per Share on the Date of Grant; provided, however, that the foregoing limitation on the Option Price and Grant Price shall not apply with respect to Appreciation Rights granted for the purpose of issuing or assuming a grant of Appreciation Rights, pursuant to a merger, consolidation, acquisition of property or stock, other business combination, separation, reorganization or liquidation, in the manner described in Code Section 424(a).

(c) Any grant may specify that the amount payable on exercise of an Appreciation Right may be paid by the Company in
(i) cash, (ii) shares of Common Stock having an aggregate Market Value per Share equal to the Spread, (iii) Company Securities having an aggregate Fair Market Value equal to the Spread or (iv) any combination thereof, as determined by the Board in its sole discretion at the time of payment.

(d) Any grant may specify that the amount payable on exercise of an Appreciation Right (valuing shares of Common Stock for this purpose at their Market Value per Share at the date of exercise and valuing Company Securities for this purpose at their Fair Market Value at the date of exercise) may not exceed a maximum specified by the Board at the Date of Grant.

(e) Each grant shall specify the required period or periods of continuous service by the Participant with the Company or any Subsidiary and/or Management Objectives to be achieved before the Appreciation Rights or installments thereof will become exercisable, and shall provide that no Appreciation Right may be exercised except at a time when the Spread is positive and, with respect to any grant made in tandem with Option Rights, when the related Option Right is also exercisable.

(f) Each grant the exercise of which, or the timing of the exercise of which, is dependent, in whole or in part, on the achievement of Management Objectives may specify a minimum level of achievement in respect of the specified Management Objectives below which no Appreciation Rights will be exercisable and may set forth a formula or other method for determining the number of Appreciation Rights that will be exercisable if performance is at or above such minimum but short of full achievement of the Management Objectives.

(g) Each grant of an Appreciation Right shall be evidenced by a notification executed on behalf of the Company by any officer and delivered to and accepted by the Participant receiving the grant, which notification shall describe such Appreciation Right, identify any Option Right granted in tandem with such Appreciation Right, state that such Appreciation Right is subject to all the terms and conditions of this Plan and contain such other terms and provisions, consistent with this Plan, as the Board may approve.

6. Restricted Stock. The Board may also authorize the granting or sale to Participants of Restricted Stock. Each such grant or sale may utilize any or all of the authorizations, and shall be subject to all of the limitations, contained in the following provisions:

(a) Each such grant or sale shall constitute an immediate transfer of the ownership of shares of Common Stock to the Participant in consideration of the performance of services, entitling such Participant to voting, dividend and other ownership rights, but subject to the substantial risk of forfeiture and restrictions on transfer hereinafter referred to.

(b) Each such grant or sale may be made without additional consideration or in consideration of a payment by such Participant that is less than the Market Value per Share at the Date of Grant.

(c) Each such grant or sale shall provide that the shares of Restricted Stock covered by such grant or sale shall be subject, for a period to be determined by the Board at the Date of Grant, to a "substantial risk of forfeiture" within the meaning of
Section 83 of the Code and the regulations of the Internal Revenue Service thereunder.

(d) Each such grant or sale shall provide that during the period for which such substantial risk of forfeiture is to continue, the transferability of the Restricted Stock shall be prohibited or restricted in a manner and to the extent prescribed by the Board at the Date of Grant (which restrictions may include, without limiting the generality of the foregoing, rights of repurchase or first refusal in the Company or provisions subjecting the Restricted Stock to a continuing substantial risk of forfeiture in the hands of any transferee).

(e) Each grant or sale of Restricted Stock shall be evidenced by an agreement executed on behalf of the Company by any officer and delivered to and accepted by the Participant and shall contain such terms and provisions, consistent with this Plan, as the Board may approve.

(a) Each grant shall specify the number of Performance Units to which it pertains.

(b) Each grant shall specify the Management Objectives that are to be achieved by the Participant.

(c) Each grant shall specify a minimum acceptable level of achievement in respect of the specified Management Objectives below which no payment will be made and may set forth a formula or other method for determining the amount of the payment to be made if performance is at or above such minimum but short of full achievement of the Management Objectives.

(d) Each grant shall specify the time and manner of payment of Performance Units which have become payable, which payment may be made in (i) cash, (ii) shares of Common Stock having an aggregate Market Value per Share equal to the aggregate value of the Performance Units which have become payable, (iii) Company Securities having an aggregate Fair Market Value equal to the aggregate value of the Performance Units which have become payable or (iv) any combination thereof, as determined by the Board in its sole discretion at the time of payment.

(e) Each grant of a Performance Unit shall be evidenced by a notification executed on behalf of the Company by any officer and delivered to and accepted by the Participant, which notification shall describe the Performance Units, state that such Performance Units are subject to all the terms and conditions of this Plan, and contain such other terms and provisions, consistent with this Plan, as the Board may approve.

8. Performance Shares. The Board may also authorize the granting to Participants of Performance Shares. Each such grant may utilize any or all of the authorizations, and shall be subject to all of the limitations, contained in the following provisions:

(a) Each grant shall specify the number of Performance Shares to which it pertains.

(b) Each grant shall specify the Management Objectives that are to be achieved by the Participant.

(c) Each grant shall specify a minimum acceptable level of achievement in respect of the specified Management Objectives below which no delivery of Performance Shares will occur and may set forth a formula or other method for determining the number of Performance Shares to be delivered if performance is at or above such minimum but short of full achievement of the Management Objectives.

(d) Each grant shall specify the time and manner of delivery of Performance Shares which have been earned, provided that in lieu of the delivery of all or any Performance Shares, the Participant may receive (i) cash in an amount equal to the aggregate Market Value per Share of the Performance Shares, (ii) Company Securities having an aggregate Fair Market Value equal to the aggregate Market Value per Share of the Performance Shares or
(iii) any combination thereof, as determined by the Board in its sole discretion at the time of payment.

(e) Each grant of Performance Shares shall be evidenced by a notification executed on behalf of the Company by any officer and delivered to and accepted by the Participant, which notification shall state that such Performance Shares are subject to all the terms and conditions of this Plan and contain such other terms and provisions, consistent with this Plan, as the Board may approve.

9. Transferability. No Option Right, Appreciation Right, Performance Unit that has not become payable or Performance Share that has not been delivered shall be transferable by a Participant other than by will or the laws of descent and distribution. Option Rights or Appreciation Rights shall be exercisable during the Participant's lifetime only by the Participant or by the Participant's guardian or legal representative.

10. Adjustments. The Board may make or provide for such adjustments in the maximum number of shares specified in Paragraph 3 of this Plan, in the numbers of shares of Common Stock covered by outstanding Option Rights, Appreciation Rights, awards of Restricted Stock, awards of Performance Units and awards of Performance Shares granted hereunder, and/or in the Option Price or Grant Price applicable to such Option Rights and Appreciation Rights, as the Board in its sole discretion, exercised in good faith, may determine is equitably required to prevent dilution or enlargement of the rights of Participants that otherwise would result from any stock dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the Company, merger, consolidation, spin-off, reorganization, partial or complete liquidation, issuance of rights or warrants to purchase securities or any other corporate transaction or event having an effect similar to any of the foregoing.

11. Fractional Shares. The Company shall not be required to issue any fractional share of Common Stock or of any Company Security pursuant to this Plan. The Board may provide for the elimination of fractions or for the settlement of fractions in cash.

12. Withholding Taxes. To the extent that the Company is required to withhold federal, state, local or foreign taxes in connection with any payment made or benefit realized by a Participant or other person under this Plan, and the amounts available to the Company for such withholding are insufficient, it shall be a condition to the receipt of such payment or the realization of such benefit that the Participant or such other person make arrangements satisfactory to the Company for payment of the balance of such taxes required to be withheld, which arrangements in the discretion of the Board may include relinquishment of a portion of such benefit.

13. Administration of the Plan. (a) This Plan shall be administered by the Board, which may from time to time delegate all or any part of its authority under this Plan to a committee of not less than two non-employee directors appointed by the Board, each of whom shall be a "non-employee director" within the meaning of Rule 16b-3 (the "Committee"). To the extent of such delegation, references herein to the "Board" shall include the Committee. A majority of the Committee shall constitute a quorum, and the action of the members of the Committee present at any meeting at which a quorum is present, or acts unanimously approved in writing, shall be the acts of the Committee.

(b) The interpretation and construction by the Board of any provision of this Plan or of any agreement, notification or document evidencing the grant of an Award and any determination by the Board pursuant to any provision of this Plan or of any such agreement, notification or document shall be final and conclusive. No member of the Board or the Committee shall be liable for any such action or determination made in good faith.

(c) Notwithstanding any other provision of this Plan, this Plan may be administered by the Chairman of the Board of the Company with respect to matters relating solely to Participants who are not subject to the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934, as amended, and any references to the "Board" or the "Committee", as the case may be, shall include the Chairman of the Board; provided, however, that no such authority shall be deemed to have been granted hereunder to the extent that any such grant shall cause the disqualification of this Plan from reliance on the exemption provided by Rule 16b-3.

14. Amendments, Etc. (a) This Plan may be amended from time to time by the Board but may not be amended by the Board without further approval by the stockholders of the Company if such amendment would result in this Plan no longer satisfying the requirements of Rule 16b-3.

(b) The Board may, with the concurrence of the affected Participant, cancel any agreement evidencing any Award granted under this Plan. In the event of such cancellation, the Board may authorize the granting of new Awards (which may or may not cover the same number of shares or units which had been the subject of the prior Award) in such manner, at such price and subject to the same terms, conditions and discretions as would have been applicable under this Plan had the canceled Awards not been granted.

(c) In case of termination of employment by reason of death, disability or retirement under a retirement plan of the Company or a Subsidiary of an Optionee who holds an Option Right or Appreciation Right not immediately exercisable in full, or any Restricted Stock as to which the substantial risk of forfeiture or the prohibition or restriction on transfer has not lapsed, or any Performance Units which have not become fully payable or any Performance Shares that have not been delivered, the Board may, in its sole discretion, accelerate the time at which such Option Right or Appreciation Right may be exercised or the time at which such substantial risk of forfeiture or prohibition or restriction on transfer will lapse or the time at which such Performance Units will be deemed to have become fully payable or Performance Shares will be delivered.

(d) This Plan shall not confer upon any Participant any right with respect to continuance of employment or other service with the Company or any Subsidiary, nor shall it interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate such Participant's employment or other service at any time.

D.R. HORTON, INC.

1991 STOCK INCENTIVE PLAN

(As Restated February 21, 2002)

AMENDMENT NO. 1

As of March 4, 2002, the Board of Directors of D.R. Horton, Inc. declared a three-for-two stock split payable in shares of its common stock on April 9, 2002. To give effect to such stock split, the Committee has amended the D.R. Horton, Inc. 1991 Stock Incentive Plan, as amended and restated (the "Plan"), in the following respects:

1. The first sentence of Paragraph 3 of the Plan is hereby amended to read in its entirety as follows:

The shares of Common Stock and any other Company Security which may be (a) sold upon the exercise of Option Rights, (b) delivered upon the exercise of Appreciation Rights, (c) granted or sold as Restricted Stock and released from substantial risks of forfeiture and restrictions on transfer thereof or (d) delivered in payment of any Performance Units or as Performance Shares (or in lieu thereof), shall not exceed in the aggregate 12,557,265 shares, subject to adjustment as provided in Paragraph 10 of this Plan.

2. In all other respects, the Plan as previously approved is hereby ratified and confirmed.

April 9, 2002.

D.R. Horton, Inc.

By: /s/ Samuel R. Fuller
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   Samuel R. Fuller, Executive Vice President,
   Treasurer and Chief Financial Officer


Attest:

   /s/ Paul W. Buchschacher
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Paul W. Buchschacher, Assistant Secretary