HORTON D R INC /DE/ (Form: 8-K, Received: 02/15/2008 17:19:42)

D. R. Horton, Inc.

Date: February 15, 2008

/ S / B ILL W. W HEAT

Bill W. Wheat

Executive Vice President and

Chief Financial Officer

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 11, 2008

D.R. Horton, Inc.

(Exact name of registrant as specified in its charter)

Delaware

1-14122

75-2386963

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

301 Commerce Street, Suite 500, Fort Worth, Texas 76102

(Address of principal executive offices)

Registrant’s telephone number, including area code: (817) 390-8200

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.

Entry into a Material Definitive Agreement.

On February 11, 2008, D.R. Horton, Inc. (the “Company”) adopted a new form of Performance Unit Award under the Company’s 2008 Performance Unit Plan. The form of Performance Unit Award is attached hereto as Exhibit 10.1 and is incorporated herein by reference. The form of Performance Unit Award is discussed in more detail in Item 5.02 of this report.

On February 11, 2008, the Company also adopted new forms of non-qualified stock option agreements for employees and outside directors under the Company’s 2006 Stock Incentive Plan. The forms were amended to allow participants, under certain circumstances, to exercise options and satisfy the exercise price and withholding taxes through a net exercise or net issuance provision or a stock surrender provision. The forms were effective on February 11, 2008, and will be used for grants of non-qualified stock options on February 11, 2008 and in the future. Copies of the new forms of non-qualified stock option agreements for employees and outside directors are attached hereto as Exhibits 10.2 and 10.3, respectively, and are incorporated by reference herein.

Item 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

5.02(e)

Compensatory Arrangements of Certain Officers

2008 Performance Unit Plan .

On December 3, 2007, the Compensation Committee of the Board of Directors adopted, the Company’s 2008 Performance Unit Plan (the “2008 Plan”) and on January 31, 2008, at the Company’s 2008 annual meeting of stockholders, the stockholders approved the 2008 Plan.

On February 11, 2008, the Compensation Committee made an award of long-term performance units (“Performance Units”) under the 2008 Plan to each of the executives listed in Table 1 below. The current value of each Performance Unit is based on the closing price of our common stock on the New York Stock Exchange (“NYSE”) on the award date of February 11, 2008. The final payout value of these Performance Units will be determined after the performance period (January 1, 2008 to September 30, 2010, the “Performance Period”)) is completed, after the Committee evaluates the achievement of the performance goals and based on the closing price of our common stock on the NYSE on September 30, 2010. The performance goals established for the Performance Units are relative return on investment (“ROI”) and relative net sales gains percentage (units) (“NSG%”), as compared to the same metrics of the Company’s peer group, which consists of ten other publicly traded homebuilding companies.

Table I


Name	Office	Current Value (per unit)	Long-Term Performance Units (#)
Donald R. Horton	Chairman of the Board	$14.50	300,000

Donald J. Tomnitz	Vice Chairman, President and CEO	$14.50	200,000

The Performance Units will not vest until the end of the Performance Period and may be adjusted upward (up to 200%) or downward (to 0) from the target number (listed in Table 1) of Performance Units based (a) 50% on the Company’s relative ROI, and (b) 50% on the Company’s relative NSG% compared to its peer group. The adjusted number of Performance Units will then be multiplied by the closing price of our common stock on the last day of the Performance Period of September 30, 2010 and the final payout amount may be paid in cash, equity or a combination of both. The performance goal rankings (minimum, target and maximum), hurdle rates (if rank 9 ^th , 10 ^th or 11 ^th place the payout will be $0), performance metrics definitions and other terms and conditions of the award of the Performance Units are set forth in the form of award filed herewith as Exhibit 10.1, which is incorporated herein by reference.

As previously reported on Form 4 for each reporting person discussed below and filed with the Securities and Exchange Commission on February 13, 2008, on February 11, 2008, the Compensation Committee granted non-qualified stock options to executive officers of the Company as follows: 300,000 options to Donald R. Horton; 200,000 options to Donald J. Tomnitz; 120,000 options to Bill W. Wheat, Executive Vice President and Chief Financial Officer; and 120,000 options to Stacey H. Dwyer, Executive Vice President and Treasurer. The options granted to Mr. Horton and Mr. Tomnitz have a vesting period of five years with a 10-year term and the options granted to Mr. Wheat and Ms. Dwyer have a vesting period of 9.75 years with a 10-year term. The options were granted at an exercise price of $14.50 per share, the closing price of the Company’s common stock on the NYSE on the date of grant.

On February 11, 2008, the Company adopted new forms of non-qualified stock option agreements for employees and outside directors under the Company’s 2006 Stock Incentive Plan. These forms are discussed in more detail in Item 1.01 of this report. Item 1.01 of this report is incorporated by reference into this Item 5.02.

Item 9.01.

Financial Statements and Exhibits.

(d)

Exhibit



10.1		Form of Performance Unit Award pursuant to the D.R. Horton, Inc. 2008 Performance Unit Plan.

10.2		Form of Non-Qualified Stock Option Agreement (Employee-Term Vesting) pursuant to the D.R. Horton, Inc. 2006 Stock Incentive Plan.

10.3		Form of Non-Qualified Stock Option Agreement (Outside Director-Term Vesting) pursuant to the D.R. Horton, Inc. 2006 Stock Incentive Plan.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Exhibit 10.1

D.R. Horton, Inc.

Performance Unit Award

2008 Performance Unit Plan

[2.75-]Year Performance Unit Award

Dear :

You have been granted a Performance Unit Award as of , 200X by D.R. Horton, Inc. (the “Company”) of Bonus Units under the D.R. Horton 2008 Performance Unit Plan (the “Plan”) , subject to the terms and conditions of the Plan and this Performance Unit Award (referred to herein as “Award” or “Performance Unit Award”) . Bonus Units are defined under the Plan and such Bonus Units are referred to in this Award as “Performance Units”. A copy of the Plan is attached to this Award.

This Award is subject to adjustment and other provisions as set forth on Exhibit A hereto (the “Terms and Conditions”) . Depending on the Company’s achievement of the performance goals specified in the Terms and Conditions during the period beginning [January 1, 2008 and ending September 30, 2010] (the “Performance Period”) , you shall be entitled to a payment (in the form of cash, equity or a combination of both) equal to the value of your adjusted number of Performance Units as of the last business day of the Performance Period determined under the Terms and Conditions, less deductions for taxes and withholdings required by law, except as otherwise provided herein.

For purposes of the Plan, (a) this Award is an award of Performance-Based Compensation Award that may be settled in cash, equity or a combination of both, and (b) amounts payable hereunder will not bear interest or be entitled to dividends payable on Common Stock. This Award is given to you as part of your compensation, but is neither voluntary nor contributory by you. This Award is subject to the Plan in all respects, and the Compensation Committee will decide on the interpretation of any provision of this Award if there is any ambiguity between the Plan and this Award. The provisions of the Plan are also provisions of this Award, and all terms, provisions and definitions set forth in the Plan are incorporated in this Award and made a part of this Award for all purposes. Capitalized terms used but not defined in this Award will have the meanings assigned to such terms in the Plan.

Exhibit A to Performance Unit Award — Terms and Conditions of Award

1.	Award .

(a) The amount that may be paid to you with respect to the Performance Units shall be based upon the Company’s achievement of the following performance goals (“Performance Goals”) over the Performance Period as determined by the Compensation Committee of the Board of Directors of the Company (or any successor thereto) (the “Committee”) : (i) Relative Return on Investment (“ROI”) (as defined in Section 4), and (ii) Relative Net Sales Gains Percentage (“NSG%”) (as defined in Section 4), in accordance with the following matrix:


Relative Return on Investment *(“ROI”)*
Performance Level Compared to Peer Group	Payout	Performance Percentage
1 ^st Place	Maximum	200%
2 ^nd Place		175%
3 ^rd Place		150%
4 ^th Place		125%
5 ^th Place	Target	100%
6 ^th Place		75%
7 ^th Place		50%
8 ^th Place		25%
9 ^th Place	Minimum	0%
10 ^th Place		0%
11 ^th Place		0%


Relative Net Sales Gains Percentage *(“NSG%”)*
Performance Level Compared to Peer Group	Payout	Performance Percentage
1 ^st Place	Maximum	200%
2 ^nd Place		175%
3 ^rd Place		150%
4 ^th Place		125%
5 ^th Place	Target	100%
6 ^th Place		75%
7 ^th Place		50%
8 ^th Place		25%
9 ^th Place	Minimum	0%
10 ^th Place		0%
11 ^th Place		0%

(b) After adjustment for forfeitures as provided in Section 2, the number of Performance Units granted to you will be adjusted based on Relative ROI and Relative NSG% (“Performance Percentage”) as provided in this Section. The adjusted number of Performance Units to which you will be entitled shall be equal to the number of Performance Units granted hereunder

multiplied by the product of (i) 0.5 and (ii) the sum of the Performance Percentages set forth in Section 1(a) for the level of achievement of each of the performance goals therein (such product the “Adjusted Performance Percentage”). Notwithstanding the foregoing, the maximum number of Performance Units you can earn will be an aggregate of 200% of the original number granted to you, and the minimum number of Performance Units that will be awarded is zero. By way of example, assuming an initial grant of 200,000 Performance Units:

(1)

if the Company reached 1 ^st place in Relative ROI and 3 ^rd place in Relative NSG%, the sum of the Performance Percentages would be 350% (200% plus 150%) and the adjusted number of your Performance Units would be 350,000 ((350% x 0.5) x 200,000 units).

(2)

if Relative ROI reached 3 ^rd place and Relative NSG% reached 5 ^th place, the sum of the Performance Percentages would be 250% (150% plus 100%) and the adjusted number of your Performance Units would be 250,000 ((250% x 0.5) x 200,000 units).

(c) (i) Except as provided in Section 2, the adjusted number of Performance Units, determined as provided in Section 1(b), will be multiplied by the Fair Market Value of the Company’s Common Stock on the last business day of the Performance Period (if payable in cash), or using the number of shares of the Company’s Common Stock (or fully vested Restricted Stock Units for deferred payments), equal to the adjusted number of Performance Units (if payable in equity), and may be further adjusted as provided in Sections 1(c)(iii) and (iv) below. Payment of amounts due under this Award shall be made to you as soon as practicable but no later than 30 days following certification by the Committee as set forth below, unless you timely elect a deferred payment in the manner and within the time frames specified by the Committee and in compliance with Code Section 409A (the “Payout Date”) . In the event of your death prior to the Payout Date, any amount payable to you under the Award will be paid to your designated beneficiary or, if none, to your estate. Prior to any payments under this Award, the Committee shall certify in writing, by resolution or otherwise, that the performance goals and any other material terms of the Award were in fact satisfied and the amount to be paid in respect of the Performance Units as a result of the achievement of the performance goals.

(ii) Any amount paid in respect of this Award may be paid in cash, equity or a combination of both. If, after the final value of the Award is determined, the Committee determines to pay a portion of the earned award in equity, the number of shares to be awarded will be determined by dividing the closing price of the Company’s common stock on the day of the certification of the Award by the Committee into the dollar value of that portion of the Award to be paid in equity, provided that the maximum award cannot exceed the limits established under the Plan or the Company’s 2006 Stock Incentive Plan (the “2006 Plan”).

(iii) The Committee shall not increase the amount payable to you to an amount that is higher than the amount payable under the formula described herein. The Committee may take into account normalization related adjustments to the above performance metrics and goals and each of the definitions in Section 4 in order to provide a relevant and consistent comparison to the performance metrics and goals of the Company’s Peer Group. For example, normalization related adjustments to take into account unconsolidated joint ventures, extraordinary items or transactions, asset write-offs, valuation allowances or impairments among the Peer Group.

(iv) Prior to paying the Award, the Committee reserves the discretion to adjust downward the Award depending a variety of factors, including (i) the level of the Company’s consolidated pre-tax income or loss on both an adjusted and non-adjusted basis, (ii) the compensation earned by the participant in comparison to the compensation earned by other Company executives and executives of the Company’s Peer Group, (iii) the participant’s overall

compensation, (iv) the participant’s individual performance, and (v) other factors listed in the 2008 Plan.

(d) The Company may cancel and revoke this Award and/or replace it with a revised award at any time if the Company determines, in its good faith judgment, that this Award was granted in error or that this Award contains an error. In the event of such determination by the Company, and written notice thereof to you at your business or home address, all of your rights and all of the Company’s obligations as to any unvested portion of this Award shall immediately terminate. If the Company replaces this Award with a revised award, then you will have all of the benefits conferred under the revised award, effective as of such time as the revised award goes into effect.

2.	Early Termination and Change in Control .

(a) If your employment terminates before the last day of the Performance Period as a result of your voluntary or involuntary termination or retirement, then you shall forfeit as of the date of your termination of employment a number of Performance Units determined by multiplying the number of Performance Units granted to you by a fraction, (x) the numerator of which is the number of whole months following the date of termination to the end of the Performance Period and (y) the denominator of which is thirty-three (33). The resulting number of Performance Units shall be adjusted upward or downward by the applicable Adjusted Performance Percentage based on the Company’s achievement of the Performance Goals as of the end of the Performance Period, and the value of the adjusted number of Performance Units, using the Fair Market Value as of the last day of the Performance Period (if payable in cash), or using the number of shares of the Company’s Common Stock (or fully vested Restricted Stock Units for deferred payments) equal to the adjusted number of Performance Units (if payable in equity), shall be payable on the Payment Date, after being certified by the Committee.

(b) If your employment terminates before the last day of the Performance Period as a result of your death or disability (as determined by the Committee in its sole discretion), or if you are disabled for more than 3 months during the Performance Period (whether or not your employment terminates), then you shall forfeit a number of Performance Units determined by multiplying the number of Performance Units granted to you by a fraction, (x) the numerator of which is the number of whole months following the date of death or Disability to the end of the Performance Period (or, if you returned to employment before the end of the Performance Period, the number of whole months you were on disability), and (y) the denominator of which is thirty-three (33). The resulting number of Performance Units shall be adjusted upward or downward by the applicable Adjusted Performance Percentage based on the Company’s achievement of the Performance Goals as of the end of the Performance Period, and the value of the adjusted number of Performance Units, using the Fair Market Value as of the last day of the Performance Period (if payable in cash), or using the number of shares of the Company’s Common Stock (or fully vested Restricted Stock Units for deferred payments) equal to the adjusted number of Performance Units (if payable in equity), shall be payable on the Payment Date, after being certified by the Committee.

(c) The Committee or its designee shall determine the number of Performance Units forfeited pursuant to the applicable subparagraph of this Section and the amount to be paid to you or your beneficiary in accordance with this Section. Except as provided in Section 2, amounts payable hereunder will be paid on the Payout Date.

(d) If there is a Change in Control (as defined in the Plan) during the Performance Period, you shall be deemed to have achieved the level of performance as determined by the Committee for the Performance Goals for the Performance Period in accordance with the terms of the Plan, with the deemed Adjusted Performance Percentage being multiplied by the number of your Performance Units and the Fair Market Value of the Company’s common stock on the day immediately prior to the Change in Control, and then prorated for the number of months in the Performance Period up to the Change in Control over 33 months, as more fully set forth in the Plan. Payments of the amount due to you under this Award shall be made to you as soon as administratively practicable following the Change in Control, but in no event later than 60 days following the end of the calendar year in which such Change in Control occurs.

(e) If you are terminated for cause, as determined by the Committee, you shall immediately forfeit all Performance Units.

3.	Miscellaneous .

(a) You understand and acknowledge that you are one of a limited number of employees of the Company who have been selected to receive Performance Awards and that this grant is considered confidential information. You hereby covenant and agree not to disclose the award to you of this Award to any other person except (i) your immediate family and legal or financial advisors who agree to maintain the confidentiality of this Award, (ii) as required in connection with the administration of this Award and the Plan as it relates to this Award or under applicable law, or (iii) to the extent the terms of this Award had been publicly disclosed by the Company.

(b) The Company shall be entitled to make all lawful deductions from any payment it is required to make to you under this Award in respective applicable federal, state, local or employment taxes, Social Security and Medicare.

(c) The authority to manage and control the operation and administration of this Award shall be vested in the Committee, and the Committee shall have all powers with respect to this Award as it has with respect to the Plan. Any interpretation of this Award by the Committee and any decision made by it with respect to this Award shall be final and binding on all persons.

(d) This Award and any deferral elections hereunder shall be construed and interpreted to comply with or be exempt from Section 409A of the Code. The Company reserves the right, without your prior consent, to modify or amend this Award to the extent it reasonably determines is necessary in order to (i) preserve the intended tax consequences of the Performance Units in light of Section 409A of the Code and any regulations or other guidance promulgated thereunder, or (ii) correct, with the consent of the Committee, unintentional design errors. In addition, the Committee reserves the right, without your prior consent, to reduce the amount payable under this Award to the extent it deems necessary taking into account competitive performance and

other factors. Such modifications or amendments may limit or eliminate certain rights otherwise available to you under the Plan or this Award. Neither the Company nor members of the Committee shall be liable for any determination or action taken or made with respect to this Award or the Performance Units granted hereunder.

(e) Neither this Award nor your rights hereunder shall be transferable during your life other than by will, pursuant to the applicable laws of descent and distribution or as provided in your beneficiary designation form, unless otherwise provided in the Plan. None of your rights or privileges in connection with this Award shall be transferred, assigned, pledged or hypothecated by you or by any other person in any way, whether by operation of law, or otherwise, and shall not be subject to execution, attachment, garnishment or similar process. In the event of any such occurrence, this Award shall automatically be terminated and shall thereafter be null and void.

(f) Nothing in this Award shall confer upon you any right to continued employment with the Company or any of its subsidiaries, or to interfere in any way with the right of the Company to terminate your employment relationship with the Company or any of its subsidiaries at any time.

(g) If any term or provision of this Award shall at any time or to any extent be invalid, illegal or unenforceable in any respect as written, you and the Company intend for any court construing this Award to modify or limit such provision so as to render it valid and enforceable to the fullest extent allowed by law. Any such provision that is not susceptible of such reformation shall be ignored so as not to affect any other term or provision hereof, and the remainder of this Award, or the application of such term or provision to persons or circumstances other than those as to which it has held invalid, illegal or unenforceable, shall not be affected thereby and each term and provision of this Award shall be valid and enforced to the fullest extent permitted by law.

(h) The Company’s obligation under the Plan and this Award is an unsecured and unfunded promise to pay benefits that may be earned in the future. The Company shall have no obligation to set aside, earmark or invest any fund or money with which to pay its obligations under this Award. You or any successor in interest shall be and remain a general creditor of the Company in the same manner as any other creditor having a general claim from matured and unpaid compensation.

(i) This Award shall not entitle the holder to any dividends, rights upon liquidation, voting rights or other rights of stockholders of the Company.

4.	Definitions and Rules of Construction .

(a)

Definitions . The following terms have the meanings set forth below:

“Annual Net Sales” for a period of four consecutive quarters means the sum of quarterly domestic (U.S.) net sales of homes (i.e., gross number of home sales contracts less cancellations, determined in number of units) during the four quarters of the Company’s fiscal year (provided

that for the fiscal year ending September 30, 2008, the three consecutive quarters ending September 30, 2008 shall be used).

“Annual Pre-Tax Income” for a period of four consecutive quarters means the sum of quarterly income (loss) before income taxes during the four quarters of the Company’s fiscal year (provided that for the fiscal year ending September 30, 2008, the three consecutive quarters ending September 30, 2008 shall be used).

“Annual Return on Investment” or “Annual ROI” for a period of four consecutive quarters means the Annual Pre-Tax Income for the four quarters of the Company’s fiscal year divided by the Annual Total Assets for the four quarters of the Company’s fiscal year (provided that for the fiscal year ending September 30, 2008, the three consecutive quarters ending September 30, 2008 shall be used).

“Annual Total Assets” for a period of four consecutive quarters of the Company’s fiscal year means the sum of the beginning balance of total inventories, excluding land inventory not owned, as of the end of the quarter immediately preceding the first quarter and as of the end of each of the four quarters of the Company’s fiscal year (provided that for the fiscal year ending September 30, 2008, the balance as of December 31, 2007 shall be summed with the balances as of the end of each of the three consecutive quarters ended September 30, 2008 shall be used).

“Baseline Net Sales” for a period of four consecutive quarters ending December 31, 2007 means the sum of quarterly domestic (U.S.) net sales of homes (i.e., gross number of home sales contracts less cancellations in units) during the four quarters.

“Code” means the Internal Revenue Code of 1986, as amended, and the rulings, regulations and other guidance thereunder.

“Peer Group” means, in addition to the Company, Beazer Homes USA, Centex Corporation, Hovnanian Enterprises, KB Home, Lennar Corporation, M.D.C. Holdings, Pulte Homes, Ryland Group, Standard Pacific and Toll Brothers.

“Performance Period” means the 2.75 year period (11 quarters) beginning January 1, 2008 and ending September 30, 2010. In comparing results of the Company with the performance of the other companies in the Peer Group, there shall be used the fiscal quarter that corresponds to the same fiscal quarter of the Company, or if there is not a comparable period, then the fiscal quarter ending most closely before a fiscal quarter of the Company and, in the case of fiscal year computations, there shall be used the four fiscal quarters ending at or most closely preceding the fiscal year of the Company; provided that the performance metrics will be compared to those of the Company’s Peer Group based on publicly available information of the Peer Group at September 30, 2008, 2009 and 2010, as applicable.

“Performance Period Return on Investment” or “Performance Period ROI” means the sum of (1) the Annual ROI for the three consecutive quarters ending September 30, 2008, (2) the Annual ROI for the four consecutive quarters ending September 30, 2009, and (3) the Annual ROI for the four consecutive quarters ending September 30, 2010.

“Performance Period Net Sales Percentage” or “Performance Period NS%” means the sum of the (1) the Annual Net Sales for the three consecutive quarters ending September 30, 2008, (2) the Annual Net Sales for the four consecutive quarters ending September 30, 2009, and (3) the Annual Net Sales for the four consecutive quarters ending September 30, 2010 divided by the Baseline Net Sales.

“Relative Net Sales Gains Percentage” or “Relative NSG%” means the Performance Period Net Sales Percentage of the Company, compared to the other members of the Peer Group, as determined in good faith by the Committee.

“Relative Return on Investment” or “Relative ROI” means the Performance Period ROI of the Company, compared to the other members of the Peer Group, as determined in good faith by the Committee.

“Retirement” has the meaning set forth in the Plan or in a manner consistent with the Company’s other incentive plans or such date as the Committee shall approve.

(b)

Rules of Construction . All references to Sections refer to sections in this Award. The titles to sections of this Award are for convenience of reference only and, in the case of conflict, the text of this Award, rather than the titles, shall control.

Exhibit 10.2

D.R. HORTON, INC.

NON-QUALIFIED STOCK OPTION AGREEMENT

(Employee - Term Vesting)

, 200X

WHEREAS, (hereinafter called the “Participant”) is a key employee of D.R. Horton, Inc., a Delaware corporation (hereinafter called the “Company”);

WHEREAS, the grant of Options to the Participant effective , 200X (the “Date of Grant”), and the execution of a Stock Option Agreement in the form hereof has been duly authorized by a resolution of the Committee duly adopted on , 200X, and incorporated herein by reference; and

WHEREAS, the option granted hereby is intended to be a non-qualified stock option and shall not be treated as an “incentive stock option” within the meaning of that term under Section 422 of the Code.

NOW, THEREFORE, effective as of the Date of Grant, the Company hereby grants to the Participant a non-qualified option pursuant to the Company’s 2006 Stock Incentive Plan (the “Plan”) to purchase shares of Common Stock at the price of Dollars ($ ) per share (the “Option Price”), and agrees to either cause certificates for any shares purchased hereunder to be delivered to the Participant or to register the Shares in book entry form (as determined by the Administrator) upon payment of the aggregate Option Price in full, all subject, however, to the terms and conditions hereinafter set forth. Capitalized terms used in this Agreement that are not otherwise defined in this Agreement are used as defined in the Plan.

1. (A) This option (until terminated as hereinafter provided) shall become exercisable as follows:


Time Period After Date of Grant				Number of Shares for Which Option is Exercisable

Except as otherwise provided in paragraph 3, this option shall be exercisable only if the Participant shall have been in the continuous employ of the Company or any Subsidiary from the date hereof until this option is exercised. For the purposes of this paragraph, leaves of absence approved by the Board for illness, disability, military or governmental service, or other cause, shall be considered as employment. To the extent exercisable, this option may be exercised in whole or in part from time to time.

(B) Notwithstanding the provisions of subparagraph (A) of this paragraph 1, this option shall be exercisable to the extent of 100% of the shares hereinabove specified upon

the occurrence of any Change in Control (as hereinafter defined) of the Company. For purposes of this Agreement, a “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-l (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-l 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.

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 subparagraph (B), 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.

(C) Notwithstanding the provisions of subparagraph (A) of this paragraph 1, this option shall be exercisable to the extent of 100% of the shares hereinabove specified at the time the Participant ceases to be an employee of the Company or any Subsidiary upon the occurrence of the events described in subparagraph (B) or (D) of paragraph 3.

2. The Option Price shall be payable (a) in cash or by check acceptable to the Company, (b) by transfer to the Company of Shares of previously owned Common Stock, (c) through an irrevocable commitment by a broker to pay over such amount from a sale of some or all of the Shares issuable under the Option, (d) by withholding of Shares otherwise deliverable upon exercise and only issuing the net number of Shares remaining after paying the Option Price, or (e) by any combination of the foregoing, as permitted by the Administrator. For purposes of (b) and (d) above, the Shares shall be valued at their then fair market value, as determined by the Administrator.

3. This option shall terminate on the earliest of the following dates:

(A) Three months after (i) delivery to the Participant by the Company or a Subsidiary of notice of termination of the Participant’s employment with the Company or a Subsidiary, other than for any matter that constitutes a violation of the standard of employee

conduct set forth in the Company’s Employee Manual or any other employee code of conduct as in effect on the date of such termination, or (ii) delivery to the Company by the Participant of notice of the voluntary termination by the Participant of the Participant’s employment with the Company or a Subsidiary;

(B) One year after the Participant ceases to be an employee of the Company or a Subsidiary by reason of retirement under a retirement plan of the Company or a Subsidiary, which retirement is at or after normal retirement age provided for in such retirement plan;

(C) Immediately upon the delivery to the Participant by the Company or a Subsidiary of notice of termination of the Participant’s employment with the Company or a Subsidiary for any matter that constitutes a violation of the standard of employee conduct set forth in the Company’s Employee Manual or any other Employee code of conduct as in effect on the date of such termination;

(D) Two years after the death or permanent disability of the Participant if the Participant dies or becomes permanently disabled while an employee of the Company or a Subsidiary; and

(E) Ten years from the date on which this option was granted.

Nothing contained in this option shall limit whatever right the Company or a Subsidiary might otherwise have to terminate the employment of the Participant. Except as otherwise provided in subparagraph (C) of paragraph 1, after the termination of the Participant’s employment this option shall be exercisable for the same number of shares for which it was exercisable prior to such termination. In the event that the Participant’s employment terminates on the same date that a Change in Control of the Company occurs, the Change in Control will be deemed to have occurred prior to the termination of the Participant’s employment.

4. This option is not transferable or exercisable except as provided in Paragraph 14 of the Plan.

5. If the Company shall be required to withhold any federal, state, local or foreign tax in connection with the exercise of this option, it shall be a condition to such exercise that the Participant payor make provision satisfactory to the Company for payment of all such taxes. To the extent approved by the Administrator, the Participant may satisfy his tax withholding obligations through any of the methods permitted for paying the Option Price, as set forth in Section 2 above.

6. Upon each exercise of this option, the Company as promptly as practicable shall either mail or deliver to the Participant a stock certificate or certificates representing the shares then purchased or shall register the Shares in book entry form (as determined by the Administrator), and shall pay all stamp taxes payable in connection therewith. The issuance of such shares and delivery or book entry registration of the certificate or certificates therefor shall, however, be subject to any delay necessary to complete (a) the listing of such shares on any stock exchange upon which shares of the same class are then listed, (b) such registration or qualification of such shares under any state or federal law, rule or regulation as the Company may determine to be necessary or advisable, and (c) the making of provision for the payment or withholding of any taxes required to be withheld pursuant to any applicable law, in respect of the exercise of this option or the receipt of such shares.

7. By entering into this Agreement, the Participant agrees and acknowledges that the Participant has received a copy of the Plan. This option is subject to the Plan. The terms and provisions of the Plan, as it may be amended from time to time in accordance with its respective terms, are hereby incorporated herein by reference. In the event of a conflict between any term

or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.

8. Any question concerning the interpretation of this option or the Plan, any adjustments required to be made under the Plan, and any controversy that may arise under the Plan or this option shall be determined by the Administrator (including any person(s) to whom the Administrator has delegated its authority) in its sole and absolute discretion. Such decision by the Administrator shall be final and binding.

9. Neither the Plan nor the award of this option shall be construed as giving the Participant the right to be retained in the employ of, or in any consulting relationship to, the Company. Further, the Company may at any time dismiss the Participant or discontinue any consulting relationship, free from any liability or any claim under the Plan or this option, except as otherwise expressly provided herein.

EXECUTED at Fort Worth, Texas as of the date first above written.


D.R. HORTON, INC.

By:
		Donald R. Horton, Chairman of the Board

The undersigned Participant hereby acknowledges receipt of an executed original of this Non-Qualified Stock Option Agreement and accepts the stock option granted thereunder.



Participant

Printed Name:

Exhibit 10.3

D.R. HORTON, INC.

NON-QUALIFIED STOCK OPTION AGREEMENT

(Outside Director – Term Vesting)

, 200X

WHEREAS, (hereinafter called the “Participant”) is a director of D.R. Horton, Inc., a Delaware corporation (hereinafter called the “Company”);

WHEREAS, the grant of Option Rights to the Participant effective , 200X (the “Date of Grant”), and the execution of a Stock Option Agreement in the form hereof, has been duly authorized by a resolution of the Committee duly adopted on , 200X incorporated herein by reference; and

NOW, THEREFORE, effective as of the Date of Grant the Company hereby grants to the Participant a non-qualified option pursuant to the Company’s 2006 Stock Incentive Plan (the “Plan”) to purchase shares of Common Stock at the price of and /100 Dollars ($ ) per share, and agrees to either cause certificates for any shares purchased hereunder to be delivered to the Participant or to register the Shares in book entry form (as determined by the Administrator) upon payment of the aggregate Option Price in full, all subject, however, to the terms and conditions hereinafter set forth. Capitalized terms used in this Agreement that are not otherwise defined in this Agreement are used as defined in the Plan.

1. (A) This option (until terminated as hereinafter provided) shall become exercisable as follows:

Time Period After

Date of Grant

Number of Shares for

Which Option is Exercisable

Except as otherwise provided in paragraph 3, this option shall be exercisable only if the Participant shall continuously remain a director of the Company from the date hereof until this option is exercised. For the purposes of this paragraph, leaves of absence approved by the Board for illness, disability, military or governmental service, or other cause, shall be considered as continuing to serve as a director of the Company. To the extent exercisable, this option may be exercised in whole or in part from time to time.

(B) Notwithstanding the provisions of subparagraph (A) of this paragraph 1, this option shall be exercisable to the extent of 100% of the shares hereinabove specified upon the occurrence of any Change in Control (as hereinafter defined) of the Company. For purposes of this Agreement, a “Change in Control” means the occurrence of any of the following events:

(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

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 Agreement solely because (i) the Company, (ii) any Subsidiary, or (iii) any employee stock ownership plan or any other employee benefit plan of the Company or any Subsidiary 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 subparagraph (B), 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.

(C) Notwithstanding the provisions of subparagraph (A) of this paragraph 1, this option shall be exercisable to the extent of 100% of the shares hereinabove specified at the time the Participant ceases to be a director of the Company upon the occurrence of the events described in subparagraph (C) of paragraph 3.

3. This option shall terminate on the earliest of the following dates:

(A) Three months after Participant is no longer a director of the Company for any reason except as provided in Subparagraph (B) or (C) below;

(B) Immediately upon the delivery to the Participant of notice of removal of the Participant as a director of the Company;

(C) Two years after the death or permanent disability of the Participant if the Participant dies or becomes permanently disabled while a director of the Company; and

(D) Ten years from the date on which this option was granted.

Except as otherwise provided in subparagraph (C) of paragraph 1, after the termination of the Participant’s directorship this option shall be exercisable for the same number of shares for which it was exercisable prior to such termination. In the event that the Participant’s directorship

terminates on the same date that a Change in Control of the Company occurs, the Change in Control will be deemed to have occurred prior to the termination of the Participant’s directorship.

4. This option is not transferable or exercisable except as provided in Paragraph 14 of the Plan.

5. If the Company shall be required to withhold any federal, state, local or foreign tax in connection with the exercise of this option, it shall be a condition to such exercise that the Participant pay or make provision satisfactory to the Company for payment of all such taxes. To the extent approved by the Administrator, the Participant may satisfy his tax withholding obligations through any of the methods permitted for paying the Option Price, as set forth in Section 2 above

8. Any questions concerning the interpretation of this option or the Plan, any adjustments required to be made under the Plan, and any controversy that may arise under the Plan or this option shall be determined by the Administrator (including any person(s) to whom the Administrator has delegated its authority) in its sole and absolute discretion. Such decision by the Administrator shall be final and binding.

EXECUTED at Fort Worth, Texas this day of , 200X.


D.R. HORTON, INC.

By:
		Donald R. Horton, Chairman of the Board

The undersigned Participant hereby acknowledges receipt of an executed original of this Non-Qualified Stock Option Agreement and accepts the stock option granted thereunder.


Participant

Printed Name: