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): November 5, 2014
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 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
| (e) | Compensatory Arrangements of Certain Officers |
2014 Fiscal Year Compensation of Chairman, Former Chief Executive Officer and Current Chief Executive Officer.
On November 5, 2014, the Compensation Committee of the Board of Directors determined and approved the performance compensation to be paid to Donald R. Horton, Chairman, Donald J. Tomnitz, Former President and Chief Executive Officer, and David V. Auld, President and Chief Executive Officer, for the fiscal year ended September 30, 2014 (“2014 fiscal year”). Under the 2014 fiscal year cash performance bonus program, Mr. Horton and Mr. Tomnitz each had the opportunity to earn a cash performance bonus up to a maximum of 0.6% of the consolidated pre-tax income of the Company for each semi-annual period in the 2014 fiscal year. Mr. Auld had the opportunity to earn a cash performance bonus up to a maximum of 0.25% of the consolidated pre-tax income of the Company for each semi-annual period in the 2014 fiscal year. Under this program, Mr. Horton and Mr. Tomnitz each received $2,349,338 for the semi-annual period ended March 31, 2014 and $2,535,772 for the semi-annual period ended September 30, 2014 resulting in Mr. Horton and Mr. Tomnitz each receiving a total cash bonus in the amount of $4,885,110 or 0.6% of consolidated pre-tax income for the 2014 fiscal year. Under this program, Mr. Auld received $978,891 for the semi-annual period ended March 31, 2014 and received $1,056,572 for the semi-annual period ended September 30, 2014 resulting in Mr. Auld receiving a total cash bonus in the amount of $2,035,463 or 0.25% of consolidated pre-tax income for the 2014 fiscal year.
Performance Determination of Grant of Performance Restricted Stock Units.
On November 9, 2011, the Compensation Committee made an award of long-term performance restricted stock units (“Performance RSUs”) under the 2006 Stock Incentive Plan (“2006 Plan”) to Mr. Horton and Mr. Tomnitz. The three-year performance period for the Performance RSUs was October 1, 2011 to September 30, 2014 (the “Performance Period”).
Vesting of the Performance RSUs was based on four performance goals. The four performance goals were (i) relative total shareholder return (“TSR”), (ii) relative return on investment (“ROI”), (iii) relative selling, general and administrative expense containment (“SG&A”) and (iv) relative gross profit (“GP”) (collectively, the “Performance Goals”) . Each Performance Goal was weighted twenty-five percent (25%) of the target number of Performance RSUs. The Performance RSUs had a target number of 200,000 for Mr. Horton and 150,000 for Mr. Tomnitz which could be increased or decreased based on performance rankings at the end of the Performance Period.
After completion of the Performance Period, the Compensation Committee evaluated the performance achieved relative to peer group rankings for the four performance goals and the terms of the Performance RSUs and determined that Mr. Horton and Mr. Tomnitz earned
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325,000 and 243,750 Performance RSUs, respectively. The Compensation Committee approved payout of the Performance RSUs to Mr. Horton in the form of 325,000 shares of common stock valued at $6,669,000 and to Mr. Tomnitz in the form of 243,750 shares of common stock valued at $5,001,750. The value was determined based on the Company’s stock at September 30, 2014, the last day of the Performance Period.
2015 Fiscal Year Compensation Program of Chairman of the Board, Chief Executive Officer and Chief Operating Officer.
Base Salaries. The base salaries, annual performance-based bonus plans, and other benefits for Mr. Horton, Mr. Auld and Michael J. Murray, Executive Vice President and Chief Operating Officer, for the fiscal year ending September 30, 2015 (“2015 fiscal year”) were also approved. Mr. Horton’s annual base salary remains unchanged at $1,000,000. Mr. Auld’s annual base salary increased to $700,000. Mr. Murray’s annual base salary shall be $500,000.
Annual Performance Bonus. Mr. Horton, Mr. Auld and Mr. Murray also have the opportunity to earn cash bonuses of up to 0.6%, 0.35% and 0.1%, respectively, of consolidated pre-tax income determined in accordance with generally accepted accounting principles and based on the two semi-annual performance periods ending March 31 st and September 30 th during the 2015 fiscal year.
The primary components of the 2015 fiscal year compensation program for Mr. Horton, Mr. Auld and Mr. Murray are set forth in Exhibit 10.1 to this Form 8-K and Exhibit 10.1 is hereby incorporated by reference into this Item 5.02.
Three-Year Performance Restricted Stock Unit Award - Vesting September 30, 2017.
On November 5, 2014, the Compensation Committee approved an award of performance restricted stock units (“Performance RSUs”) pursuant to the Company’s 2006 Stock Incentive Plan, as amended and restated (“2006 Plan”) to the following executive officers and in the following amounts:
|
Name |
Office |
Target # of Performance
Restricted Stock Units |
||
|
Donald R. Horton |
Chairman of the Board | 200,000 | ||
|
David V. Auld |
President and CEO | 60,000 | ||
|
Michael J. Murray |
Executive Vice President and COO | 30,000 | ||
The Performance RSUs relate to a three-year performance period beginning on October 1, 2014 and ending on September 30, 2017 (the “2017 Performance Period”). The Performance RSUs will vest if four performance goals are satisfied. The four performance goals are relative total shareholder return (“TSR”), relative return on investment (“ROI”), relative selling, general and administrative expense containment (“SG&A”) and relative gross profit (“GP”)
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(collectively, the “Performance Goals”) . Each Performance Goal is weighted twenty-five percent (25%) of the target number of Performance RSUs. The target number of Performance RSUs may be increased to a maximum number of 400,000 for Mr. Horton, 120,000 for Mr. Auld and 60,000 for Mr. Murray upon maximum achievement of each of the four Performance Goals and decreased to a minimum number of zero upon minimum achievement of each of the four Performance Goals. Performance and percentages that fall between the maximum RSUs, the Target RSUs and the minimum (zero) RSUs shall be ranked using linear interpolation. The Company’s peer group includes ten publicly traded homebuilding companies, and with the Company included, includes eleven homebuilding companies in the final rankings.
Each Performance RSU represents the contingent right to receive one share of the Company’s common stock if vesting is satisfied. The Performance RSUs have no rights to dividends or voting.
Vesting of the TSR Performance Goal component will be determined after the 2017 Performance Period based on a comparison of the Company’s TSR to the S&P 500 Index’s TSR as computed by Standard and Poor’s using their TSR methodology. Vesting of the ROI, SG&A and GP Performance Goal components will be determined after the 2017 Performance Period based on the relative ranking of the Company’s performance on each Performance Goal to each peer group company’s performance on each Performance Goal. Any portion of the Performance RSUs that do not vest due to inadequate relative performance will be forfeited.
2014 Fiscal Year Compensation of Other Named Executive Officer – Chief Financial Officer.
The Board of Directors on recommendation of the Compensation Committee approved a discretionary bonus to the executive officer listed below consistent with past practices. The executive officer set forth below was a “named executive officer” (as defined in Item 402(a)(3) of Regulation S-K) of the Company as of the end of the Company’s 2014 fiscal year. There have been no changes to the discretionary bonus plan of the below listed named executive officer as previously approved by the Board of Directors. A summary of the bonus is as follows:
|
Name |
Office |
Annual
Discretionary Bonus for the Year Ended September 30, 2014 |
||||
|
Bill W. Wheat |
Executive Vice President and Chief Financial Officer | $ | 600,000 | |||
$175,000 of the annual bonus related to the semi-annual period ended March 31, 2014 and $425,000 related to the semi-annual period ended September 30, 2014, of which $100,000 was paid in the form of shares of common stock of the Company.
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Three-Year Time Vesting Restricted Stock Unit Award.
On November 5, 2014, the Compensation Committee approved an award of restricted stock units (“Time Vesting RSUs”) pursuant to 2006 Plan to the following executive officer and in the following amount:
|
Name |
Office |
Target # of Time Vesting
Restricted Stock Units |
||
|
Bill W. Wheat |
Executive Vice President and Chief Financial Officer | 30,000 |
The Time Vesting RSUs vest over a three-year period ending November 5, 2017. Ten thousand of the Time Vesting RSUs will vest at November 5, 2015, November 5, 2016 and November 5, 2017.
A form of the Restricted Stock Unit Agreement for Employees is set forth in Exhibit 10.4 to this Form 8-K and Exhibit 10.4 is hereby incorporated by reference into this Item 5.02.
2015 Fiscal Year Compensation of Other Named Executive Officer – Chief Financial Officer.
The Board of Directors established and approved the 2015 fiscal year annual base salary and 2015 fiscal year compensation program for Bill W. Wheat. Mr. Wheat’s annual base salary remains unchanged at $500,000.
A summary of the 2015 compensation program for Mr. Wheat is set forth in Exhibit 10.2 to this Form 8-K and Exhibit 10.2 is hereby incorporated by reference into this Item 5.02.
Board and Committee Compensation.
On November 6, 2014, the Board of Directors of the Company approved director fees, committee member fees and committee chairperson fees to be paid to non-management directors of the Company in the 2015 fiscal year. All director fees remained at the same level as the prior 2014 fiscal year. Board of Directors fees are $15,000 per meeting, not to exceed $60,000 per year.
A summary of the non-management director, committee and chairperson fees is set forth in Exhibit 10.3 to this Form 8-K and Exhibit 10.3 is hereby incorporated by reference into this Item 5.02.
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| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| 10.1 | Summary of Executive Compensation Notification – Chairman, Chief Executive Officer and Chief Operating Officer | |
| 10.2 | Summary of Executive Compensation Notification – Other Executive Officer – Chief Financial Officer | |
| 10.3 | Summary of Director, Committee and Chairperson Compensation | |
| 10.4 | Form of Restricted Stock Unit Agreement (Employees) pursuant to the Company’s 2006 Stock Incentive Plan, as amended and restated | |
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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.
| D. R. Horton, Inc. | ||||
| Date: November 12, 2014 | By: |
/s/ T HOMAS B. M ONTANO |
||
| Thomas B. Montano | ||||
|
Vice President and Corporate and
Securities Counsel |
||||
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EXHIBIT INDEX
|
Exhibit
|
Description |
|
| 10.1 | Summary of Executive Compensation Notification – Chairman, Chief Executive Officer and Chief Operating Officer | |
| 10.2 | Summary of Executive Compensation Notification – Other Executive Officer – Chief Financial Officer | |
| 10.3 | Summary of Director, Committee and Chairperson Compensation | |
| 10.4 | Form of Restricted Stock Unit Agreement (Employees) pursuant to the Company’s 2006 Stock Incentive Plan, as amended and restated | |
Exhibit 10.1
Executive Compensation Notification
Chairman, Chief Executive Officer and Chief Operating Officer
2015 Fiscal Year Compensation Program of Chairman, Chief Executive Officer and Chief Operating Officer .
2015 Fiscal Year Base Salaries: Table I below sets forth the 2015 fiscal year base salaries for Mr. Horton, Mr. Auld and Mr. Murray.
Table I
|
Name |
Office |
Annual Base Salary
(2015 Fiscal Year) |
Performance Bonus
(2015 Fiscal Year) |
|||||
|
Donald R. Horton |
Chairman of the Board | $ | 1,000,000 | See Below | ||||
|
David V. Auld |
President and CEO | $ | 700,000 | See Below | ||||
|
Michael J. Murray |
Executive Vice President and COO | $ | 500,000 | See Below | ||||
2015 Fiscal Year Annual Performance Bonus: The Compensation Committee approved performance-based goals for measuring short-term performance bonuses that may be earned by Mr. Horton, Mr. Auld and Mr. Murray during the 2015 fiscal year. The 2015 performance goals were established under the Company’s 2000 Amended and Restated Incentive Bonus Plan. The 2015 fiscal year performance goal for Mr. Horton, Mr. Auld and Mr. Murray relates to achieving positive consolidated pre-tax income as set forth below.
Annual Performance Bonus – Performance Related to Pre-Tax Income:
Mr. Horton . Under the 2015 fiscal year performance bonus program, Mr. Horton has the opportunity to earn the following performance-based bonus:
| (1) | Up to 0.6% of Pre-Tax Income of the Company for the six-month period ending March 31, 2015 (but not below $0), and |
| (2) | Up to 0.6% of Pre-Tax Income of the Company for the six-month period ending September 30, 2015 (but not below $0). |
Mr. Auld . Under the 2015 fiscal year performance bonus program, Mr. Auld has the opportunity to earn the following performance-based bonus:
| (1) | Up to 0.35% of Pre-Tax Income of the Company for the six-month period ending March 31, 2015 (but not below $0), and |
| (2) | Up to 0.35% of Pre-Tax Income of the Company for the six-month period ending September 30, 2015 (but not below $0). |
Mr. Murray. Under the 2015 fiscal year performance bonus program, Mr. Murray has the opportunity to earn the following performance-based bonus:
| (1) | Up to 0.1% of Pre-Tax Income of the Company for the six-month period ending March 31, 2015 (but not below $0), and |
| (2) | Up to 0.1% of Pre-Tax Income of the Company for the six-month period ending September 30, 2015 (but not below $0). |
“Pre-Tax Income” shall mean income before income taxes, as publicly reported by the Company in its quarterly or annual financial statements, as applicable, prepared in accordance with generally accepted accounting principles. The financial statements shall mean the consolidated financial statements of the Company.
At the end of the 2015 fiscal year, the Committee may use its sole discretion to adjust downward, in part or in whole, the Annual Performance Bonus based on performance of the Company, including the annual amount of Pre-Tax Income earned and performance of the participant. Provided that for the fiscal year ending September 30, 2015 no more than 0.6% of Pre-Tax Income for the year shall be paid to Mr. Horton, no more than 0.35% of Pre-Tax Income for the year shall be paid to Mr. Auld and no more than 0.1% of Pre-Tax Income for the year shall be paid to Mr. Murray.
Other Long-Term Benefits.
Mr. Horton, Mr. Auld and Mr. Murray may participate in two separate deferred compensation plans. The first plan allows the executive to make voluntary income deferrals. The second plan is a promise by the Company to pay benefits to the executive. If the executive is employed by the Company on the last day of the current fiscal year (for example September 30, 2015), then the Company will establish a liability to him equal to 10% of his annual base salary as of the first day of the current fiscal year (for example October 1, 2014). This liability will accrue earnings in future years at a rate established by the administrative committee.
Exhibit 10.2
Summary of Executive Compensation Notification
Other Executive Officer – Chief Financial Officer
2015 Fiscal Year Compensation of Other Named Executive Officer .
The Board of Directors also established and approved the 2015 fiscal year annual base salary of our other named executive officer. The salary and other compensation approved are as set forth below in Table II.
Table II
|
Name |
Office |
Annual Base Salary
(2015 Fiscal Year) |
Discretionary
Bonus Plan (2015 Fiscal Year) |
|||||
|
Bill W. Wheat |
Executive Vice President and CFO | $ | 500,000 | See Note II | ||||
Note II :
The Board of Directors may award discretionary bonuses to Mr. Wheat based on his performance in fiscal 2015. In addition, Mr. Wheat may participate in two separate deferred compensation plans. The first plan allows the executive to make voluntary income deferrals. The second plan is a promise by the Company to pay benefits to the executive. If the executive is employed by the Company on the last day of the current fiscal year (for example September 30, 2015), then the Company will establish a liability to him equal to 10% of his annual base salary as of first day of the current fiscal year (for example October 1, 2014). This liability will accrue earnings in future years at a rate established by the administrative committee.
Exhibit 10.3
Summary of Director, Committee and Chairperson Compensation
The Board of Directors of the Company approved cash director fees, committee member fees and chairperson fees to be paid to non-management directors of the Company in the 2015 fiscal year. Director fees, committee fees and chairperson fees are only paid to non-management directors as summarized below:
Each non-management director will receive a director fee of $15,000 per Board meeting attended in person or by tele-conference, paid quarterly and not to exceed $60,000 per year.
Each non-management director who serves on a committee of the Board of Directors will receive a fee of $1,250 per committee meeting attended in person or by tele-conference, paid quarterly and not to exceed $5,000 per year.
Each non-management director who serves as the chairperson of a committee of the Board of Directors shall receive a fee of $625 per committee meeting attended in person or by tele-conference, paid quarterly and not to exceed $2,500 per year.
Exhibit 10.4
D.R. HORTON, INC.
RESTRICTED STOCK UNIT AGREEMENT
[EMPLOYEE]
, 20
D.R. Horton, Inc. (the “ Company ”) , a Delaware corporation, pursuant to the Amended and Restated 2006 Stock Incentive 2006 SIP (the “ 2006 SIP ”) , hereby grants (the “ Participant ”) a Restricted Stock Unit Award (“ Award ”) as set forth below. This Award is subject to the terms and conditions set forth in this Restricted Stock Unit Award Agreement (the “ Agreement ”) and in the 2006 SIP (a copy of which is attached to this Agreement). The Administrator of this Award under the 2006 SIP is the Board of Directors (the “ Board ”) of the Company and it shall determine or resolve any conflicts in this Agreement, the 2006 SIP, and any Tax Deferral Notice (defined below) under Section 2. Capitalized terms not defined herein are defined in the 2006 SIP.
1. Terms . Each Restricted Stock Unit represents the right to receive one Share (as adjusted from time to time pursuant to the 2006 SIP) subject to fulfillment of the vesting, settlement and other conditions set forth in this Agreement.
| Participant: | ||
|
Number of Non-Statutory
|
||
| Date of Award: | ||
| Vesting Dates: | ||
| Settlement Dates: | ||
2. Settlement and Tax Deferral Election . Each vested RSU will be settled by the delivery of one Share (subject to adjustment under the 2006 SIP) to the Participant or, in the event of the Participant’s death, to the Participant’s estate or heirs, on the applicable Settlement Date; provided that the Participant has satisfied all obligations with regard to the Tax-Related Items (as defined below) in connection with the Award, and that the Participant has completed, signed and returned any documents and taken any additional action that the Company deems appropriate to enable it to accomplish the delivery of the Shares. No fractional shares will be issued under this Agreement.
Within thirty (30) days of the Date of Award, the Participant may elect to defer settlement of part of or all of the RSUs. The Participant shall provide a written notice (the “ Tax Deferral Notice ”) to the Company setting forth the Participant’s tax deferral election. If the Participant elects to defer settlement pursuant to this Section 2, the vested Shares will be settled on the Settlement Date(s) set forth in the attached Tax Deferral Notice.
3. Status of Award . Until the RSUs vest and are converted into Shares and such Shares are settled to the Participant pursuant to the terms of this Agreement, the Participant will have no rights as a stockholder of the Company with respect to the Shares subject to the Award (including, without limitation, no voting or dividend rights with respect to such Shares). Following the conversion of the RSUs to Shares and the settlement of such Shares to the Participant hereunder, the Participant will be recorded as a stockholder of the Company with respect to such Shares and shall have all voting rights and rights to dividends and other distributions with respect to such Shares.
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4. Cease to Serve as Executive Officer . If the Participant’s status as an executive officer of the Company ceases, terminates or concludes for any reason, other than a termination related to Participant’s retirement, disability, death, or Change in Control, the Participant’s RSUs shall immediately cease to vest and any rights to the underlying Shares shall be forfeited on the effective date of such termination. The Board shall have the exclusive discretion to determine when the Participant’s continuous status as an executive officer has terminated for purposes of this Award. Upon such a termination, all unvested RSUs subject to this Award shall be forfeited by the Participant and cancelled and surrendered to the Company without payment of any consideration. If 12 months has passed since September 30, 20 , the Grantee’s separation from service is due to voluntary (without cause) or involuntary (without cause) termination or resignation before September 30, 20 , then the Grantee will be paid a number of RSUs determined on a pro-rata basis based on the number of full months completed from October 1, 20 to the date of separation of service. For purposes of this Section 4, “pro-rata portion” means a percentage, where the numerator is the number of full months completed between October 1, 20 and the date of the Grantee’s separation of service, and the denominator is 36 months.
5. Retirement, Disability, Death or Change in Control . In the event of any of (i) Participant’s retirement (at normal retirement age of 65 years old) from the Company, (ii) Participant’s disability, (iii) Participant’s death, or (iv) a Change in Control of the Company, then in each case, all the RSUs subject to this Award, if the Participant shall have been in continuous status as an executive officer since the Date of Award, shall vest in full. A “Change in Control” shall mean a Change in Control as defined in the Participant’s Stock Option Agreement, dated September 2, 2011, which was approved by the Board under the 2006 SIP.
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6. Board Authority . Any question concerning the interpretation of this Agreement, the 2006 SIP, the Tax Deferral Notice, any adjustments required to be made under the 2006 SIP, any controversy that may arise under the 2006 SIP or this Agreement shall be determined by the Company’s Board of Directors in its sole and absolute discretion. Such decision shall be final and binding.
7. Transfer Restrictions . Any sale, transfer, assignment, encumbrance, pledge, hypothecation, conveyance in trust, gift, transfer by bequest, devise or descent, or other transfer or disposition of any kind, whether voluntary or by operation of law, directly or indirectly, of RSUs or Shares subject thereto prior to the date such Shares are issued to the Participant pursuant to this Agreement shall be strictly prohibited and void. Any Shares held by the Participant shall not be pledged or otherwise encumbered as long as the Participant is an executive officer.
8. Securities Law Compliance . The Company may impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales or other subsequent transfers of any Shares issued as a result of or under this Award, including without limitation (i) restrictions under an insider trading policy, (ii) restrictions that may be necessary in the absence of an effective registration statement under the Securities Act of 1933, as amended, or any other similar applicable law covering the Award and/or the Shares underlying the Award, and (iii) restrictions as to the use of a specified brokerage firm or other agent for such resales or other transfers. Any sale of the Shares must also comply with other applicable laws and regulations governing the sale of such Shares.
9. Certain Conditions of the Award . The Participant agrees that he or she will not acquire Shares pursuant to the Award or transfer, assign, sell or otherwise deal with such Shares except in compliance with applicable law. Further, in accepting the Award, the Participant acknowledges that:
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| (a) | The 2006 SIP is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time; |
| (b) | The grant of the Award is voluntary and occasional and does not create any contractual or other right to receive future grants of awards, or benefits in lieu of awards, even if awards have been granted repeatedly in the past. All decisions with respect to future award grants, if any, will be at the sole discretion of the Company; |
| (c) | The Award and the Participant’s participation in the 2006 SIP will not be interpreted to form an employment contract or service contract or relationship with the Company or any Affiliate; |
| (d) | The Participant is voluntarily participating in the 2006 SIP; and |
| (e) | The future value of the underlying Shares is unknown and cannot be predicted with certainty. |
10. Tax Withholding .
| (a) |
Responsibility for Taxes . Regardless of any action taken by the Company with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related items related to the Participant’s participation in the 2006 SIP and legally applicable to the Participant (the “ Tax-Related Items ”) , the Participant acknowledges that the ultimate liability for all Tax-Related Items is and remains the Participant’s responsibility and may exceed the amount actually withheld by the Company. The Participant further acknowledges that the Company (a) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any |
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| aspect of the Award, including but not limited to, the grant, vesting or settlement of the Award, the subsequent sale of Shares acquired pursuant to such settlement, or the receipt of any dividends, and (b) does not commit to and are under no obligation to structure the terms of the grant or any aspect of the Award to reduce or eliminate the Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if the Participant has become subject to tax in more than one jurisdiction between the Date of Award and the date of any relevant taxable or tax withholding event, as applicable, the Participant acknowledges that the Company may be required to withhold or account for Tax-Related Items in more than one jurisdiction. |
The Company may refuse to issue, deliver or settle the Shares or the proceeds of the sale of Shares if the Participant fails to comply with his or her obligations in connection with the Tax-Related Items.
| (b) | Withholding in Shares . Subject to applicable law, the Company may require the Participant to satisfy Tax-Related Items by deducting from the Shares otherwise deliverable to the Participant in settlement of the Award a number of whole Shares having a fair market value, as defined in the 2006 SIP, as of the date on which the Tax-Related Items arise, not in excess of the amount of such Tax-Related Items. |
To avoid negative accounting treatment, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates. For tax purposes, the Participant is deemed to have been issued the full number of Shares subject to the vested Award, notwithstanding that a number of the Shares are held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of the Participant’s participation in the 2006 SIP.
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| (c) | Alternative Withholding Methods . The Company may satisfy its obligations for Tax-Related Items by: |
| (i) | withholding from the Participant’s cash compensation or fees paid to the Participant by the Company; or |
| (ii) | withholding from proceeds of the sale of Shares acquired upon vesting or settlement of the Award either through a voluntary sale or through a mandatory sale arranged by the Company (on the Participant’s behalf pursuant to this authorization). |
11. Delivery of Documents and Notices . Any document relating to participation in the 2006 SIP or any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given (except to the extent that this Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery, electronic delivery at the e-mail address, if any, provided for the Participant by the Company or an Affiliate, or upon deposit in the U.S. Post Office, by registered or certified mail, or with a nationally recognized overnight courier service, with postage and fees prepaid, addressed to the other party at the address shown below that party’s signature to this Agreement or at such other address as such party may designate in writing from time to time to the other party.
| (a) | Description of Electronic Delivery. The 2006 SIP documents, which may include but do not necessarily include: the 2006 SIP, this Agreement, the 2006 SIP Prospectus, and any reports of the Company provided generally to the Company’s stockholders, may be delivered to the Participant electronically. Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the internet site of a third party involved in administering the 2006 SIP, the delivery of the document via e-mail or such other means of electronic delivery specified by the Company. |
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| (b) | Consent to Electronic Delivery. The Participant acknowledges that the Participant has read the “Delivery of Documents and Notices” section of this Agreement and consents to the electronic delivery of the 2006 SIP documents and Agreement, as described in this section. The Participant acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Participant by contacting the Company by telephone or in writing. The Participant further acknowledges that the Participant will be provided with a paper copy of any documents if the attempted electronic delivery of such documents fails. Similarly, the Participant understands that the Participant must provide the Company or any designated third party administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails. The Participant may revoke his or her consent to the electronic delivery of documents described in this section or may change the electronic mail address to which such documents are to be delivered (if Participant has provided an electronic mail address) at any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service or electronic mail. Finally, the Participant understands that he or she is not required to consent to electronic delivery of documents as described in this section. |
12. Severability . The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
13. Governing Law; Venue . This Agreement shall be construed, interpreted and enforced in accordance with the laws of the State of Delaware, without regard to its conflict of laws rules. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the
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parties evidenced by this Award or this Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of Texas and agree that such litigation shall be conducted only in the courts of Tarrant County, Texas, or the federal courts for the United States for the State of Texas, and no other courts, where this Award is made and/or to be performed.
14. Imposition of Other Requirements . The Company reserves the right to impose other requirements on the Participant’s participation in the 2006 SIP, on this Award and on any Shares acquired under the 2006 SIP and this Agreement, to the extent the Company determines it is necessary or advisable in order to comply with applicable law or facilitate the administration of the 2006 SIP, and to require the Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. Any conflicts in terms or provisions to the Participant’s individual Agreement as compared to this form of Agreement shall be interpreted in favor of the Participant.
[S ignature Page Follows]
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Acceptance . The Participant hereby acknowledges, agrees and accepts the RSUs pursuant to this Agreement.
| COMPANY: | ||||
| D.R. HORTON, INC., a Delaware corporation | ||||
| By: |
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| , Chairman of the Board | ||||
| Date: |
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| By: |
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| , Chairman of the | ||||
| Compensation Committee | ||||
| Date: |
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| PARTICIPANT: | ||||
| By: |
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| [Name and Title of Participant] | ||||
| Date: |
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[Signature Page to Restricted Stock Unit Agreement]
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