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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Meritage Homes Corp | NYSE:MTH | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-2.97 | -1.75% | 166.38 | 168.34 | 165.665 | 167.06 | 63,190 | 18:16:20 |
UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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SCHEDULE 14A
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Proxy Statement Pursuant to Section 14(a) of the
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Securities Exchange Act of 1934
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(Amendment No. )
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Filed by the Registrant
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Filed by a Party other than the Registrant
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¨
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Check the appropriate box:
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¨
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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¨
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Definitive Additional Materials
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¨
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Soliciting Material Pursuant to §240.14a-12
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Meritage Homes Corporation
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(Name of Registrant as Specified In Its Charter)
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N/A
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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ý
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No fee required.
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¨
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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¨
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Fee paid previously with preliminary materials:
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¨
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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1
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Election of five Class I Directors, each to hold office until our
2018
annual meeting,
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2
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Ratification of the selection of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the
2016
fiscal year,
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3
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Advisory vote to approve compensation of our Named Executive Officers,
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4
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Amendment to our 2006 Stock Incentive Plan to increase the number of shares available for issuance, and
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5
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The conduct of any other business that may properly come before the meeting or any adjournment or postponement thereof.
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By Order of the Board of Directors
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C. Timothy White, Secretary
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TABLE OF CONTENTS
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Amendment to our 2006 Stock Incentive Plan to increase the number of shares available for issuance (Proposal No. 4)
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10
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Security Ownership by Management and Principal Stockholders
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Compensation Discussion and Analysis
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2015 Environment
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Independent Compensation Consultant
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Equity-Based Awards
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Discussion of NEO Compensation
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2016 Developments
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Certain Relationships and Related Transactions
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PROXY SUMMARY
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General Information
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PROXY SUMMARY
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The Proposals
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Name
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Age
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Director Since
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Independent
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AC
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CC
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NGC
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LC
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Raymond Oppel
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59
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1997
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Yes
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û
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û
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û
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Steven J. Hilton
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54
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1997
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No
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Richard T. Burke Sr.
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72
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2004
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Yes
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û
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û
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û
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Dana C. Bradford
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51
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2009
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Yes
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û
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û
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û
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û
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Deb Henretta
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54
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2016
(1)
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Yes
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=
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Chair
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AC
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Audit Committee
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NGC
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Nominating/Governance Committee
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û
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=
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Member
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CC
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Executive Compensation Committee
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LC
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Land Committee
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PROXY SUMMARY
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Summary of Fees
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||||||
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2015
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2014
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Audit fees
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$
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1,140,700
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$
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1,109,100
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Audit-related fees
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—
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—
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Tax fees
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—
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—
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All other fees
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—
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—
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Total fees
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$
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1,140,700
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$
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1,109,100
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Type
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Form
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Terms
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Cash
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Base Salary
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Competitively market-based
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Cash
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Annual Incentive Compensation
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Based on performance measurements
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Cash
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Discretionary Bonuses
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Based on specific individual achievements beyond those of the performance measurements included in the annual incentive compensation calculations, subject to approval by Executive Compensation Committee
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Equity
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Long-term Incentive Awards
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Equity awards typically have a three-year service period or performance periods that span over three years. For our CEO and certain other NEOs, 50% of the total awards are contingent upon the achievement of specified performance criteria
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Other
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Limited Perquisites
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Primarily auto allowance and the reimbursement of certain life and disability (or equivalent) policies for the benefit of NEOs and their families
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PROPOSAL 4
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Amendment to our 2006 Stock Incentive Plan to increase the number of shares available for issuance
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page 10
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Shares currently available under the plan
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414,913
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Proposed increase
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1,200,000
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Total shares available, including 2016 proposed increase
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1,614,913
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PROXY SUMMARY
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Other Matters
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Corporate Governance
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—
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Audit Committee
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—
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Executive Compensation Committee
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—
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Nominating/Governance Committee
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—
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Land Committee
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PROPOSAL 1: ELECTION OF DIRECTORS
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PROPOSAL 2: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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PROPOSAL 3: ADVISORY VOTE TO APPROVE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
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Background on Proposal
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•
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Generated year-over-year increases in many of our key operating metrics (dollars in thousands):
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2015
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2014
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% Increase
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Home Closing Units
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6,522
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5,862
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11.3%
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Home Closing Revenue
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$
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2,531,556
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$
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2,142,391
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18.2%
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Home Order Units
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7,100
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5,944
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19.4%
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Home Order Value
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$
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2,822,785
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$
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2,238,117
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26.1%
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Backlog Units
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2,692
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2,114
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27.3%
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Backlog Value
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$
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1,137,681
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$
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846,452
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34.4%
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Pre-Tax Income
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$
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189,464
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$
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208,417
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(9.1)%
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Diluted Earnings per Share
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$
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3.09
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$
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3.46
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(10.7)%
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•
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Market Expansion—
In 2015, we reported our first full year of results in the Atlanta, Georgia and Greenville, South Carolina markets as a result of our 2014 acquisition of the homebuilding assets and operations of BK Residential Construction, LLC ("Legendary Communities").
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•
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Capital Transactions—
In the second quarter of 2015 we completed an offering of $200.0 million aggregate principal amount of Senior Notes due 2025. In addition, we increased the capacity of our unsecured revolving credit facility to $500 million during 2015 to provide additional liquidity, and extended the maturity date to 2019.
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PROPOSAL 3: ADVISORY VOTE TO APPROVE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
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•
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Majority of compensation is incentive based and is "at-risk", as discussed beginning on page 32.
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•
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Incentive compensation is balanced between cash and equity awards, as discussed beginning on page 32.
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•
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The employment agreements for our CEO and certain of our NEOs include a provision for the clawback (or offset) of incentive bonuses to the extent any financial results are misstated as the result of the NEO’s willful misconduct or gross negligence.
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•
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NEOs must comply with security ownership requirements, as discussed on page 33.
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•
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Perquisites are limited to auto allowances and reimbursement of certain life and disability or long-term care insurance premiums, and limited other benefits as discussed on page 33.
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Effects of Advisory Vote
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PROPOSAL 4: AMENDMENT TO 2006 STOCK INCENTIVE PLAN
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Administration
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Eligibility
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Type of Awards
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PROPOSAL 4: AMENDMENT TO 2006 STOCK INCENTIVE PLAN
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Treatment of Awards Upon Termination of Employment and Change of Control
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PROPOSAL 4: AMENDMENT TO 2006 STOCK INCENTIVE PLAN
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Amendment to or Termination of The Plan
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•
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increase the maximum number of shares of common stock for which Awards may be granted under the Plan;
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•
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permit the Compensation Committee to grant options with an exercise price that is below the fair market value of a share of common stock on the date of grant;
|
•
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permit the Compensation Committee to extend the exercise period for an option beyond 10 years from the date of grant;
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•
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permit the Compensation Committee to reprice previously-granted options; or
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•
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require stockholder approval under any laws, regulation or stock exchange rule.
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Duration of The Plan
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Material U.S. Federal Tax Consequences
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PROPOSAL 4: AMENDMENT TO 2006 STOCK INCENTIVE PLAN
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PROPOSAL 4: AMENDMENT TO 2006 STOCK INCENTIVE PLAN
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Plan Benefits
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Individual or Group Name
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Number of Shares Subject
to Options and Non-
Vested Shares Granted
(1)
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Weighted Average
Exercise Price per
Share
(2
)
|
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Executive Officers
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Steven J. Hilton
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49,678
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Larry W. Seay
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22,354
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C. Timothy White
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21,112
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Phillippe Lord
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14,392
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Javier Feliciano
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10,000
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Steven M. Davis
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24,838
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Executive Officer Group (six persons)
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142,374
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Non-Executive Director Group
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Robert G. Sarver
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4,000
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Raymond Oppel
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4,000
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Peter L. Ax
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4,000
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Richard T. Burke, Sr.
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4,000
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Gerald W. Haddock
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4,000
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Dana Bradford
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4,000
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Michael R. Odell
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4,000
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Non-Executive Director Group (seven persons)
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28,000
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Non-Executive Officer Employee Group (about 201 persons)
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324,200
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(2)
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Weighted average exercise price per share is not applicable as no options were granted in 2015.
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SECURITY OWNERSHIP BY MANAGEMENT AND PRINCIPAL STOCKHOLDERS
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•
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each Meritage director and nominee for director;
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•
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each executive officer named in the summary compensation table; and
|
•
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all Meritage directors and executive officers as a group.
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Name Of
Beneficial Owner
(1)
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Position With The
Company
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Number
Of Shares
Owned
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Right To
Acquire By
May 14,
2016
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Total Shares
Beneficially
Owned
(2)
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Percent Of
Outstanding
Shares
(3)
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Steven J. Hilton
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Director, Chairman and CEO
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1,579,714
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(4)
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—
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1,579,714
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4.0
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%
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Robert G. Sarver
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Director
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207,040
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(5)
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—
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207,040
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*
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Raymond Oppel
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Director
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55,000
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|
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—
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55,000
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*
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Peter L. Ax
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Director
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60,000
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|
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—
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60,000
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*
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Richard T. Burke, Sr.
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Director
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57,500
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|
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—
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57,500
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*
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Gerald Haddock
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Director
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62,000
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(6)
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—
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62,000
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|
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*
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Dana Bradford
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Director
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43,000
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|
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—
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43,000
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|
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*
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Michael R. Odell
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Director
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24,000
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|
|
—
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24,000
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*
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Deb Henretta
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Director
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—
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(7)
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—
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—
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n/a
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Larry W. Seay
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Executive Vice President and
Chief Financial Officer
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73,796
|
|
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—
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73,796
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*
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C. Timothy White
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Executive Vice President,
General Counsel and Secretary
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43,170
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(8)
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—
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43,170
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|
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*
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Phillippe Lord
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Executive Vice President and Chief Operating Officer
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2,671
|
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|
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2,671
|
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*
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Javier Feliciano
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Executive Vice President and Chief Human Resources Officer
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—
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—
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All current directors and executive officers as a group (12 persons)
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|
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2,207,891
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—
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2,207,891
|
|
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5.5
|
%
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(1)
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The address for our directors and executive officers is c/o Meritage Homes Corporation, 8800 East Raintree Drive, Suite 300, Scottsdale, Arizona 85260.
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(2)
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The amounts shown include the shares of common stock actually owned as of March 15,
2016
, and the shares that the person or group had the right to acquire within 60 days of that date. The number of shares includes shares of common stock owned by other related individuals and entities over whose shares of common stock such person has custody, voting control or the power of disposition. As of March 15, 2016, there were no outstanding options for any of our NEOs or Board members as we no longer award stock options as part of equity compensation program.
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(3)
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Based on
39,985,379
shares outstanding as of
March 23, 2016
.
|
(4)
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Shares are held by family trusts.
As of March 15,
2016
, Mr. Hilton had 900,000 shares pledged to a third-party lending institution, 350,000 of which are securing loans. Our pledging policy is discussed on page 26 of this proxy statement.
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(5)
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Shares are held by family trusts (6,000 shares Penny Sarver—wife; 2,000 shares Penny Sarver FBO Max Sarver—minor son; 8,170 shares Robert Sarver—trustee of Eva Lauren Hilton Trust; 8,170 shares Robert Sarver—trustee of Shari Rachel Hilton Trust; 182,700 shares Robert Sarver—trustee of Robert Sarver Trust). Mr. Sarver has expressly disclaimed any beneficial ownership of the shares held by the trusts for the benefit of Mr. Hilton’s children (Eva Lauren Hilton Trust and Shari Rachel Hilton trust).
Mr. Sarver had 124,200 shares pledged to a third party lending institution as of March 15,
2016
. None of these shares secured loans in
2016
. Our pledging policy is discussed on page 26 of this proxy statement.
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(6)
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Includes 15,000 shares held by charities on which Mr. Haddock serves as a board member and has authority to make investment decisions on behalf of. These holdings are with The Haddock Center (10,000 shares), and the Haddock Foundation (5,000 shares). Mr. Haddock has expressly disclaimed beneficial ownership of these shares.
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(7)
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Ms. Henretta was appointed to the Board on March 7, 2016 and did not beneficially own any shares as of March 15, 2016.
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(8)
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29,149 shares are held by a family trust.
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SECURITY OWNERSHIP BY MANAGEMENT AND PRINCIPAL STOCKHOLDERS
|
|
|
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Shares Beneficially Owned
|
||||
Name of Other Beneficial Owners
|
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Address Of Beneficial Owner
|
|
Number
|
|
Percent
|
||
BlackRock, Inc.
(1)
|
|
55 East 52
nd
Street, New York, NY 10055
|
|
4,737,255
|
|
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11.9
|
%
|
Sanders Capital, LLC
(2)
|
|
390 Park Avenue, 17th Floor, New York, NY 10022
|
|
4,001,446
|
|
|
10.2
|
%
|
Dimensional Fund Advisors, LP
(3)
|
|
6300 Bee Cave Road, Austin, TX 78746
|
|
3,359,871
|
|
|
8.5
|
%
|
FMR, LLC
(4)
|
|
245 Summer Street, Boston, MA 02210
|
|
3,275,022
|
|
|
8.3
|
%
|
The Vanguard Group
(5)
|
|
100 Vanguard Blvd. Malvern, PA 19355
|
|
2,819,861
|
|
|
7.1
|
%
|
AllianceBernstein, LP
(6)
|
|
1345 Avenue of the Americas, New York, NY 10105
|
|
2,013,258
|
|
|
5.1
|
%
|
(1)
|
Based solely on a Schedule 13G/A filed with the SEC on January 8, 2016, Blackrock, Inc. and certain affiliated entities have sole voting power with respect to 4,649,755 shares and sole dispositive power with respect to 4,737,255 shares.
|
(2)
|
Based solely on a Schedule 13G filed with the SEC on January 29, 2016, Sanders Capital, LLC has sole voting power with respect to 1,654,838 shares and sole dispositive power with respect to 4,001,446 shares.
|
(3)
|
Based solely on a Schedule 13G filed with the SEC on February 9, 2016, Dimensional Fund Advisors, LP has sole voting power with respect to 3,263,374 shares and sole dispositive power with respect to 3,359,871 shares.
|
(4)
|
Based solely on a Schedule 13G filed with the SEC on February 12, 2016, FMR, LLC has sole dispositive power with respect to 3,275,022 shares.
|
(5)
|
Based solely on a Schedule 13G/A filed with the SEC on February 10, 2016, The Vanguard Group has sole voting power with respect to 51,485 shares, shared voting power with respect to 2,400 shares, sole dispositive power with respect to 2,768,276 shares and shared dispositive power with respect to 51,585 shares.
|
(6)
|
Based solely on a Schedule 13G/A filed with the SEC on February 16, 2016, AllianceBernstein, LP has sole voting power with respect to 1,738,916 shares and sole dispositive power with respect to 2,013,258 shares.
|
|
CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
|
Role of the Board of Directors
|
Corporate Governance Principles and Practices
|
•
|
director qualifications,
|
•
|
independence criteria,
|
•
|
director responsibilities,
|
•
|
committee responsibilities and structure,
|
•
|
officer and director stock ownership requirements,
|
•
|
director resignation policy,
|
•
|
director access to officers and employees,
|
•
|
our philosophy with respect to director compensation,
|
•
|
Board evaluation process,
|
•
|
confidentiality requirements,
|
•
|
director orientation and continuing education, and
|
•
|
our plans with respect to management succession.
|
Director Qualifications and Diversity
|
•
|
management or board experience in a wide variety of enterprises and organizations,
|
•
|
banking and capital markets and finance,
|
•
|
accounting,
|
•
|
legal and regulatory,
|
•
|
real estate, including homebuilding, commercial and land development,
|
•
|
sales and marketing, and
|
•
|
operations.
|
|
CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
|
|
CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
|
Steven J. Hilton, 54
|
|
Mr. Hilton has been the Company’s chairman and chief executive officer since May 2006. Mr. Hilton was the co-chairman and co-chief executive officer of Meritage Homes Corporation from 1996 to May 2006. In 1985, Mr. Hilton co-founded Arizona-based Monterey Homes, the predecessor company to Meritage Homes Corporation. Under Mr. Hilton’s leadership, Monterey became publicly traded in 1996. Mr. Hilton received his Bachelor of Science degree in accounting from the University of Arizona and is a director of Western Alliance Bancorporation (a NYSE listed company), a leading bank holding company based in Phoenix, Arizona.
Mr. Hilton has more than 30 years of real estate experience and is considered an expert and innovator in the homebuilding industry. He is a frequent participant in panels and interviews regarding the industry.
|
|
||
Raymond Oppel, 59
|
|
Mr. Oppel has been a director since December 1997. Mr. Oppel is a licensed real estate broker and currently is active as a private investor in real estate development. He was the co-founder, chairman and chief executive officer of The Oppel Jenkins Group, a regional homebuilder in Texas and New Mexico, which was purchased in 1995 by public homebuilder KB Home.
Mr. Oppel has almost 30 years of experience in the homebuilding business. Mr. Oppel possesses extensive knowledge about the real estate industry in general and the homebuilding industry in particular.
|
|
||
Richard T. Burke, Sr., 72
|
|
Mr. Burke has been a director since September 2004. Mr. Burke is currently the Chairman of the Board of Directors of UnitedHealth Group, which he founded, took public in 1984 and served as chief executive officer as well. From 1995 until 2001, Mr. Burke was the owner and chief executive officer of the Phoenix Coyotes, a National Hockey League team and has served as a director for a number of other companies, both public and private. Mr. Burke previously served as a director for First Cash Financial Services, Inc., a position from which he resigned within the past five years.
Mr. Burke is a business and civic leader in Phoenix, Arizona, and his experience as the chairman and CEO of a multi-billion dollar public company provides the Board with outstanding corporate governance and financial insight.
|
|
||
Dana C. Bradford, 51
|
|
Mr. Bradford has been a director since August 2009. Mr. Bradford is the co-founder of and is currently the Executive Chairman of Waitt Brands, a diversified consumer brands company. From 2005 to 2011, Mr. Bradford was the president and managing partner of McCarthy Capital Corporation, a private equity firm. He serves as executive chairman of the board of Prime Global Sports, a tennis and squash company. Mr. Bradford also serves as a director on the boards of the Waitt Company, Vornado Air, Southwest Value Partners, a San Diego-based real estate investment company and Custom Service Profiles, a provider of customer satisfaction data and analytics. Mr. Bradford formerly served as chairman of the board of SAFE Boats International, a director on the boards of Ballantyne (AMEX: BTN); NRG Media; Guild Mortgage; Gold Circle Films and McCarthy Group, an Omaha-based investment company.
Mr. Bradford earned a bachelor’s degree in business administration from the University of Arizona and an MBA from Creighton University. Mr. Bradford brings additional perspective to the Board relating to real estate and corporate finance matters.
|
|
||
Deb Henretta, 54
|
|
Ms. Henretta was appointed as a director in March 2016.
Ms. Henretta retired from the Proctor & Gamble, Co. ("P&G") in 2015. Throughout her 30 years at P&G, she held various senior positions throughout several sectors, serving as Group President of Global e-Commerce, which included serving as Head of Global Beauty Care; Division President of Global Baby/Toddler & Adult Care; and Division Vice President of Fabric Conditioners and Bleach. She has been a director at Corning, Inc. since 2013 and at Nisource Inc. since 2015.
Ms.
Henretta graduated summa cum laude from St. Bonaventure University with a BA in communications in 1983. She earned her MA in advertising research and teaching assistantship from Syracuse University Newhouse School of Public Communications in 1985.
|
|
|
|
CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
|
Peter L. Ax, 56
|
|
Mr. Ax has been a director since September 2000. He is the managing partner of Phoenix Capital Management, an operationally focused venture capital firm. Mr. Ax is the former chairman and chief executive officer of SpinCycle, Inc., a public reporting consolidator and developer of coin-operated laundromats. Previously, Mr. Ax served as head of the Private Equity Division and senior vice president of Lehman Brothers in New York and has served in various operating roles for enterprises operated by Phoenix Capital Management. Mr. Ax is also on the board of directors of iGo, Inc. (formerly, NASDAQ: IGOI) and serves on the Advisory Board of Directors of Cascadia Capital, a Seattle-based investment banking and merchant banking firm, and also serves annually as a judge in the Wharton Entrepreneurship Business Plan Competition.
Mr. Ax holds an MBA from the Wharton School at the University of Pennsylvania, a J.D. from the University of Arizona, and a B.S.B.A. from the University of Arizona, and has been a certified public accountant. Mr. Ax possesses extensive skills and experience relating to, among other things, capital markets and corporate finance.
|
|
||
Robert G. Sarver, 54
|
|
Mr. Sarver has been a director since December 1996. He is the chairman and chief executive officer of Western Alliance Bancorporation and the managing partner of the Phoenix Suns NBA basketball team. From 1995 to 1998, he served as chairman of Grossmont Bank. He was the chairman and chief executive officer of California Bank & Trust from 1998 to 2001. Mr. Sarver earned a bachelor’s degree in business administration from the University of Arizona and has been a certified public accountant.
Mr. Sarver has been active in the real estate industry for more than 30 years and is known nationwide as a leader and expert in banking. He has extensive experience in a wide spectrum of successful real-estate activities, including commercial, residential and development projects.
|
|
||
Gerald Haddock, 68
|
|
Mr. Haddock was appointed as a director in January 2005. Mr. Haddock is the founder of Haddock Enterprises, LLC and formerly served as president and Chief Executive Officer of Crescent Real Estate Equities, a diversified real estate investment trust. He is currently a director of ENSCO International, Plc., a leading global offshore oil and gas drilling service company. As a director for ENSCO, he has served as its co-lead director and Chairperson of the Audit Committee and is also a member of the Nominating & Governance Committee. From December 2004 to October 2008, Mr. Haddock served as a Board Member of Cano Petroleum, Inc. He also serves on the board of trustees and is a member of various committees for the Baylor College of Medicine (2011 to 2015), the Executive Investment Committee at Baylor University, the M.D. Anderson Proton Therapy Education and Research Foundation, and the CEELI Institute.
Mr. Haddock received his Bachelor of business administration and Juris Doctorate degrees from Baylor University. He also received a Masters of Law in Taxation degree from New York University and an MBA degree from Dallas Baptist University.
|
|
||
Michael R. Odell, 52
|
|
Mr. Odell has been a director since December 2011. Since 2015, he has served as president of Eastern Auto Parts Warehouse, a wholesale automotive parts distributor. Since 2015, Mr. Odell has also served as a board member of Instrument Sales & Service, a manufacturer of electro-mechanical components primarily for the automotive market. From 2008 through 2014, Mr. Odell served as President, chief executive officer and board member of The Pep Boys - Manny, Moe & Jack, a NYSE-listed
Fortune 1000
company and the nation’s leading automotive aftermarket service and retail chain. He joined Pep Boys in 2007 as chief operating officer. Previously, he served as executive vice president and general manager of Sears Retail & Specialty Stores, a $26 billion division of Sears Holdings Corporation.
Mr. Odell started his career as a CPA with Deloitte & Touche LLP. Mr. Odell holds an M.B.A. from Northwestern University's Kellogg School of Management, and a B.S. in Accounting from the University of Denver's Daniels College of Business. Mr. Odell has deep service and retail experience, with a broad background in strategic planning, leadership, operations and finance.
|
|
|
CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
|
Director Independence
|
Board Leadership Structure
|
CEO and Management Succession
|
|
CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
|
Risk Oversight
|
•
|
Our Audit Committee is responsible for reviewing and analyzing significant financial and operational risks and how management is managing and mitigating such risks through its internal controls and risk management processes. Our VP of Internal Audit reports directly to the Audit Committee and provides routine updates on the progress and findings of the department's on-going internal audit reviews. Our external auditors also have at least quarterly discussions with our Audit Committee, and meet both with and without Company management present, to highlight what they perceive as our key financial risks. Our Audit Committee plays an important role in approving our internal controls monitoring and is regularly engaged in discussions with management regarding business risks, operational risks, transactional risks and financial risks.
|
•
|
Our Executive Compensation Committee oversees risks relating to the compensation and incentives provided to our senior executive officers. The Executive Compensation Committee negotiates and approves all of the employment agreements of our NEOs and the Committee approves all grants of equity awards to all of our eligible employees.
|
•
|
Only Independent Directors sit on our governance Committees, with the exception of the Land Committee, to provide greater Director participation in key policy decisions.
|
The Board and Board Committees
|
•
|
Audit Committee
|
•
|
Executive Compensation Committee
|
•
|
Nominating/Governance Committee
|
•
|
Land Committee
|
|
CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
|
Board of Directors
|
|
Audit Committee
|
|
Executive
Compensation
Committee
|
|
Nominating/
Governance
Committee
|
|
Land
Committee
|
Steven J. Hilton*
|
|
|
|
|
|
|
|
|
Peter L. Ax +
|
|
|
|
×
|
|
×
|
|
×
|
Raymond Oppel
|
|
×
|
|
|
|
×
|
|
×
|
Richard T. Burke, Sr.
|
|
×
|
|
×
|
|
×
|
|
|
Gerald Haddock
|
|
×
|
|
×
|
|
|
|
×
|
Dana Bradford
|
|
×
|
|
×
|
|
×
|
|
×
|
Michael R. Odell
|
|
×
|
|
×
|
|
×
|
|
|
Robert G. Sarver
|
|
|
|
|
|
|
|
|
Deb Henretta
|
|
|
|
|
|
|
|
|
Number of Meetings
|
|
8
|
|
5
|
|
4
|
|
9
|
*
|
=
|
Chairman of the Board
|
×
|
=
|
Member
|
|
=
|
Committee Chair
|
+
|
=
|
Lead Independent Director
|
•
|
fulfilling its oversight of the integrity of our financial statements,
|
•
|
overseeing our compliance with legal and regulatory requirements,
|
•
|
determining our independent registered public accounting firm’s qualifications and independence,
|
•
|
evaluating the performance of our internal audit function and independent registered public accounting firm, and
|
•
|
reviewing and approving any related party transaction between us and senior executive officers and directors.
|
•
|
reviewing and approving goals and objectives relative to the compensation of our NEOs, evaluating our NEOs’ performance in light of these goals and approving the compensation of our NEOs,
|
•
|
reviewing and incorporating stockholder preferences with respect to compensation agreements with our NEOs,
|
|
CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
|
•
|
overseeing all equity-based award grants,
|
•
|
making recommendations to the Board of Directors with regard to non-NEO compensation and equity-based awards, and
|
•
|
producing a report on executive compensation to be included in our annual proxy statement.
|
•
|
identifying individuals qualified to become Board members and recommending director nominees for the next annual meeting of stockholders,
|
•
|
reviewing and recommending changes as needed to the Company’s Corporate Governance Principles and Practices,
|
•
|
addressing such items as management succession, including policies and principles for our CEO selection and performance review and succession in the event of an emergency or departure of the CEO,
|
•
|
developing director qualifications and determining whether newly elected directors or prospective director candidates meet those qualifications,
|
•
|
considering recommendations for director nominations received from stockholders,
|
•
|
reviewing the charters of the Compensation Committee, Audit Committee and Nominating/Governance Committee and any other committees
|
•
|
assessing and monitoring, with Board involvement, the Board’s performance,
|
•
|
recommending nominees for the Compensation Committee, Audit Committee, Land Committee, and
|
•
|
promoting adherence to a high standard of corporate governance and Company values.
|
|
CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
|
|
CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
|
Code of Ethics
|
Communications with the Board of Directors
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
•
|
Steven J. Hilton, Chairman and Chief Executive Officer
|
•
|
Larry W. Seay, Executive Vice President, Chief Financial Officer
|
•
|
C. Timothy White, Executive Vice President, General Counsel and Secretary
|
•
|
Phillippe Lord, Executive Vice President, Chief Operating Officer *
|
•
|
Javier Feliciano, Executive Vice President, Chief Human Resources Officer**
|
•
|
Steven M. Davis, former Executive Vice President, Chief Operating Officer *
|
*
|
Mr. Davis' employment ended on March 31, 2015, and Mr. Lord was appointed Executive Vice President, Chief Operating Officer on March 31, 2015.
|
**
|
Mr. Feliciano was appointed Executive Vice President, Chief Human Resources Officer in November 2015 in connection with his first day of employment with the Company.
|
2015 Environment
|
Executive Summary
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
•
|
We grew total home closing revenue to $2.5 billion in
2015
, up 18% over 2014.
|
•
|
Desirable community location and larger product offerings drove our average sales prices on closings up by 6% over 2014 to $388,200.
|
•
|
Net orders for the year increased 19% in 2015 over 2014, and total order value increased 26% year over year, aided by a 6% increase in average sales prices.
|
•
|
The value of orders in backlog at year-end 2015 was 34% higher than 2014 ending backlog value.
|
•
|
We expanded our total active community count to 254 at year-end, the highest in our 30 year history.
|
•
|
With key market drivers indicating a high probability for continued growth in the housing market, we invested approximately $709 million in land and development and ended the year with an approximate four-year supply of 27,800 total lots under control.
|
•
|
We raised additional capital in mid 2015 through a $200 million senior note debt issuance and expanded the capacity of our unsecured revolving credit facility ("Credit Facility") to $500 million to ensure that the Company has sufficient liquidity to continue to grow while maintaining a strong balance sheet.
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Compensation Philosophy and Objectives
|
•
|
0.4 times to 2.5 times our revenues, and
|
•
|
0.25 times to 4.0 times our market capitalization.
|
l
|
|
Armstrong World Industries
|
|
l
|
|
M.D.C. Holdings
|
l
|
|
Beazer Homes USA
|
|
l
|
|
Quanex Building Products
|
l
|
|
Builders First Source
|
|
l
|
|
Ryland Group*
|
l
|
|
Gibraltar Industries
|
|
l
|
|
Standard Pacific*
|
l
|
|
Hovnanian Enterprises
|
|
l
|
|
Taylor Morrison Home
|
l
|
|
KB Home
|
|
l
|
|
Toll Brothers
|
l
|
|
Louisiana Pacific
|
|
l
|
|
USG
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
l
|
|
Beazer Homes USA
|
|
l
|
|
Ryland Group*
|
l
|
|
Hovnanian Enterprises
|
|
l
|
|
Standard Pacific*
|
l
|
|
KB Home
|
|
l
|
|
Taylor Morrison Home
|
l
|
|
M.D.C. Holdings
|
|
l
|
|
Toll Brothers
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Compensation Best Practices
|
WE DO
|
|
WE DO NOT
|
||||
a
|
|
Pay for performance by requiring
a significant portion of the total compensation of our NEOs be determined based on performance tied to strategic objectives.
|
|
r
|
|
Provide perquisites for our NEOs other than those limited to auto allowance, reimbursement of certain insurance premiums and other limited benefits.
|
a
|
|
Have executive Stock Ownership Guidelines in place set at a multiplier of base salary.
|
|
r
|
|
Reprice or replace stock options and other equity awards.
|
a
|
|
Have a clawback policy for most of our NEOs requiring the recoupment of incentive bonuses in the event of a restatement of financial results resulting from willful misconduct or gross negligence of the applicable NEO.
|
|
r
|
|
Allow hedging.
|
a
|
|
Engage a compensation consultant to provide an update on current compensation trends and to provide recommendations on our NEOs’ current compensation packages.
|
|
r
|
|
Allow pledging, subject to certain limited grandfather provisions.
|
a
|
|
Double trigger cash severance based upon a change in control of the Company.
|
|
r
|
|
Provide tax gross-ups applicable to change-in-control and severance payments.
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Independent Compensation Consultant
|
Compensation Program
|
•
|
Alignment with key outcomes of our business strategies;
|
•
|
Appropriate balance of short- and long-term incentive award opportunity;
|
•
|
Provision of market-competitive total compensation opportunity within our industry and peer group;
|
•
|
Appropriate alignment with our stockholders by delivering a significant percentage of total compensation opportunity through equity;
|
•
|
Setting total compensation package where a significant percentage of total compensation is at risk;
|
•
|
Transparency in the communication of plan design and performance goals to enhance understanding; and
|
•
|
Adherence to sound governance practices, including the prudent management of compensation risk.
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Security Ownership Requirements
|
•
|
Directors, three times annual director fees (exclusive of committee or lead director fees),
|
•
|
CEO, ten times base salary, and
|
•
|
COO, CFO, CHRO and General Counsel, two times base salary.
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Equity-Based Awards
|
•
|
All equity-based awards must be approved by the Compensation Committee.
|
•
|
All equity-based grants will be approved at formal meetings (including telephonic) of the Compensation Committee.
|
•
|
The grant date of such awards will be the date of the meeting (or a specified date shortly after the meeting).
|
•
|
The annual equity-based grant shall be approved at a regularly scheduled meeting of the Compensation Committee during the first part of the year, but generally after the annual earnings release. We believe that coordinating the main annual award grant after our annual earnings release will generally result in this grant being made at a time when the public is in possession of all material information about us.
|
•
|
The customary annual grant (including performance-based grants) to executive officers and directors shall generally occur approximately at the same time as the customary annual grant to other employees.
|
•
|
The Company shall not intentionally grant equity-based awards before the anticipated announcement of materially favorable news or delay the grant of equity-based awards until after the announcement of materially unfavorable news.
|
•
|
The Compensation Committee will approve equity-based grants only for persons specifically identified at the meeting by management.
|
Employment Agreements in Effect for 2015
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
Named Executive Officer
|
||||||||||||||||||||||
|
|
Steven J. Hilton
|
|
Larry W. Seay
|
|
C. Timothy White
|
|
Phillippe Lord
(1)
|
|
Javier Feliciano
(2)
|
|
Steven M. Davis
(3)
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Base Salary
|
|
$
|
1,000,000
|
|
|
$
|
600,000
|
|
|
$
|
525,000
|
|
|
$
|
450,000
|
|
|
$
|
320,000
|
|
|
$
|
500,000
|
|
1.
|
EBITDA as adjusted for specific and pre-determined items (adjusted EBITDA);
|
2.
|
Number of home closings; and
|
3.
|
Customer satisfaction rating as determined by our third party rating agency.
|
•
|
A threshold level of achievement below which no incentives will paid;
|
•
|
An intermediate level of achievement at which incentive awards accelerate as the target is approached;
|
•
|
A target level of achievement associated with a market-competitive incentive award; and
|
•
|
A maximum level of achievement above which incentives will not increase (payout ceiling).
|
|
|
Below
Threshold
|
|
Threshold
|
|
Intermediate
|
|
Target
(1)
|
|
Maximum
|
|
|||||
Adjusted EBITDA and Number of Home Closings
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Performance (as % of Goal)
|
|
<82%
|
|
|
82
|
%
|
|
91
|
%
|
|
100
|
%
|
|
105
|
%
|
|
Payout as % of Target
|
|
—
|
%
|
|
25
|
%
|
|
50
|
%
|
|
100
|
%
|
|
200
|
%
|
(2)
|
Customer Satisfaction Rating
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Performance (as % of Goal)
|
|
<88%
|
|
|
88
|
%
|
|
94
|
%
|
|
100
|
%
|
|
113
|
%
|
|
Payout as % of Target
|
|
—
|
%
|
|
25
|
%
|
|
50
|
%
|
|
100
|
%
|
|
200
|
%
|
(2)
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
1.
|
Three-year total shareholder return (“TSR”) relative to our homebuilder peer group (as defined under the caption "—Compensation Philosophies and Objectives — Compensation Peer Group ");
|
2.
|
Achievement of a targeted three-year cumulative earnings per share (“EPS”) goal; and
|
3.
|
Achievement of a targeted three-year average return on asset (“ROA”) goal.
|
•
|
A threshold level of achievement below which no incentives will paid;
|
•
|
A target range level of achievement (e.g. between the low and high target) associated with a market-competitive incentive award; and
|
•
|
A maximum level of achievement above which incentives will not increase (payout ceiling).
|
|
|
Below
Threshold
|
|
Threshold
|
|
Low Target
|
|
Target
(1)
|
|
High Target
|
|
Maximum
|
|||||
EPS (30%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Performance as % of Goal
|
|
<82%
|
|
|
82
|
%
|
|
94
|
%
|
|
100
|
%
|
|
107
|
%
|
|
121% or Greater
|
Shares Awarded as % of Target
|
|
—
|
|
|
50
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
150%
|
ROA (30%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Peer Group Percentile
|
|
<90%
|
|
|
90
|
%
|
|
97
|
%
|
|
100
|
%
|
|
104
|
%
|
|
110% or Greater
|
Shares Awarded as % of Target
|
|
—
|
|
|
50
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
150%
|
Relative TSR (40%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Peer Group Percentile
|
|
<40%
|
|
|
40
|
%
|
|
N/A
|
|
|
50
|
%
|
|
65
|
%
|
|
80% or Greater
|
Shares Awarded as % of Target
|
|
—
|
%
|
|
50
|
%
|
|
N/A
|
|
|
100
|
%
|
|
125
|
%
|
|
150%
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Discussion of NEO Compensation
|
|
|
Named Executive Officer
|
||||||||||||||||||||||
|
|
Steven J. Hilton
|
|
Larry W. Seay
|
|
C. Timothy White
|
|
Phillippe Lord
(1)
|
|
Javier Feliciano
(1)
|
|
Steven M. Davis
(1)
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Base Salary
|
|
$
|
1,000,000
|
|
|
$
|
600,000
|
|
|
$
|
525,000
|
|
|
$
|
450,000
|
|
|
$
|
320,000
|
|
|
$
|
500,000
|
|
(1)
|
Mr. Davis' employment terminated on March 31, 2015 and Mr. Lord was appointed as COO on March 31, 2015. Mr. Feliciano was appointed CHRO on November 9, 2015. Amounts in the table above represent their annual salary per their respective employment agreements.
|
Name and Principal Position
|
|
Approximate Award Fair Value
(at Target level) ($)
|
|
Threshold
(Shares) (#)
|
|
Target
(Shares) (#)
(1)
|
|
Maximum
(Shares) (#)
|
|||||
Steven J. Hilton
|
|
$
|
1,000,000
|
|
|
12,420
|
|
|
24,839
|
|
|
37,259
|
|
Larry W. Seay
|
|
$
|
450,000
|
|
|
5,589
|
|
|
11,177
|
|
|
16,766
|
|
C. Timothy White
|
|
$
|
425,000
|
|
|
5,278
|
|
|
10,556
|
|
|
15,834
|
|
Phillippe Lord
|
|
$
|
350,000
|
|
|
3,598
|
|
|
7,196
|
|
|
10,794
|
|
Steven M. Davis
|
|
$
|
500,000
|
|
|
6,210
|
|
|
12,419
|
|
|
18,629
|
|
(1)
|
Number of shares based on a grant price of $40.26, the closing stock price on the date of grant for Messrs. Hilton, Seay, White and Davis. The number of shares for Mr. Lord are based on a grant price of $48.64, the closing stock price on the date of grant.
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
Named Executive Officer
|
|
||||||||||||||
Actual Results
|
|
Steven J. Hilton
|
|
Larry W. Seay
|
|
C. Timothy White
|
|
Phillippe Lord
|
|
Steven M. Davis
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA (in millions) (60%)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Actual Results
|
|
$271,234
|
|
$271,234
|
|
$271,234
|
|
$271,234
|
|
$271,234
|
|
||||||
Target
|
≥
|
$287,109
|
|
$287,109
|
|
$287,109
|
|
$287,109
|
|
$287,109
|
|
||||||
Target Bonus $
|
|
$1,500,000
|
|
$360,000
|
|
$360,000
|
|
$450,000
|
(2)
|
|
$150,000
|
(3)
|
|||||
NEO Payout %
(1)
|
|
69.6
|
%
|
|
69.6
|
%
|
|
69.6
|
%
|
|
69.6
|
%
|
|
69.6
|
%
|
|
|
NEO Payout $
|
|
$1,043,842
|
|
$250,522
|
|
$250,522
|
|
$313,152
|
|
$104,384
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Number of Home Closings (30%)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Actual Results
|
|
6,522
|
|
|
6,522
|
|
|
6,522
|
|
|
6,522
|
|
|
6,522
|
|
|
|
Target
|
≥
|
6,448
|
|
|
6,448
|
|
|
6,448
|
|
|
6,448
|
|
|
6,448
|
|
|
|
Target Bonus $
|
|
$750,000
|
|
$180,000
|
|
$180,000
|
|
$225,000
|
(2)
|
|
$75,000
|
(3)
|
|||||
NEO Payout %
(1)
|
|
125.2
|
%
|
|
125.2
|
%
|
|
125.2
|
%
|
|
112.6
|
%
|
|
125.2
|
%
|
|
|
NEO Payout $
|
|
$938,843
|
|
$225,322
|
|
$225,322
|
|
$253,327
|
|
$93,885
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Customer Satisfaction Rating (10%)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Actual Results
|
|
89.5
|
|
|
89.5
|
|
|
89.5
|
|
|
89.5
|
|
|
89.5
|
|
|
|
Target
|
≥
|
80.0
|
|
|
80.0
|
|
|
80.0
|
|
|
80.0
|
|
|
80.0
|
|
|
|
Target Bonus $
|
|
$250,000
|
|
$60,000
|
|
$60,000
|
|
$75,000
|
(2)
|
|
$25,000
|
(3)
|
|||||
NEO Payout %
(1)
|
|
195.0
|
%
|
|
195.0
|
%
|
|
195.0
|
%
|
|
147.5
|
%
|
|
195.0
|
%
|
|
|
NEO Payout $
|
|
$487,500
|
|
$117,000
|
|
$117,000
|
|
$110,625
|
|
$48,750
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total NEO Payout $
(4)
|
|
$2,470,185
|
|
$592,844
|
|
$592,844
|
|
$677,104
|
(5
|
)
|
$247,019
|
|
(1)
|
See the table provided on page 35 of this proxy statement for additional information related to the payout percentages as they relate to the targets.
|
(2)
|
Amount reflects a prorated 75% of the target bonus for each metric related to Mr. Lord's promotion to COO effective March 31, 2015.
|
(3)
|
Amount reflects a prorated 25% of the target bonus for each metric related to Mr. Davis's departure as COO effective March 31, 2015.
|
(4)
|
In addition to the three Company-based measures above that apply to all NEOs, our program may also consider individual performance for certain executive positions as appropriate.
|
(5)
|
This amount reflects Mr. Lord's incentive compensation as it related to his position as COO. In addition to this, Mr. Lord received $112,500 in incentive compensation related to his position as Region President from January 1, 2015 through March 30, 2015. This additional amount represents 25% of the annualized bonus as a result of achievement of closing unit and customer satisfaction targets and specific individual performance goals.
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
2016 Developments
|
•
|
The base compensation for Mr. Lord increased to $550,000 effective with the 2016 fiscal year. The value of restricted stock units and the target value of performance awards Mr. Lord is entitled to be granted each year was adjusted from $350,000 to $550,000. The target maximum payout for the cash incentive bonus for Mr. Lord was adjusted to $1,650,000.
|
•
|
For 2016 annual cash incentive bonuses, the performance metrics and payout levels for the Adjusted EBITDA, number of home closings and customer satisfaction performance goals were revised as set forth below. There were no adjustments to the 2016 customer satisfaction rating metrics from the 2015 metrics.
|
|
|
Below
Threshold
|
|
Threshold
|
|
Intermediate
|
|
Target
|
|
Maximum
|
|||||
Adjusted EBITDA and Number of Home Closings
|
|
|
|
|
|
|
|
|
|
|
|||||
Performance (as % of Goal)
|
|
<90%
|
|
|
90
|
%
|
|
100
|
%
|
|
110
|
%
|
|
115
|
%
|
Payout as % of Target
|
|
—
|
%
|
|
25
|
%
|
|
50
|
%
|
|
100
|
%
|
|
200
|
%
|
•
|
For 2016 long-term equity incentive awards, the weighting of the TSR and EPS performance measurement criteria were adjusted as follows. No weighting adjustments were made to the ROA metric.
|
|
|
2016 Weighting
|
|
2015 Weighting
|
||
Measurement Criteria
|
|
|
|
|
||
TSR
|
|
30
|
%
|
|
40
|
%
|
EPS
|
|
40
|
%
|
|
30
|
%
|
|
|
Below
Threshold
|
|
Threshold
|
|
Target (1)
|
|
High Target
|
|
Maximum
|
||||
EPS
|
|
|
|
|
|
|
|
|
|
|
||||
Performance as % of Goal
|
|
<90%
|
|
|
90
|
%
|
|
100
|
%
|
|
110
|
%
|
|
115% or Greater
|
Shares Awarded as % of Target
|
|
—
|
|
|
50
|
%
|
|
100
|
%
|
|
125
|
%
|
|
150%
|
ROA
|
|
|
|
|
|
|
|
|
|
|
||||
Peer Group Percentile
|
|
<90%
|
|
|
90
|
%
|
|
100
|
%
|
|
110
|
%
|
|
115% or Greater
|
Shares Awarded as % of Target
|
|
—
|
|
|
50
|
%
|
|
100
|
%
|
|
125
|
%
|
|
150%
|
(1)
|
Award values at target level for Mr. Lord increased to $550,000 as described above, and the levels for Messrs. Hilton, and White are unchanged from 2015. As a result of his announced retirement (effective April 1, 2016), Mr. Seay was not awarded equity grants in 2016.
|
|
EXECUTIVE COMPENSATION COMMITTEE REPORT
|
|
THE EXECUTIVE COMPENSATION COMMITTEE
|
|
Raymond Oppel—Chair
Peter L. Ax
Richard T. Burke Sr.
Gerald Haddock
Dana Bradford
Michael R. Odell
|
|
COMPENSATION OF OFFICERS AND DIRECTORS
|
Name and Principal Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($
) (2)
|
|
Stock
Awards
($)
(3)
|
|
Non-Equity
Incentive Plan
Compensation
($)
(4)
|
|
All
Other
Compensation
($)
(5)
|
|
Total
($)
|
||||||
Steven J. Hilton,
|
|
2015
|
|
1,000,000
|
|
|
—
|
|
|
2,026,861
|
|
|
2,470,185
|
|
|
34,072
|
|
|
5,531,118
|
|
Chairman and CEO
(1)
|
|
2014
|
|
1,000,000
|
|
|
—
|
|
|
2,026,507
|
|
|
4,477,378
|
|
|
36,687
|
|
|
7,540,572
|
|
|
|
2013
|
|
1,017,500
|
|
|
—
|
|
|
2,128,000
|
|
|
4,090,282
|
|
|
38,274
|
|
|
7,274,056
|
|
Larry W. Seay,
|
|
2015
|
|
600,000
|
|
|
—
|
|
|
912,044
|
|
|
592,844
|
|
|
54,041
|
|
|
2,158,929
|
|
EVP and CFO
|
|
2014
|
|
600,000
|
|
|
—
|
|
|
911,885
|
|
|
1,074,571
|
|
|
62,248
|
|
|
2,648,704
|
|
|
|
2013
|
|
500,000
|
|
|
—
|
|
|
1,064,000
|
|
|
991,583
|
|
|
58,183
|
|
|
2,613,766
|
|
C. Timothy White,
|
|
2015
|
|
525,000
|
|
|
—
|
|
|
861,371
|
|
|
592,844
|
|
|
52,409
|
|
|
2,031,624
|
|
EVP, General Counsel
|
|
2014
|
|
525,000
|
|
|
—
|
|
|
861,243
|
|
|
1,074,571
|
|
|
53,985
|
|
|
2,514,799
|
|
and Secretary
|
|
2013
|
|
525,000
|
|
|
—
|
|
|
1,064,000
|
|
|
743,688
|
|
|
57,106
|
|
|
2,389,794
|
|
Phillippe Lord
*
|
|
2015
|
|
437,500
|
|
|
100,000
|
|
|
683,680
|
|
|
789,604
|
|
|
46,807
|
|
|
2,057,591
|
|
EVP and COO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Javier Feliciano
*
(7)
|
|
2015
|
|
46,667
|
|
|
75,000
|
|
|
353,300
|
|
|
—
|
|
|
1,219
|
|
|
476,186
|
|
EVP and CHRO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Steven M. Davis,
|
|
2015
|
|
126,894
|
|
(6)
|
|
|
1,013,391
|
|
|
247,019
|
|
|
2,082,346
|
|
|
3,469,650
|
|
|
Former EVP and COO
|
|
2014
|
|
500,000
|
|
|
—
|
|
|
1,013,254
|
|
|
1,790,951
|
|
|
47,554
|
|
|
3,351,759
|
|
|
|
2013
|
|
500,000
|
|
|
—
|
|
|
1,064,000
|
|
|
1,311,323
|
|
|
50,841
|
|
|
2,926,164
|
|
*
|
Mr. Lord and Mr. Feliciano were not NEOs in 2014 or 2013.
|
(1)
|
All compensation is for Mr. Hilton’s services in his capacity as the Chairman and Chief Executive Officer of the Company. Mr. Hilton did not receive any separate compensation for his services as a Director.
|
(2)
|
Amounts represent discretionary bonuses awarded to the respective executive officers.
|
(3)
|
The non-vested share (restricted stock and restricted stock unit) grants have a fair value equal to the closing price of our stock on the date of the grant, in accordance with the requirements of Accounting Standards Codification Subtopic (“ASC”) 718. For the TSR portion of performance-based shares, fair value is equal to the valuation from the third party Monte Carlo analysis prepared in conjunction with the 2015 grants. Balance includes all restricted stock and restricted stock units awards granted in the year to our NEOs and not the prorated share of all unvested grants in prior years that vested in the current year. See Note 10 “Stock Based and Deferred Compensation” of our Consolidated Financial Statements included in our
2015
Annual Report on Form 10-K for discussion of assumptions used for computing the fair value of awards granted. For the performance-based share award components included in this column, the amounts represent the grant-date fair value assuming all three performance measures are achieved at the target level of performance (i.e., total shareholder return, targeted three-year cumulative EPS, and targeted three-year average return on assets). The grant date fair value at the maximum performance level for the performance share awards in 2015 is $1,540,265, $693,085, $654,579, $770,101 and $500,494 for Messrs. Hilton, Seay, White, Davis and Lord, respectively. Additional detail is also provided in the “Grant of Plan-Based Awards” table.
|
(4)
|
Non-equity plan compensation earned in 2013, 2014 and
2015
was paid subsequent to each respective year-end. For Mr. Lord, included in the amount above is $112,500 related to his previous role as Region President. Excluded from this amount is $205,126 in
deferred incentive compensation from an incentive bonus earned by Mr. Lord in his role as Region President in 2014 that was paid in 2015.
|
(5)
|
See the following table for more detail.
|
(6)
|
Reflects base salary paid through date of termination, March 31, 2015.
|
(7)
|
Reflects partial year payments as Mr. Feliciano's employment with the Company commenced in November 2015.
|
|
COMPENSATION OF OFFICERS AND DIRECTORS
|
Name
|
|
Health and
Insurance
Premiums
($)
(1)
|
|
401(k)
Match
($)
|
|
Car
Allowance
($)
|
|
Other
($)
(2)
|
|
Total All Other
Compensation
($)
|
|||||
Steven J. Hilton
|
|
27,832
|
|
|
6,240
|
|
|
—
|
|
|
—
|
|
|
34,072
|
|
Larry W. Seay
|
|
33,401
|
|
|
6,240
|
|
|
14,400
|
|
|
—
|
|
|
54,041
|
|
C. Timothy White
|
|
31,018
|
|
|
6,240
|
|
|
14,400
|
|
|
751
|
|
|
52,409
|
|
Phillippe Lord
|
|
26,767
|
|
|
6,240
|
|
|
13,800
|
|
|
—
|
|
|
46,807
|
|
Javier Feliciano
|
|
1,219
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,219
|
|
Steven M. Davis
|
|
3,278
|
|
|
6,240
|
|
|
3,600
|
|
|
2,069,228
|
|
(3)
|
2,082,346
|
|
(1)
|
Includes: (i) employer portion of benefits provided to all employees and (ii) life and disability insurance premiums as contemplated in each NEO’s employment agreement if such elections were made.
|
(2)
|
Other represents the income gross-up to reflect tax consequences of spousal travel for Mr. White and the severance and paid time off payouts resulting for Mr. Davis resulting from his termination of employment.
|
(3)
|
Include cash severance payments of $2.0 million in connection with his termination on March 31, 2015.
|
|
Grant Date
|
Estimated Future Payouts Under
Non-Equity Incentive Plan Awards
(1) (2)
|
Estimated Future Payouts Under
Equity Incentive Plan Awards
(3)
|
All Other
Stock
Awards:
Number of
Shares of
Stock or Units
(#)
|
Grant Date
Fair Value
of Stock and
Option Awards
($)
(4)
|
||||||||||||
Name
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
|||||||||||
Steven J Hilton, Chairman and CEO
|
2/11/2015
|
|
|
|
—
|
|
—
|
|
—
|
|
24,839
|
|
1,000,018
|
|
|||
2/11/2015
|
|
|
|
12,420
|
|
24,839
|
|
37,259
|
|
—
|
|
1,026,843
|
|
||||
|
625,000
|
|
2,500,000
|
|
5,000,000
|
|
|
|
|
|
|
||||||
Larry W. Seay, EVP and CFO
|
2/11/2015
|
|
|
|
—
|
|
—
|
|
—
|
|
11,177
|
|
449,986
|
|
|||
2/11/2015
|
|
|
|
5,589
|
|
11,177
|
|
16,766
|
|
—
|
|
462,058
|
|
||||
|
150,000
|
|
600,000
|
|
1,200,000
|
|
|
|
|
|
|
||||||
C. Timothy White, EVP, General Counsel and Secretary
|
2/11/2015
|
|
|
|
—
|
|
—
|
|
—
|
|
10,556
|
|
424,985
|
|
|||
2/11/2015
|
|
|
|
5,278
|
|
10,556
|
|
15,834
|
|
—
|
|
436,387
|
|
||||
|
150,000
|
|
600,000
|
|
1,200,000
|
|
|
|
|
|
|
||||||
Phillippe Lord, EVP and COO
|
3/31/2015
|
|
|
|
—
|
|
—
|
|
—
|
|
7,196
|
|
350,014
|
|
|||
3/31/2015
|
|
|
|
3,598
|
|
7,196
|
|
10,794
|
|
—
|
|
333,666
|
|
||||
|
187,500
|
|
750,000
|
|
1,125,000
|
|
|
|
|
|
|
||||||
Javier Feliciano, EVP and CHRO
|
11/18/2015
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
10,000
|
|
353,300
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Steven M. Davis, Former EVP and COO
|
2/11/2015
|
|
|
|
—
|
|
—
|
|
—
|
|
12,419
|
|
499,989
|
|
|||
2/11/2015
|
|
|
|
6,210
|
|
12,419
|
|
18,629
|
|
—
|
|
513,402
|
|
||||
|
250,000
|
|
1,000,000
|
|
2,000,000
|
|
|
|
|
|
|
(1)
|
Actual non-equity incentive plan payouts for 2015 are discussed in the section under the caption
—
"Discussion of NEO Compensation".
|
(2)
|
Mr. Lord's non-equity incentive plan awards in 2015 were pro-rated 75% in connection with his effective date of March 31, 2015 as an executive officer.
|
(3)
|
Equity incentive awards granted in 2015 have a three-year cliff vest, with the exception of those granted to Mr. Feliciano, whose shares vest in three equal installments over three years.
|
(4)
|
Restricted stock units have a fair value equal to the closing price of our stock on the date of grant in accordance with the requirements of ASC 718. The grant-date fair value amounts relating to the performance share awards represent the grant-date fair value assuming all three performance measures are achieved at the target level of performance. Grant date fair value for the TSR portion of awards is based on a Monte-Carlo model to assess fair value as of the date of grant. Grant date fair value for the EPS and ROA awards is calculated as of the closing stock price on the date of grant.
|
|
COMPENSATION OF OFFICERS AND DIRECTORS
|
|
|
Stock Awards
|
||||||||||||
|
|
|
|
|
|
Equity Incentive Plan Awards
|
||||||||
Name
|
|
Number
of Shares
or Units
of Stock
that Have
Not
Vested
|
|
Market
Value of
Shares of
Units of
Stock
that
Have Not
Vested
(8)
|
|
Number of
Unearned
Shares, Units or
Other Rights
that Have Not
Vested
(#)
(6) (7)
|
|
Market or
Payout Value
of Unearned
Shares, Units or
Other Rights
that Have
Not
Vested
($)
(8)
|
||||||
Steven J Hilton, Chairman and CEO
|
|
88,435
|
|
(1)(3)
|
$
|
3,005,906
|
|
|
46,769
|
|
|
$
|
1,589,678
|
|
Larry W. Seay, EVP and CFO
|
|
41,878
|
|
(2)(3)
|
$
|
1,423,433
|
|
|
21,045
|
|
|
$
|
715,320
|
|
C. Timothy White,
EVP, General Counsel and Secretary
|
|
40,709
|
|
(2)(3)
|
$
|
1,383,699
|
|
|
19,876
|
|
|
$
|
675,585
|
|
Phillippe Lord, EVP and COO
|
|
19,796
|
|
(4)
|
$
|
672,866
|
|
|
7,196
|
|
|
$
|
244,592
|
|
Javier Feliciano, EVP and CHRO
|
|
10,000
|
|
(5)
|
$
|
339,900
|
|
|
—
|
|
|
$
|
—
|
|
Steven M. Davis, Former EVP and COO
|
|
8,333
|
|
(3)
|
$
|
283,239
|
|
|
23,384
|
|
|
$
|
794,822
|
|
(1)
|
Remaining unvested shares vest 25,000 in February 2016, 21,930 in February 2017, and 24,839 in February 2018. See also Note (3) below.
|
(2)
|
Remaining unvested shares vest as follows: In February 2016, 12,500 each for Messrs. Seay and White; in February 2017, 9,868 for Mr. Seay and 9,320 for Mr. White and in February 2018, 11,177 for Mr. Seay and 10,556 for Mr. White. See also Note (3) below.
|
(3)
|
Includes performance-based shares that satisfied performance criteria as of December 31, 2015 and vested in February 2016. These shares include 16,666 for Mr. Hilton, and 8,333 each for Messrs. Seay, White and Davis.
|
(4)
|
Remaining unvested shares for Mr. Lord vest as follows: 5,100 in February 2016, 3,900 in February 2017, 2,400 in February 2018, 7,196 shares that vest in March 2018 and 1,200 in February 2019.
|
(5)
|
Unvested shares for Mr. Feliciano vest in equal annual installments over three years beginning in November 2016.
|
(6)
|
Represents performance-based shares that vests 21,930 in February 2017 and 24,839 in February 2018 for Mr. Hilton. For Messrs. Seay, White, and Davis, represents performance-based shares that vest as follows: 9,868, 9,320 and 10,965, respectively, in February 2017 and 11,177, 10,556 and 12,419, respectively, in February 2018. For Mr. Lord, amount represents 7,196 performance-based shares that vest in March 2018. The vesting of all shares is subject first to the satisfaction of specific performance criteria. See additional discussion regarding these performance share awards in footnotes 3 and 4 in the 2015 Grants of Plan-Based Awards table included in this proxy statement.
|
(7)
|
Excludes performance-based shares scheduled to vest in February 2016 that were forfeited as of December 31, 2015 due to failure to meet performance criteria. Forfeited shares include 8,334 for Mr. Hilton and 4,167 each for Messrs. Seay, White and Davis.
|
(8)
|
Computed as the number of shares or units of stock that have not yet vested multiplied by the closing price of the Company’s stock on
December 31, 2015
of $33.99.
|
|
COMPENSATION OF OFFICERS AND DIRECTORS
|
|
|
Option Awards
|
|
Stock Awards
|
||||||||||
Name
|
|
Number of Shares Acquired on Exercise (#)
|
|
Value Realized on Exercise ($)
|
|
Number of Shares Acquired on Vesting (#)
(3)
|
|
Value Realized on Vesting ($)
|
||||||
Steven J Hilton, Chairman and CEO
|
|
139,840
|
|
|
$
|
3,347,712
|
|
|
37,500
|
|
|
$
|
1,512,750
|
|
Larry W. Seay, EVP and CFO
|
|
—
|
|
|
$
|
—
|
|
|
25,000
|
|
|
$
|
1,008,500
|
|
C. Timothy White, EVP, General Counsel and Secretary
|
|
—
|
|
|
$
|
—
|
|
|
25,000
|
|
|
$
|
1,008,500
|
|
Phillippe Lord
(1)
|
|
—
|
|
|
$
|
—
|
|
|
6,100
|
|
|
$
|
244,298
|
|
Javier Felicano
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Steven M. Davis, Former EVP and COO
(2)
|
|
—
|
|
|
$
|
—
|
|
|
60,884
|
|
|
$
|
2,703,660
|
|
(1)
|
Shares vested represent those granted to Mr. Lord prior to his appointment as Chief Operating Officer.
|
(2)
|
Mr. Davis' employment terminated on March 31, 2015. Accordingly the amount presented includes the accelerated vesting of 35,884 shares as outlined in his employment agreement.
|
(3)
|
In connection with the grant of their 2012 grants of restricted stock 18,750 restricted shares for Mr. Hilton and 12,500 shares each for Messrs. Seay, White and Davis vested in February 2015. In addition, equal amounts of performance shares vested in February 2015 as a result of exceeding the performance targets for awards granted in 2012, summarized as follows:
|
|
|
Named Executive Officer
|
||||||||||||||
Actual Results (dollars in thousands)
|
|
Steven J. Hilton
|
|
Larry W. Seay
|
|
C. Timothy White
|
|
Steven M. Davis
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Adjusted Pre-Tax Income
|
|
|
|
|
|
|
|
|
||||||||
Actuals
|
|
$
|
260,521
|
|
|
$
|
260,521
|
|
|
$
|
260,521
|
|
|
$
|
260,521
|
|
Target
|
≥
|
$
|
240,469
|
|
|
$
|
240,469
|
|
|
$
|
240,469
|
|
|
$
|
240,469
|
|
Shares Vested
|
|
6,250
|
|
|
4,167
|
|
|
4,167
|
|
|
4,167
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Adjusted General & Administrative Expenses
|
|
|
|
|
|
|
|
|
||||||||
Actuals
|
|
$
|
261,341
|
|
|
$
|
261,341
|
|
|
$
|
261,341
|
|
|
$
|
261,341
|
|
Target
|
≤
|
$
|
309,646
|
|
|
$
|
309,646
|
|
|
$
|
309,646
|
|
|
$
|
309,646
|
|
Shares Vested
|
|
6,250
|
|
|
4,166
|
|
|
4,166
|
|
|
4,166
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Customer Satisfaction Rating
|
|
|
|
|
|
|
|
|
||||||||
Actuals
|
|
90.00
|
|
|
90.00
|
|
|
90.00
|
|
|
90.00
|
|
||||
Target
|
≥
|
80.00
|
|
|
80.00
|
|
|
80.00
|
|
|
80.00
|
|
||||
Shares Vested
|
|
6,250
|
|
|
4,167
|
|
|
4,167
|
|
|
4,167
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total Shares Vested
(1)
|
|
18,750
|
|
|
12,500
|
|
|
12,500
|
|
|
12,500
|
|
(1)
|
Mr. Lord had no performance-related shares vest in 2015.
|
|
COMPENSATION OF OFFICERS AND DIRECTORS
|
Nonqualified Deferred Compensation Plans
|
Executive Officer
|
|
Executive Contributions in Last Fiscal Year ($)
(1)
|
|
Registrant Contributions in Last Fiscal Year ($)
(2)
|
|
Aggregate Earnings in Last Fiscal Year ($)
(3)
|
|
Aggregate Withdrawals/ Distributions ($)
|
|
Aggregate Balance at Last Fiscal Year End ($)
|
||||||||
C. Timothy White, EVP, General Counsel and Secretary
|
|
$
|
399,893
|
|
|
—
|
|
|
$
|
(10,738
|
)
|
|
—
|
|
|
$
|
524,948
|
|
Steven M. Davis, Former EVP and COO
|
|
$
|
401,940
|
|
|
—
|
|
|
$
|
(52,523
|
)
|
|
—
|
|
|
$
|
778,290
|
|
(1)
|
These amounts reflect compensation the NEOs earned in our 2014 and
2015
fiscal years that they have voluntarily deferred. For each identified NEO, all amounts reported as contributions in the last fiscal year are included as compensation earned in the Summary Compensation Table for 2014 and 2015. In addition, all of the amounts, exclusive of cumulative earnings/losses, reported in the aggregate balance at fiscal year were reported as compensation to the NEO in our Summary Compensation Table in 2015 and prior years.
|
(2)
|
Meritage does not provide matching contributions.
|
(3)
|
These amounts do not include any above-market or preferential earnings. Accordingly, these amounts are not reported in the Summary Compensation Table.
|
Potential Payments upon Termination or Change of Control Summary
|
|
COMPENSATION OF OFFICERS AND DIRECTORS
|
Employment Agreements
—
Severance Benefits
|
|
Voluntary Resignation by Officer Without Good Reason
|
Voluntary Resignation by Officer With Good Reason
(1) (4)
|
Termination by the Company Without Cause
(1) (4)
|
Termination by the Company With Cause
|
Death or Disability
|
Retirement
(1) (2)
|
Base salary and paid time off through date of termination
|
X
|
X
|
X
|
X
|
X
|
X
|
Annual cash incentive awards, performance share awards and restricted stock unit awards earned in a previous year but not yet paid
|
X
|
X
|
X
|
X
|
X
|
X
|
Pro-rata annual cash incentive bonus for period in which termination occurs
|
|
X
|
X
|
|
|
X
|
Target bonus for the performance period in which the termination occurs
|
|
|
|
|
X
|
|
Certain previously granted time based awards and restricted stock units that are outstanding shall immediately vest and become unrestricted
|
|
X
|
X
|
|
X
|
X
|
Performance shares awarded shall be delivered and shall continue to vest subject to achievement of specified performance goals
|
|
X
|
X
|
|
|
X
|
Previously granted performance share awards that have not vested will immediately vest and become unrestricted following the end of the applicable performance period based on actual performance achieved
|
|
X
|
X
|
|
|
X
|
Target number of previously granted performance share awards that have not vested will immediately vest and become unrestricted
|
|
|
|
|
X
|
|
Any outstanding stock options shall vest and remain exercisable for the remainder of the original term
|
|
X
|
X
|
|
X
|
X
|
Payment for health coverage equal to 150% of monthly COBRA premium
|
|
X
|
X
|
|
X
|
|
Severance payment equal to the sum of (A) two times the executive officer’s base salary on the date of termination and (B) two times the higher of (x) the average of the bonus compensation paid to the executive officer for the two years prior to his termination of employment or (y) the annual bonus paid to the executive officer for the year preceding the date of termination
(3) (5)
|
|
X
|
X
|
|
|
|
(1)
|
Mr. Hilton shall render reasonable consulting services during the 24-month period following termination. Messrs. Seay and White shall render reasonable consulting services during the 12-month period following termination.
|
(2)
|
In order to qualify for the above retirement termination benefits, in addition to any time restrictions as contemplated in each individual employment agreement, executive must have completed 15 cumulative years as a named executive officer or member of the board. Messrs. Hilton, Seay and White have each satisfied the 15-year threshold.
|
(3)
|
In the case for Messrs. Seay and White for termination without cause, the severance payment has a multiple of one in the calculation.
|
(4)
|
Mr. Hilton's severance payment may not be less than $5 million and may not exceed $10 million. Messrs. Seay and White's severance payments may not exceed $2 million each.
|
(5)
|
Bonus compensation is determined as the greater of (a) the actual bonus paid to executive or (b) the fair value on the date of grant of the shares of restricted stock, stock options and other equity-based awards that become vested in such year of termination.
|
|
COMPENSATION OF OFFICERS AND DIRECTORS
|
|
Voluntary Resignation by Officer Without Good Reason
|
Voluntary Resignation by Officer With Good Reason
|
Termination by the Company Without Cause
(1)
|
Termination by the Company With Cause
|
Death or Disability
|
Base salary and paid time off through date of termination
|
X
|
X
|
X
|
X
|
X
|
Payment for health coverage equal to 150% of monthly COBRA premium
|
|
|
X
|
|
|
Severance payment equal to the sum of (a) executive's annual salary and (b) the higher of (x) the average of the bonus compensation paid to the executive officer for the two years prior to his termination of employment or (y) the annual bonus paid to the executive officer for the year preceding the date of termination
|
|
|
X
|
|
|
(1)
|
In no event shall the sum of the total amount due exceed $2,000,000.
|
|
COMPENSATION OF OFFICERS AND DIRECTORS
|
Change of Control Agreements
—
Severance Benefits
|
•
|
For Mr. Hilton, the severance payment is equal to the sum of (i) three times the higher of (x) Mr. Hilton’s annual base salary on the date of termination or (y) his base salary on the date preceding the Change of Control and (ii) three times the highest of (x) Mr. Hilton’s average annual incentive compensation* for the two years prior to termination of employment or (y) his annual incentive compensation* for the year preceding the year in which the Change of Control occurred. The severance payment for Mr. Hilton in the event of a Change of Control may not exceed $15 million.
|
•
|
For Messrs. Seay and White, the severance payment is equal to the sum of (i) two times the higher of (x) the executive’s annual base salary on the date of termination or (y) the executive’ base salary on the date preceding the Change of Control and (ii) two times the highest of (x) the executive’s average annual incentive compensation* for the two years prior to termination of employment or (y) the executive’s annual incentive compensation* for the year preceding the year in which the Change of Control occurred. The severance payments for Messrs. Seay and White in the event of a Change of Control may not exceed $6 million.
|
•
|
For Mr. Lord, the payment is equal to the sum of: (a) his annual base salary through the date of termination; (b) the higher of (x) his average annual cash incentive bonus paid for the two years prior to termination of employment or (y) his annual cash incentive bonus paid in the year preceding termination and (c) 150% of the monthly COBRA premium payable for coverage in effect on date of termination under the Company’s health plan for 18 months. In no event shall the sum of the above amount due exceed $2 million.
|
•
|
For Messrs. Hilton, Seay and White, any restricted stock, options and other equity-based awards shall become immediately accelerated and fully vested and exercisable and all restrictions on restricted stock awards shall immediately lapse.
|
Other Matters Regarding the Employment Agreements and Change of Control Agreements
|
|
COMPENSATION OF OFFICERS AND DIRECTORS
|
Executive Officer
(1)
|
|
Voluntary Termination by Executive Without Good Reason
(2)(3)
|
|
Voluntary Termination by Executive With Good Reason
(1)(2)
|
|
Termination By Company Without Cause
(1)(2)
|
|
Death or Disability
(1)(2)
|
|
Retirement
(2)
|
|
Change of Control
(1)(2)
|
||||||||||||
Steven J. Hilton
|
|
$
|
—
|
|
|
$
|
14,910,865
|
|
|
$
|
14,910,865
|
|
|
$
|
7,410,865
|
|
|
$
|
—
|
|
|
$
|
19,953,892
|
|
Larry W. Seay
|
|
$
|
—
|
|
|
$
|
4,303,081
|
|
|
$
|
3,977,652
|
|
|
$
|
2,903,081
|
|
|
$
|
1,855,514
|
|
|
$
|
7,002,616
|
|
C. Timothy White
|
|
$
|
—
|
|
|
$
|
4,233,486
|
|
|
$
|
3,833,057
|
|
|
$
|
2,833,486
|
|
|
$
|
1,776,045
|
|
|
$
|
6,766,272
|
|
Phillippe Lord
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,149,091
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
1,149,091
|
|
(1)
|
Mr. Feliciano's employment arrangement does not provide for severance or change-in-control benefits.
|
(2)
|
The actual expense that would be recognized by the Company in the event of a severance event may differ materially from the numbers presented in the table above as a result of the required computation in accordance with generally accepted accounting principles for stock compensation expense.
|
(3)
|
The amounts presented do not include cash bonuses earned for fiscal 2015, but not paid as of
December 31, 2015
. Cash bonuses earned and not paid are presented separately as 2015 compensation in the Summary Compensation table on page 42.
|
(4)
|
In January 2016, we announced that Mr. Seay will retire on March 31, 2016.
|
Director Compensation
|
Name
|
|
Annual Retainer Fees Earned or Paid in Cash ($)
|
|
Annual Committee Fees Earned or Paid in Cash ($)
|
|
Stock Awards ($)
(1)
|
|
Total ($)
|
||||
Robert G. Sarver
|
|
50,000
|
|
|
—
|
|
|
161,040
|
|
|
211,040
|
|
Raymond Oppel
|
|
50,000
|
|
|
40,000
|
|
|
161,040
|
|
|
251,040
|
|
Peter L. Ax
|
|
50,000
|
|
|
80,000
|
|
|
161,040
|
|
|
291,040
|
|
Richard T. Burke, Sr.
|
|
50,000
|
|
|
30,000
|
|
|
161,040
|
|
|
241,040
|
|
Gerald Haddock
|
|
50,000
|
|
|
40,000
|
|
|
161,040
|
|
|
251,040
|
|
Dana Bradford
|
|
50,000
|
|
|
30,000
|
|
|
161,040
|
|
|
241,040
|
|
Michael R. Odell
|
|
50,000
|
|
|
30,000
|
|
|
161,040
|
|
|
241,040
|
|
Deb Henretta
(3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
See Note 10 “Stock Based and Deferred Compensation” of our Consolidated Financial Statements included in our 2015 Annual Report on Form 10-K for discussion of the assumptions used for computing the fair value of awards granted. As required, the calculation is equal to the fair value of the award multiplied by the total number of awards granted in
2015
, not the proportionate share of all existing unvested awards that vested in the current year.
|
(2)
|
We reimburse directors for out-of-pocket expenses incurred in attending Board and committee meetings and we also reimburse certain directors for charter aircraft service or other travel and lodging-related expenses.
During
2015
, we made reimbursements of approximately $30,000, $6,000, $6,000, $4,000 and $3,000 to Messrs. Burke, Bradford, Oppel, Haddock and Odell, respectively.
|
(3)
|
Ms. Henretta was appointed to the Board of Directors on March 7, 2016 and accordingly received no compensation during 2015.
|
|
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
|
Plan Category
|
|
(a)
Number of Shares to
be Issued Upon
Exercise of
Outstanding Options,
Warrants and Rights
(1)
|
|
(b)
Weighted Average
Exercise Price of
Outstanding
Options, Warrants
and Rights
|
|
(c)
Number of Securities Remaining
Available for Future Issuance
under Equity Compensation
Plans (Excluding Securities
Reflected in Column (a)
(2)
|
||||
Equity compensation plans approved by stockholders
|
|
1,078,877
|
|
|
$
|
16.11
|
|
|
1,145,923
|
|
Equity compensation plans not approved by stockholders
|
|
—
|
|
|
N/A
|
|
|
—
|
|
|
Total
|
|
1,078,877
|
|
|
$
|
16.11
|
|
|
1,145,923
|
|
(1)
|
Balance includes 14,400 options, 883,707 time-based restricted stock awards and units, and 180,770 performance share awards.
|
(2)
|
Weighted average exercise price excludes the value for the time-based restricted shares and performance share awards noted in (1) above.
|
(3)
|
The number of securities remaining available for issuance is comprised of shares under our Plan as defined in our annual report on Form 10-K. In addition to stock options, stock appreciation rights and performance share awards, the Plan allows for the grant of restricted stock shares and restricted stock units. Under the Plan, awards other than stock options and stock appreciation rights are counted against the shares available for grant as 1.38 shares for every one share issued in connection with such awards.
|
|
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
|
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Air Charter Services
|
|
$
|
695
|
|
|
$
|
598
|
|
|
$
|
421
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Interest Earned
|
|
$
|
137
|
|
|
$
|
430
|
|
|
$
|
654
|
|
|
INDEPENDENT AUDITORS
|
|
|
2015
|
|
2014
|
||||
Audit fees
(1)
|
|
$
|
1,140,700
|
|
|
$
|
1,109,100
|
|
Audit-related fees
|
|
—
|
|
|
—
|
|
||
Audit and audit-related fees
|
|
$
|
1,140,700
|
|
|
$
|
1,109,100
|
|
Tax fees
|
|
—
|
|
|
—
|
|
||
All other fees
|
|
—
|
|
|
—
|
|
||
Total fees
|
|
$
|
1,140,700
|
|
|
$
|
1,109,100
|
|
(1)
|
Audit fees consisted principally of fees for audit and review services, and approximately $
51,000 a
nd $34,000 in 2015 and 2014, respectively, for services related to various comfort letters provided in connection with securities offerings and expert consents provided in connection with SEC filings.
|
|
REPORT OF THE AUDIT COMMITTEE
|
|
|
|
THE AUDIT COMMITTEE
|
|
|
|
Peter L. Ax
—Chair
Raymond Oppel
Richard T. Burke Sr.
Gerald Haddock
Dana Bradford
Michael R. Odell
|
|
STOCKHOLDER PROPOSALS
|
|
FORWARD-LOOKING STATEMENTS
|
|
ANNUAL REPORT ON FORM 10-K AND OTHER MATTERS
|
|
|
|
Meritage Homes Corporation
|
|
|
|
C. Timothy White
|
|
Executive Vice President, General Counsel and Secretary
|
|
March 24, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
1. Election of five Class I Directors, each to hold office until our 2018 annual meeting.
|
|
2. Ratification of the selection of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the 2016 fiscal year.
|
|
|
|
|
|
|
||||||||||||
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN
|
|
FOR
¨
AGAINST
¨
ABSTAIN
¨
|
||||||||||||
01
|
|
Raymond Oppel
|
|
|
|
|
|
¨
|
|
¨
|
|
¨
|
|
3. Advisory vote to approve compensation of our Named Executive Officers.
|
|
|
|
|
|
|
02
|
|
Steven J. Hilton
|
|
|
|
|
|
¨
|
|
¨
|
|
¨
|
|
FOR
¨
AGAINST
¨
ABSTAIN
¨
|
||||||
03
|
|
Richard T. Burke Sr.
|
|
|
|
|
|
¨
|
|
¨
|
|
¨
|
|
|
|
|
|
|
|
|
04
|
|
Dana C. Bradford
|
|
|
|
|
|
¨
|
|
¨
|
|
¨
|
|
4. Amendment to our 2006 Stock Incentive Plan to increase the number of shares available for issuance.
|
|
|
|
|
|
|
05
|
|
Deb Henretta
|
|
|
|
|
|
¨
|
|
¨
|
|
¨
|
|
FOR
¨
AGAINST
¨
ABSTAIN
¨
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
NOTE: The conduct of any other business that may properly come before the meeting or any adjournment or postponement thereof.
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
I plan to attend the meeting
|
¨
|
|
||||||||||||||||
|
|
||||||||||||||||||||||
|
Please sign your name exactly as it appears hereon. When signing as attorney, executor, administrator, trustee, guardian, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer.
|
||||||||||||||||||||||
|
|||||||||||||||||||||||
|
Date:
|
|
|||||||||||||||||||||
|
|||||||||||||||||||||||
Signature
|
|||||||||||||||||||||||
|
|||||||||||||||||||||||
Signature (if held jointly)
|
|||||||||||||||||||||||
|
CONTROL NUMBER
|
|
|||||||||||||||||||||
|
|
CONTROL NUMBER
|
||||
|
||||
|
|
|
||
|
||||
PROXY VOTING INSTRUCTIONS
|
||||
|
||||
Please have your 11 digit control number ready when voting by Internet or Telephone
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTERNET
|
|
|
|
TELEPHONE
|
|
|
|
MAIL
|
|
Vote Your Proxy on the Internet:
|
|
|
|
Vote Your Proxy by Phone:
|
|
|
|
Vote Your Proxy by Mail:
|
|
Go to
www.cesvote.com
|
|
|
|
Call 1 (888) 693-8683
|
|
|
|
|
|
Have your proxy card available
|
|
|
|
Use any touch-tone telephone to
|
|
|
|
Mark, sign, and date your proxy
|
|
when you access the above
|
|
|
|
vote your proxy. Have your proxy
|
|
|
|
card, then detach it, and return it
|
|
website. Follow the prompts to
|
|
|
|
card available when you call.
|
|
|
|
in the postage-paid envelope
|
|
vote your shares.
|
|
|
|
Follow the voting instructions to
|
|
|
|
provided.
|
|
|
|
|
|
vote your shares.
|
|
|
|
|
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