0000912057-01-537546.txt : 20011107 0000912057-01-537546.hdr.sgml : 20011107 ACCESSION NUMBER: 0000912057-01-537546 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20011102 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HORTON D R INC /DE/ CENTRAL INDEX KEY: 0000882184 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 752386963 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-43336 FILM NUMBER: 1774279 BUSINESS ADDRESS: STREET 1: 1901 ASCENSION BLVD STREET 2: STE 100 CITY: ARLINGTON STATE: TX ZIP: 76006 BUSINESS PHONE: 8178568200 MAIL ADDRESS: STREET 1: 1901 ASCENSION BLVD STREET 2: SUITE 100 CITY: ARLINGTON STATE: TX ZIP: 76006 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SCHULER HOMES INC CENTRAL INDEX KEY: 0001126899 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 990351900 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 828 FORT STREET MALL STREET 2: FOURTH FLOOR CITY: HONOLULU STATE: HI ZIP: 96813 BUSINESS PHONE: 8085215661 MAIL ADDRESS: STREET 1: 828 FORT STREET MALL STREET 2: FOURTH FLOOR CITY: HONOLULU STATE: HI ZIP: 96813 FORMER COMPANY: FORMER CONFORMED NAME: SCHULER HOLDINGS INC DATE OF NAME CHANGE: 20001023 SC 13D 1 a2062377zsc13d.htm SCHEDULE 13D Prepared by MERRILL CORPORATION
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D
(Rule 13d-101)

     INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
13d-1(a) AND AMENDMENTS THERETO FILED
PURSUANT TO RULE 13d-2(a)
(Amendment No.   )1

D.R. Horton, Inc.
(Name of Issuer)

Common Stock, par value $.01 per share
(Title of Class of Securities)

23331A 10 9
(CUSIP Number)

Schuler Homes, Inc.
400 Continental Blvd.
Suite 100
El Segundo, California 90245

with a copy to

Gibson, Dunn & Crutcher, LLP
2029 Century Park East Suite 4000
Los Angeles, California 90067
Attention: Robert K. Montgomery, Esq.
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

October 22, 2001
(Date of Event which Requires Filing of this Statement)

    If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box.  / /

        Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. (Continued on following pages)


1
The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

    The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

SEC 1746 (02-06-98)

(Continued on following pages)

(Page 1 of 8 Pages)


CUSIP No.  23331A 10 9   13D   Page 2 of 8 Pages
             

(1)   NAME OF REPORTING PERSONS. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Schuler Homes, Inc.
99-0351900

 

 

 

 

 

 

 

(2)   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*   (a)   / /
        (b)   / /

 

 

 

 

 

 

 

(3)   SEC USE ONLY        

 

 

 

 

 

 

 

(4)   SOURCE OF FUNDS*
OO
       

 

 

 

 

 

 

 

(5)   CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
            / /

 

 

 

 

 

 

 

(6)   CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America

 

 

 

 

 

 

 

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH   (7)   SOLE VOTING POWER
-0-

 

 

 

 

 

 

 
       
        (8)   SHARED VOTING POWER
12,271,993(1)

 

 

 

 

 

 

 
       
        (9)   SOLE DISPOSITIVE POWER
-0-

 

 

 

 

 

 

 
       
        (10)   SHARED DISPOSITIVE POWER
-0-

 

 

 

 

 

 

 

(11)   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12,271,993(1)

 

 

 

 

 

 

 

(12)   CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
N/A
            / /

 

 

 

 

 

 

 

(13)   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

 

 

 

 

 

 

(14)   TYPE OF REPORTING PERSON*
CO

 

 

 

 

 

 

 

*SEE INSTRUCTIONS BEFORE FILLING OUT!
(1)
Schuler Homes, Inc. has entered into a Voting Agreement, dated as of October 22, 2001, with certain stockholders of D.R. Horton, Inc., pursuant to which such stockholders have agreed to vote their shares of Common Stock of D.R. Horton, Inc. in favor of a proposal to approve and adopt the Merger Agreement (as defined below). Schuler Homes, Inc. does not have any rights as a stockholder of D.R. Horton, Inc. pursuant to such Voting Agreement. Accordingly, Schuler Homes, Inc. expressly disclaims beneficial ownership of all shares subject to such Voting Agreement.

CUSIP No.  23331A 10 9   13D   Page 3 of 8 Pages

    This Schedule 13D is filed by Schuler Homes, Inc. ("Schuler Homes" or the "Reporting Person") to report the Reporting Person's agreement with certain stockholders of D.R. Horton, Inc. (collectively, the "Horton Stockholders"), pursuant to which the Horton Stockholders have agreed to vote their shares of common stock of D.R. Horton, Inc. ("D.R. Horton") described herein in favor of the proposed merger of Schuler Homes with and into D.R. Horton (the "Merger").


Item 1.  Security and Issuer.

    (a)
    Name of Issuer: D.R. Horton, Inc.

    (b)
    Title of Class of Securities: Common Stock

    (c)
    Address of Issuer's Principal Executive Offices: 1901 Ascension Blvd., Suite 100, Arlington, Texas 76006


Item 2.  Identity and Background.

    This Schedule 13D is filed by Schuler Homes, Inc., a Delaware corporation ("Schuler Homes"). The address of the principal executive office of Schuler Homes is 400 Continental Boulevard, Suite 100, El Segundo, California 90245. Schuler Homes, Inc. is a national homebuilder engaged in constructing and selling single-family homes.

    To the best of Schuler Homes' knowledge as of the date hereof, the name, business address, present principal occupation or employment and citizenship of each executive officer and director of Schuler Homes, and the name, principal business and address of any corporation or other organization in which such employment is conducted is set forth in Schedule I hereto. The information contained in Schedule I is incorporated herein by reference.

    During the last five years, neither Schuler Homes nor, except as provided in Schedule I hereto, to the best knowledge of Schuler Homes, any of the executive officers or directors of Schuler Homes listed in Schedule I hereto, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or has been a party to a civil proceeding or a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violation of, or prohibiting or mandating activities subject to, Federal or State securities laws or finding any violation with respect to such laws.


Item 3.  Source and Amount of Funds or Other Consideration.

    On October 22, 2001, Schuler Homes entered into a Voting Agreement, dated as of October 22, 2001 (the "Voting Agreement") with certain stockholders of D.R. Horton No funds or consideration were involved in the Voting Agreement, except that the Voting Agreement was a condition for Schuler Homes to enter into the Merger Agreement (defined below).

    On October 22, 2001, D.R. Horton and Schuler Homes entered into an Agreement and Plan of Merger, dated as of October 22, 2001 (the "Merger Agreement"), pursuant to which, assuming the satisfaction or waiver of conditions to closing set forth therein, D.R. Horton will acquire Schuler Homes by means of a merger of Schuler Homes with and into D.R. Horton (the "Merger"), with D.R. Horton as the surviving corporation. Under the Merger Agreement, subject to the adjustments, elections and limitations described in the Merger Agreement, if the Merger is completed, each share of Schuler Homes' Class A and Class B common stock outstanding immediately prior to the effective time of the Merger will be converted into the right to receive a combination of cash and D.R. Horton's common stock or, at such stockholder's election and subject to the limitations and prorations stated in the Merger Agreement, cash or shares of D.R. Horton's common stock. In the Merger, Schuler Homes' stockholders will be entitled to receive $4.09 in cash plus a fraction of a share of D.R. Horton common stock equal to an exchange ratio based on the average price of D.R. Horton common stock. The aggregate amount of cash consideration is currently estimated to be approximately $166,321,000.


    The foregoing descriptions of the Voting Agreement and the Merger Agreement are qualified in their entirety by reference to such agreements, each of which have been filed as exhibits to this Schedule 13D and incorporated herein by reference.


Item 4.  Purpose of Transaction.

    The information set forth or incorporated by reference in Items 2 and 3 is hereby incorporated by reference.

    The purpose of the Voting Agreement is to facilitate the consummation of the transactions contemplated by the Merger Agreement. In order to approve and adopt the Merger Agreement, the affirmative vote of the holders of a majority of the outstanding shares of common stock of D.R. Horton is required. Under the Voting Agreement, certain stockholders of D.R. Horton (the "Horton Stockholders") agreed to vote their Subject Shares in favor the Merger and the Merger Agreement and against any proposal for action or agreement that would result in a breach of any covenant, representation or warranty or any other obligation or agreement of D.R. Horton under the Merger Agreement and against certain other proposals. Further, under the Voting Agreement, during the term of the Voting Agreement, the Horton Stockholders may not transfer, sell, assign, gift, pledge, hypothecate or dispose, whether directly or indirectly by contribution, distribution, dissolution or otherwise, any of the shares of D.R. Horton common stock subject to the Voting Agreement, except that the Horton Stockholders would be permitted to transfer shares of common stock to other Horton Stockholders who are subject to the Voting Agreement. The Voting Agreement provides that it will terminate on the earlier of (a) the effective time of the Merger, (b) termination of the Merger Agreement according to its terms or (c) the written mutual consent of the parties thereto.

    Upon consummation of the Merger, (a) the certificate of incorporation and the bylaws of the D.R. Horton will be the certificate of incorporation and bylaws of the surviving corporation, (b) the directors of D.R. Horton will be the directors of the surviving corporation and (c) the officers of D.R. Horton will be the officers of the surviving corporation. The Merger Agreement provides that D.R. Horton will use its best efforts to elect Mr. Schuler, current Co-Chairman of the Board, President and Chief Executive Officer of Schuler Homes, to the board of directors and, contemporaneous with the signing of the Merger Agreement, D.R. Horton entered into agreements with Mr. Schuler and Craig A. Manchester, Executive Vice President and Chief Operating Officer of Schuler Homes, providing that, upon consummation of the Merger, Mr. Schuler will become a Senior Vice President of D.R. Horton and President of its Schuler Homes region and Mr. Manchester will become a Vice President of D.R. Horton and Chief Operating Officer of its Schuler Homes region.

    Schuler Homes does not have any right to dispose of (or the direct the disposition of) the shares of D.R. Horton common stock subject to the Voting Agreement. Accordingly, Schuler Homes expressly disclaims beneficial ownership of all such shares.

    The foregoing description of the Voting Agreement is qualified in its entirety by reference to such agreement, which has been filed as an exhibit to this Schedule 13D and incorporated herein by reference.


Item 5.  Interest In Securities Of The Issuer.

    The information set forth or incorporated by reference in Items 2, 3 and 4 is hereby incorporated by reference.

    The aggregate number of shares of D.R. Horton common stock covered by the Voting Agreement is 12,271,993, representing approximately 16.0% of the shares of D.R. Horton common stock outstanding as of October 22, 2001, based on the representations of D.R. Horton contained in the Merger Agreement. The names and business addresses of the parties to the Voting Agreement and the number of outstanding shares of D.R. Horton common stock held by each such party (beneficially and of record) and subject to the Voting Agreement are also set forth on Schedule I thereto and are incorporated herein by reference. To the best of Schuler Homes' knowledge, during the last five years,


none of the parties to the Voting Agreement have been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or have been a party to any civil proceeding of a judicial or administrative body of competent jurisdiction that, as a result of such proceeding, subjected D.R. Horton to a judgment, decree or final order enjoining D.R. Horton from future violations of, or prohibiting or mandating activities subject to, Federal or State securities laws or finding any violations with respect to such laws.

    By virtue of the Voting Agreement Schuler Homes may be deemed to share with the Horton Stockholders the power to vote, and to have the power to restrict the Horton Stockholders' disposition of, the shares of D.R. Horton common stock subject to the Voting Agreement. Schuler Homes, however, is not entitled to any other rights as a stockholder of D.R. Horton as to the shares of D.R. Horton common stock covered by the Voting Agreement and expressly disclaims any beneficial ownership of the shares of D.R. Horton common stock subject to the Voting Agreement.

    Other than as set forth in this Schedule 13D, to the best knowledge of Schuler Homes, as of the date hereof, (i) neither Schuler Homes nor any subsidiary or affiliate of Schuler Homes nor any of Schuler Homes' executive officers or directors, beneficially owns any shares of D.R. Horton common stock and (ii) there have been no transactions in the shares of D.R. Horton common stock effected during the past 60 days by Schuler Homes, nor to the best of Schuler Homes' knowledge, by any subsidiary or affiliate of Schuler Homes or any of Schuler Homes' executive officers or directors.

    References to the Voting Agreement are qualified in its entirety by reference to such agreement, which has been filed as an exhibit to this Schedule 13D and incorporated herein by reference.


Item 6.  Contracts, Arrangements, Understandings or Relationships With Respect To Securities of the Issuer.

    Except as described elsewhere in this Schedule 13D, Schuler Homes has no other contract, arrangement, understanding or relationship (legal or otherwise) with any person with respect to any securities of D.R. Horton, including but not limited to transfer or voting of any of the securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies.


Item 7.  Materials to be Filed as Exhibits.

Exhibit 1   Agreement and Plan of Merger, dated as of October 22, 2001, between D.R. Horton, Inc. and Schuler Homes, Inc. (incorporated by reference from Exhibit 2.1 to Schuler Homes' Current Report on Form 8-K, dated as of October 22, 2001, filed with the Commission on October 24, 2001).

Exhibit 2

 

Voting Agreement, dated as of October 22, 2001, among the Reporting Person and certain stockholders of D.R. Horton who are signatories thereto.


SIGNATURE

    After reasonable inquiry and to the best of its knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct.

Dated: October 31, 2001   SCHULER HOMES, INC.

 

 

By:

 

/s/ 
THOMAS CONNELLY   
Name: Thomas Connelly
Title:
Senior Vice President and
Chief Financial Officer


SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF SCHULER HOMES, INC.

    The following table sets forth the name, business address and present principal occupation or employment of each director and executive officer of Schuler Homes, Inc.. Each such person is a U.S. citizen and the business address of each such person is 400 Continental Boulevard, Suite 100, El Segundo, California 90245.

Name and Title

  Present Principal Occupation

James K. Schuler
Co-Chairman of the Board,
President and Chief Executive
Officer
  Co-Chairman of the Board, President and Chief Executive Officer of Schuler Homes, Inc.

Eugene S. Rosenfeld
Co-Chairman of the Board

 

Co-Chairman of the Board of Schuler Homes, Inc. and Managing Partner of Highridge Partners, L.P.

Craig A. Manchester
Executive Vice President and Chief
Operating Officer

 

Executive Vice President and Chief Operating Officer of Schuler Homes, Inc.

Thomas Connelly
Senior Vice President and Chief
Financial Officer

 

Senior Vice President and Chief Financial Officer of Schuler Homes, Inc.

C. Evan Knapp
Senior Vice President—California
Homebuilding Operations

 

Senior Vice President—California Homebuilding Operations Schuler Homes, Inc.

Douglas Tonokawa
Vice President of Finance and Chief
Accounting Officer

 

Vice President of Finance and Chief Accounting Officer, Schuler Homes, Inc.

Kevin Conklin
Vice President of Finance

 

Vice President of Finance of Schuler Homes, Inc.

Lisa Frazier
Vice President and Financial
Controller

 

Vice President and Financial Controller

Pamela S. Jones
Director

 

On leave of absence from Schuler Homes, Inc.

Thomas A. Bevilacqua
Director

 

Chief Strategic Investment Officer of E*Trade Group, Inc.

Martin T. Hart
Director

 

Mr. Hart is a private investor who has owned and managed a number of companies

Ricardo Koenigsberger
Director

 

Partner of Apollo Real Estate Advisors, L.P.

Lee Neibart
Director

 

Partner of Apollo Real Estate Advisors, L.P.

Arnold Rosenstein
Director

 

Chairman of the Board of Directors of Meadowbrook Golf Group, Inc.

David M. Traversi
Director

 

President and Chief Executive Officer and a director of PRE Solutions, Inc. and a Managing Director of 2020 Growth Partners, LLC.

Raymond Wirta
Director

 

Chief Executive Officer and Director of CB Richard Ellis Services Inc.


EXHIBIT INDEX

Exhibit 1   Agreement and Plan of Merger, dated as of October 22, 2001, between D.R. Horton, Inc. and Schuler Homes, Inc. (incorporated by reference from Exhibit 2.1 to Schuler Homes' Current Report on Form 8-K, dated as of October 22, 2001, filed with the Commission on October 24, 2001).

Exhibit 2

 

Voting Agreement, dated as of October 22, 2001, among the Reporting Person and certain stockholders of D.R. Horton who are signatories thereto.



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SCHEDULE 13D (Rule 13d-101)
Item 1. Security and Issuer.
Item 2. Identity and Background.
Item 3. Source and Amount of Funds or Other Consideration.
Item 4. Purpose of Transaction.
Item 5. Interest In Securities Of The Issuer.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect To Securities of the Issuer.
Item 7. Materials to be Filed as Exhibits.
SIGNATURE
SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF SCHULER HOMES, INC.
EXHIBIT INDEX
EX-2 3 a2062377zex-2.htm EXHIBIT 2 Prepared by MERRILL CORPORATION
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EXHIBIT 2


VOTING AGREEMENT

    THIS VOTING AGREEMENT, dated as of October 22, 2001 (this "Agreement"), among SCHULER HOMES, INC., a Delaware corporation ("Schuler") and the record and beneficial stockholders of D.R. HORTON, INC., a Delaware corporation (the "Company"), whose names appear on Schedule I (collectively, the "Stockholders").

W I T N E S S E T H:

    WHEREAS, contemporaneously with the execution and delivery of this Agreement, Schuler and the Company are entering into an Agreement and Plan of Merger, dated as of the date hereof (the "Merger Agreement"), which provides for the merger (the "Merger") of Schuler with and into the Company and the conversion of all the outstanding shares of Class A Common Stock and Class B Common Stock, each with a par value of $.001 per share, of Schuler into cash and shares of common stock, par value $.01 per share (the "Company Shares"), of the Company;

    WHEREAS, as of the date hereof, each Stockholder owns (beneficially or of record) no less than the number of Company Shares set forth opposite such Stockholder's name on Schedule I (all such Company Shares and any Company Shares which may hereafter be acquired by such Stockholder prior to the termination of this Agreement, whether upon the exercise of options or by means of purchase, dividend, distribution or otherwise, (but not any other Company Shares owned by such Stockholder on the date hereof but not set forth opposite such Stockholder's name on Schedule I) being referred to herein as such Stockholder's "Subject Shares");

    WHEREAS, as a condition to their willingness to enter into the Merger Agreement, Schuler has required that the Stockholders enter into this Voting Agreement; and

    WHEREAS, in order to induce Schuler to enter into the Merger Agreement, the Stockholders are willing to enter into this Voting Agreement.

    NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, Schuler and each of the Stockholders, severally and not jointly, hereby agree as follows:


ARTICLE I.

TRANSFER AND VOTING OF SHARES;
AND OTHER COVENANTS OF THE STOCKHOLDERS

    SECTION 1.1. Voting of Shares. During the Term (as defined below), at any meeting of the stockholders of the Company, however called, and in any action by consent of the stockholders of the Company, each Stockholder (a) shall appear at such meeting of the stockholders or otherwise cause the Subject Shares such Stockholder owns beneficially or of record on the record date of any such meeting or solicitation of consents to be counted as present thereat for purposes of establishing a quorum and (b) shall vote its Subject Shares (i) in favor of the Merger and the Merger Agreement (as amended from time to time), (ii) against (A) any proposal for action or agreement that would result in a breach of any covenant, representation or warranty or any other obligation or agreement of the Company under the Merger Agreement or which is reasonably likely to result in any of the conditions of the Company's obligations under the Merger Agreement not being fulfilled and (B) any other action which could reasonably be expected to impede, interfere with, delay, postpone or materially adversely affect the transactions contemplated by the Merger Agreement or the likelihood of such transactions being consummated and (iii) in favor of any other matter necessary for consummation of the transactions contemplated by the Merger Agreement which is considered at any such meeting of stockholders or the subject of any such consent and in connection therewith to execute any documents which are necessary or appropriate in order to effectuate the foregoing.


    SECTION 1.2. No Inconsistent Arrangements. During the Term, except as contemplated by his Agreement and the Merger Agreement, no Stockholder shall (i) transfer (which term shall include any sale, assignment, gift, pledge, hypothecation or other disposition, whether directly or indirectly by contribution, distribution, dissolution or otherwise), or consent to any transfer of, any or all of such Stockholder's Subject Shares or any interest therein, or create or, except as set forth on Schedule 1.2, permit to exist any Encumbrance (as defined below) on such Subject Shares, (ii) enter into any contract, option or other agreement or understanding with respect to any transfer of any or all of such Subject Shares or any interest therein, (iii) grant any proxy, power-of-attorney or other authorization in or with respect to such Subject Shares, (iv) deposit such Subject Shares into a voting trust or enter into a voting agreement or arrangement with respect to such Subject Shares, or (v) take any other action that would in any way restrict, limit or interfere with the performance of its obligations hereunder or the transactions contemplated hereby or by the Merger Agreement. Notwithstanding the foregoing, Donald R. Horton shall be permitted to transfer Subject Shares to another Stockholder that is also a party to this Agreement.


ARTICLE II.

REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS

    Each Stockholder hereby represents and warrants to Schuler as follows:

    SECTION 2.1. Due Authorization, Enforceability. Such Stockholder has all requisite power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action on the part of Stockholder. This Agreement has been duly executed and delivered by or on behalf of such Stockholder and constitutes a legal, valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, moratorium or other similar laws and except that the availability of equitable remedies, including specific performance, is subject to the discretion of the court before which any proceeding for such remedy may be brought. There is no beneficiary or holder of a voting trust certificate or other interest of any trust of which such Stockholder is trustee whose consent is required for the execution and delivery of this Agreement or the consummation by such Stockholder of the transactions contemplated hereby.

    SECTION 2.2. No Conflicts; Required Filings and Consents.

    (a)
    The execution and delivery of this Agreement by such Stockholder does not, and the performance of this Agreement by such Stockholder will not, (i) conflict with or violate any trust agreement or other similar documents relating to any trust of which such Stockholder is trustee, (ii) conflict with or violate any law, rule, regulation, order, judgment or decree applicable to such Stockholder or by which such Stockholder or any of such Stockholder's properties is bound or affected or (iii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, acceleration or cancellation of, or result in the creation of a lien or encumbrance on any assets of such Stockholder, including such Stockholder's Subject Shares, pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which such Stockholder is a party or by which such Stockholder or any of such Stockholder's assets is bound or affected, except, in the case of clauses (ii) and (iii), for any such breaches, defaults or other occurrences that would not prevent or delay the performance by such Stockholder of such Stockholder's obligations under this Agreement.

2


    (b)
    The execution and delivery of this Agreement by such Stockholder does not, and the performance of this Agreement by such Stockholder will not, require any consent, approval, authorization or permit of, or filing with or notification to, any governmental or regulatory authority (other than any necessary filing under the Exchange Act), domestic or foreign, except where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not prevent or delay the performance by such Stockholder of such Stockholder's obligations under this Agreement.

    SECTION 2.3. Title to Shares. Such Stockholder is the sole record and beneficial owner of its Subject Shares, free and clear of any pledge, lien, security interest, mortgage, charge, claim, equity, option, proxy, voting restriction, voting trust or agreement, understanding, arrangement, right of first refusal, limitation on disposition, adverse claim of ownership or use or encumbrance of any kind ("Encumbrances"), other than as set forth on Schedule 1.2 and other than restrictions imposed by the securities laws or pursuant to this Agreement and the Merger Agreement. Such Stockholder has the sole right and power to vote and dispose of such Stockholder's Subject Shares.


ARTICLE III.

MISCELLANEOUS

    SECTION 3.1. Definitions. Terms used but not otherwise defined in this Agreement have the meanings ascribed to such terms in the Merger Agreement.

    SECTION 3.2. Termination. As used herein, "Term" means the period beginning on the date hereof and ending on the date this Agreement shall be terminated in accordance with its terms. This Agreement shall terminate and be of no further force and effect (i) by the written mutual consent of the parties hereto, (ii) upon termination of the Merger Agreement in accordance with its terms, or (iii) automatically and without any required action of the parties hereto upon the Effective Time. No such termination of this Agreement shall relieve any party hereto from any liability for any breach of this Agreement prior to termination.

    SECTION 3.3. Further Assurance. From time to time, at another party's request and without consideration, each party hereto shall execute and deliver such additional documents and take all such further action as may be necessary or desirable to consummate and make effective, in the most expeditious manner practicable, the transaction contemplated by this Agreement.

    SECTION 3.4. Certain Events. Each Stockholder agrees that this Agreement and such Stockholder's obligations hereunder shall attach to such Stockholder's Subject Shares and shall be binding upon any person or entity to which legal or beneficial ownership of such Subject Shares shall pass, whether by operation of law or otherwise, including such Stockholder's heirs, guardians, administrators, or successors. Notwithstanding any transfer of Subject Shares, the transferor shall remain liable for the performance of all its obligations under this Agreement.

    SECTION 3.5. No Waiver. The failure of any party hereto to exercise any right, power, or remedy provided under this agreement or otherwise available in respect hereof at law or in equity, or to insist upon compliance by any other party hereto with its obligations hereunder, any custom or practice of the parties at variance with the terms hereof shall not constitute a waiver by such party of its right to exercise any such or other right, power or remedy or to demand such compliance.

    SECTION 3.6. Specific Performance. Each Stockholder acknowledges that if such Stockholder fails to perform any of its obligations under this Agreement immediate and irreparable harm or injury would be caused to Schuler for which money damages would not be an adequate remedy. In such event, each Stockholder agrees that Schuler shall have the right, in addition to any other rights it may have, to specific performance of this Agreement. Accordingly, if Schuler should institute an action or proceeding seeking specific enforcement of the provisions hereof, each Stockholder hereby waives the

3


claim or defense that Schuler, as the case may be, has an adequate remedy at law and hereby agrees not to assert in any such action or proceeding the claim or defense that such a remedy at law exists. Each Stockholder further agrees to waive any requirements for the securing or posting of any bond in connection with obtaining any such equitable relief.

    SECTION 3.7. Fiduciary Duty. Nothing herein shall in any way affect any action by any director or executive officer of the Company that is required to be taken in order to discharge properly his fiduciary duties to the Company.

    SECTION 3.8. Notice. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given or made if and when delivered personally or by overnight courier to the parties at the following addresses or sent by electronic transmission, with confirmation received, to the telecopy numbers specified below (or at such other address or telecopy number for a party as shall be specified by like notice):

    (a)
    If to Schuler:

      Schuler Homes, Inc.
      400 Continental Blvd., Suite 100
      El Segundo, California 90245
      Facsimile: (310) 648-7207
      Telephone: (310) 648-7200
      Attention: James K. Schuler and Eugene S. Rosenfeld

    (b)
    If to a Stockholder, at the address set forth below such Stockholder's name on Schedule I.

    SECTION 3.9. Expenses. Except as otherwise expressly set forth herein, all fees, costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees, costs and expenses.

    SECTION 3.10. Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. When a reference is made in this Agreement to Sections or Schedules, such reference shall be to a section or schedule of this Agreement unless otherwise indicated. Wherever the words "includes," "include" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation."

    SECTION 3.11. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the maximum extent possible.

    SECTION 3.12. Entire Agreement; No Third-Party Beneficiaries. This Agreement constitutes the entire agreement and supersedes any and all other prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof, and this Agreement is not intended to confer upon any other person any rights or remedies hereunder.

    SECTION 3.13. Assignment. This Agreement shall not be assigned by operation of law or otherwise.

    SECTION 3.14. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware applicable to contracts executed in and to be performed entirely within that State.

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    SECTION 3.15. Jurisdiction. Each party hereby irrevocably submits to the exclusive jurisdiction of the Court of Chancery in the State of Delaware in any action, suit or proceeding arising in connection with this Agreement, and agrees that any such action, suit or proceeding shall be brought only in such court (and waives any objection based on forum non conveniens or any other objection to venue therein); provided, however, that such consent to jurisdiction is solely for the purpose referred to in this Section 3.15 and shall not be deemed to be a general submission to the jurisdiction of said Court or in the State of Delaware other than for such purposes. Each party hereto hereby waives any right to trial by jury in connection with any such action, suit or proceeding.

    SECTION 3.16. Amendment. This Agreement may not be amended except by an instrument in writing signed by the parties hereto.

    SECTION 3.17. Waiver. Any party hereto may (a) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (b) waive any inaccuracies in the representations and warranties of the other parties hereto contained herein or in any document delivered pursuant hereto and (c) waive compliance by the other parties hereto with any of their agreements or conditions contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only as against such party and only if set forth in an instrument in writing signed by such party. The failure of any party hereto to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights.

    SECTION 3.18. Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which shall constitute one and the same agreement.

    [SIGNATURES ON NEXT PAGE]

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    IN WITNESS WHEREOF, Schuler and the Stockholders have caused this Agreement to be executed as of the date first written above.

    SCHULER HOMES, INC.

 

 

By:

 

/s/ 
JAMES K. SCHULER   
    Name:   James K. Schuler
    Title:   Co-Chairman, President and Chief Executive Officer

 

 

STOCKHOLDERS:

 

 

/s/ Donald R. Horton

Donald R. Horton

 

 

DONALD RAY HORTON TRUST

 

 

By:

 

/s/ 
TERRILL J. HORTON   
Terrill J. Horton, Trustee

 

 

MARTHA ELIZABETH HORTON TRUST

 

 

By:

 

/s/ 
TERRILL J. HORTON   
Terrill J. Horton, Trustee

 

 

DONALD RYAN HORTON TRUST

 

 

By:

 

/s/ 
TERRILL J. HORTON   
Terrill J. Horton, Trustee

 

 

DOUGLAS REAGAN HORTON TRUST

 

 

By:

 

/s/ 
TERRILL J. HORTON   
Terrill J. Horton, Trustee

6



SCHEDULE I

Name and Address of Stockholder

  Total Number of Shares Owned of Record
  Subject Shares
Donald R. Horton
1901 Ascension Blvd., Suite 100
Arlington, Texas 76006
Fax: (817) 856-8259
Tel: (817) 856-8200
  8,956,406   8,956,406

Donald Ray Horton Trust
c/o Terrill J. Horton, Trustee
1901 Ascension Blvd., Suite 100
Arlington, Texas 76006
Fax: (817) 856-8259
Tel: (817) 856-8200

 

499,995

 

499,995

Martha Elizabeth Horton Trust
c/o Terrill J. Horton, Trustee
1901 Ascension Blvd., Suite 100
Arlington, Texas 76006
Fax: (817) 856-8259
Tel: (817) 856-8200

 

456,002

 

456,002

Donald Ryan Horton Trust
c/o Terrill J. Horton, Trustee
1901 Ascension Blvd., Suite 100
Arlington, Texas 76006
Fax: (817) 856-8259
Tel: (817) 856-8200

 

1,179,795

 

1,179,795

Douglas Reagan Horton Trust
c/o Terrill J. Horton, Trustee
1901 Ascension Blvd., Suite 100
Arlington, Texas 76006
Fax: (817) 856-8259
Tel: (817) 856-8200

 

1,179,795

 

1,179,795

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Name and Address of Stockholder

  Total Number of Shares Beneficially Owned
  Subject Shares
Donald R. Horton
1901 Ascension Blvd., Suite 100
Arlington, Texas 76006
Fax: (817) 856-8259
Tel: (817) 856-8200
  8,956,406   8,956,406

Donald Ray Horton Trust
c/o Terrill J. Horton, Trustee
1901 Ascension Blvd., Suite 100
Arlington, Texas 76006
Fax: (817) 856-8259
Tel: (817) 856-8200

 

499,995

 

499,995

Martha Elizabeth Horton Trust
c/o Terrill J. Horton, Trustee
1901 Ascension Blvd., Suite 100
Arlington, Texas 76006
Fax: (817) 856-8259
Tel: (817) 856-8200

 

456,002

 

456,002

Donald Ryan Horton Trust
c/o Terrill J. Horton, Trustee
1901 Ascension Blvd., Suite 100
Arlington, Texas 76006
Fax: (817) 856-8259
Tel: (817) 856-8200

 

1,179,795

 

1,179,795

Douglas Reagan Horton Trust
c/o Terrill J. Horton, Trustee
1901 Ascension Blvd., Suite 100
Arlington, Texas 76006
Fax: (817) 856-8259
Tel: (817) 856-8200

 

1,179,795

 

1,179,795

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SCHEDULE 1.2

None.

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QuickLinks

VOTING AGREEMENT
ARTICLE I. TRANSFER AND VOTING OF SHARES; AND OTHER COVENANTS OF THE STOCKHOLDERS
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
ARTICLE III. MISCELLANEOUS
SCHEDULE I
SCHEDULE 1.2