exv10w3
Exhibit 10.3
D.R. HORTON, INC.
Non-Qualified Stock Option Agreement
(Director — Term Vesting)
WHEREAS, (hereinafter called the “Participant”) is a director of D.R. Horton,
Inc., a Delaware corporation (hereinafter called the “Company”);
WHEREAS, the grant of Option Rights to the Participant effective (the “Date of
Grant”), and the execution of a Stock Option Agreement in the form hereof, has been duly authorized
by a resolution of the Board duly adopted on incorporated herein by reference; and
WHEREAS, the option granted hereby is intended to be a non-qualified stock option and shall
not be treated as an “incentive stock option” within the meaning of that term under Section 422A of
the Code.
NOW, THEREFORE, effective as of the Date of Grant the Company hereby grants to the Participant
a non-qualified option pursuant to the Company’s 2006 Stock Incentive Plan (the “Plan”) to purchase
shares
of Common Stock at the price of
Dollars ($ ) per share, and agrees
to cause certificates for any shares purchased hereunder to be delivered to the Participant upon
payment of the aggregate Option Price in full, all subject, however, to the terms and conditions
hereinafter set forth. Capitalized terms used in this Agreement that are not otherwise defined in
this Agreement are used as defined in the Plan.
1. (A) This option (until terminated as hereinafter provided) shall become exercisable as
follows:
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Time Period After |
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Number of Shares for |
Date of Grant |
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Which Option is Exercisable |
, 200X |
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, 200X |
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, 200X |
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, 200X |
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, 200X |
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Except as otherwise provided in paragraph 3, this option shall be exercisable only if the
Participant shall continuously remain a director of the Company from the date hereof until this
option is exercised. For the purposes of this paragraph, leaves of absence approved by the Board
for illness, disability, military or governmental service, or other cause, shall be considered as
continuing to serve as a director of the Company. To the extent exercisable, this option may be
exercised in whole or in part from time to time.
(B) Notwithstanding the provisions of subparagraph (A) of this paragraph 1, this option shall
be exercisable to the extent of 100% of the shares hereinabove specified upon the occurrence of any
Change in Control (as hereinafter defined) of the Company. For purposes of this Agreement, a
“Change in Control” means the occurrence of any of the following events:
(i) A merger, consolidation or reorganization of the Company into or with another
corporation or other legal person if the stockholders of the Company, immediately
before such merger, consolidation or reorganization, do not, immediately following
such merger, consolidation or reorganization, then own directly or indirectly, more
than 50% of the combined voting power of the then-outstanding voting securities of the
corporation or other legal person resulting from such merger, consolidation or
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reorganization in substantially the same proportion as their ownership of Voting
Securities (as hereinafter defined) immediately prior to such merger, consolidation or
reorganization;
(ii) The Company sells all or substantially all of its assets to another corporation
or other legal person, or there is a complete liquidation or dissolution of the
Company;
(iii) There is a report filed on Schedule 13D or Schedule 14D-1 (or any successor
schedule, form or report), each as promulgated pursuant to the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), disclosing that any person (as the term
“person” is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has
become the beneficial owner (as the term “beneficial owner” is defined under Rule
13d-3 or any successor rule or regulation promulgated under the Exchange Act) of
securities representing 20% or more of the combined voting power of the
then-outstanding voting securities of the Company (“Voting Securities”) (computed in
accordance with the standards for the computation of total percentage ownership for
the purposes of Schedule 13D or Schedule 14D-1 (or any successor schedule, form or
report)); or
(iv) The Company files a report or proxy statement with the Securities and Exchange
Commission pursuant to the Exchange Act disclosing in response to Form 8-K or Schedule
14A (or any successor schedule, form or report or item therein) that a change in
control of the Company has occurred or will occur in the future pursuant to any
then-existing contract or transaction.
Notwithstanding the provisions set forth in (iii) or (iv) above, a “Change in Control” shall
not be deemed to have occurred for purposes of this Agreement solely
because (i) the Company, (ii)
any Subsidiary, or (iii) any employee stock ownership plan or any other employee benefit plan of
the Company or any Subsidiary either files or becomes obligated to file a report or a proxy
statement under or in response to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any
successor schedule, form or report or item therein) under the Exchange Act disclosing beneficial
ownership by it of Voting Securities, whether in excess of 20% or otherwise, or because the
Company reports that a change in control of the Company has occurred or will occur in the future by
reason of such beneficial ownership. For purposes of calculating beneficial ownership pursuant
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to
this subparagraph (B), any Voting Securities held by Donald R. Horton as of the date hereof or
received by Donald R. Horton in connection with any merger involving the Company and any affiliate
of the Company shall not be included in the calculation of beneficial ownership.
(C) Notwithstanding the provisions of subparagraph (A) of this paragraph 1, this option shall
be exercisable to the extent of 100% of the shares hereinabove specified at the time the
Participant ceases to be a director of the Company upon the occurrence of the events described in
subparagraph (C) of paragraph 3.
2. The Option Price shall be payable (a) in cash or by check acceptable to the Company, (b) by
transfer to the Company of shares of Common Stock which have been owned by the Participant for more
than six months prior to the date of exercise and which have an aggregate Market Value per Share on
the date of exercise equal to the aggregate Option Price, or (c) by a combination of such methods of
payment.
3. This option shall terminate on the earliest of the following dates:
(A) Three months after Participant is no longer a director of the Company for any reason
except as provided in Subparagraph (B) or (C) below;
(B) Immediately upon the delivery to the Participant of notice of removal of the
Participant as a director of the Company;
(C) Two years after the death or permanent disability of the Participant if the
Participant dies or becomes permanently disabled while a director of the Company; and
(D) Ten years from the date on which this option was granted.
Except as otherwise provided in subparagraph (C) of paragraph 1, after the termination of the
Participant’s directorship this option shall be exercisable for the same number of shares for which
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it was exercisable prior to such termination. In the event that the Participant’s directorship
terminates on the same date that a Change in Control of the Company occurs, the Change in Control
will be deemed to have occurred prior to the termination of the Participant’s directorship.
4. This option is not transferable or exercisable except as provided in Paragraph 9 of the
Plan.
5. If the Company shall be required to withhold any federal, state, local or foreign tax in
connection with the exercise of this option, it shall be a condition to such exercise that the
Participant pay or make provision satisfactory to the Company for payment of all such taxes.
6. Upon each exercise of this option, the Company as promptly as practicable shall mail or
deliver to the Participant a stock certificate or certificates representing the shares then
purchased, and shall pay all stamp taxes payable in connection therewith. The issuance of such
shares and delivery of the certificate or certificates therefor shall, however, be subject to any
delay necessary to complete (a) the listing of such shares on any stock exchange upon which shares
of the same class are then listed, (b) such registration or qualification of such shares under any
state or federal law, rule or regulation as the Company may determine to be necessary or advisable,
and (c) the making of provision for the payment or withholding of any taxes required to be withheld
pursuant to any applicable law, in respect of the exercise of this option or the receipt of such
shares.
EXECUTED at Fort Worth, Texas this ___day of , 200X.
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The undersigned Participant hereby acknowledges receipt of an executed original of this
Non-Qualified Stock Option Agreement and accepts the stock option granted thereunder.
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