Exhibit 10.3
DEFERRED BONUS
AGREEMENT
2004 AWARD YEAR
THIS DEFERRED BONUS AGREEMENT (the
“Agreement”) is entered into as of May 9, 2005, by
Larry W. Seay (the “Executive”) and Meritage Homes
Corporation, a Maryland corporation (the
“Company”).
1.
PURPOSE .
The purpose of this Agreement is to
reward Executive for his service for the Company.
2.
COMPANY CONTRIBUTION .
The Company agrees to make a
“Company Contribution” of $47,000 to the Deferred Bonus
Account established pursuant to Section 3 effective as of December
31, 2004. The purpose of this Company Contribution is to
further compensate Executive for his many years of service to the
Company as a tool to retain the valuable services of the
Executive.
3.
DEFERRED COMPENSATION ACCOUNT .
The Company shall maintain a
bookkeeping account (the “Deferred Bonus Account”) to
which it shall credit the Company Contribution in accordance with
Section 2. Interest shall be credited to the Deferred
Bonus Account in accordance with Section 5, below. The
Deferred Compensation Account is a bookkeeping account only and
Executive shall not have any claim to any particular assets of the
Company.
4.
VESTING .
(a)
As of the date of this Agreement,
the Company Contribution credited to Executive’s Deferred
Bonus Account shall be unvested and subject to forfeiture on the
termination of Executive’s employment for any reason prior to
January 1, 2008. If Executive continues to be employed by the
Company on and through December 31, 2007, Executive shall be fully
vested in amounts credited to his Deferred Bonus Account and his
rights and interests therein shall not be forfeitable.
(b)
Not withstanding the previous
paragraph 4(a), if the Executive is terminated without
“cause”, upon a “change of control”, or
upon the “death” or “disability” or
Executive, (as defined in the Executive’s Employment
Agreement), all amounts due under this Agreement shall fully vest
and shall be payable within 30 days of the Executive’s
termination.
5.
INTEREST .
Each December 31, the Company shall
credit the Deferred Bonus Account with interest calculated at an
annual rate equal to 1.5% plus the prime rate as announced in the
Wall Street Journal on the first business day of each year
compounded annually (or, if no prime rate is announced in the
Wall Street Journal on such date, then on the first day of
each year in which
1
the prime rate is reported in the
Wall Street Journal ), or such other greater interest rate
as determined by the Company in its discretion.
6.
DISTRIBUTION OF BENEFITS.
(a) Distribution
of Benefits . Payment to Executive shall occur within thirty
(30) days of the effective date of Executive’s vesting in his
Deferred Bonus Account. For purposes of determining the
distributable amount, the Deferred Bonus Account shall be valued
through the day prior to the day on which the Deferred Bonus
Account is distributed, less any claim, debt, reimbursement,
recoupment, or offset the Company may have against
Executive.
(b) In-Service
Distributions . Executive shall have no right to borrow money
from his Deferred Bonus Account nor shall he be allowed to receive
a distribution except as provided above.
(c) Method of
Distribution . Distribution of benefits shall be made in one
cash lump sum.
7.
INALIENABILITY OF BENEFITS .
(a)
General Prohibition . Executive, nor creditors of Executive,
shall have any right to assign, pledge, hypothecate, anticipate or
in any way create a lien upon Executive’s interest created
under this Agreement. All payments to be made to Executive
shall be made only upon his personal receipt or endorsement, and no
interest under this Agreement shall be subject to assignment or
transfer or otherwise be alienable, either by voluntary or
involuntary act or by operation of law or equity, or subject to
attachment, execution, garnishment, sequestration, levy or other
seizure under any legal, equitable or other process, or be liable
in any way for the debts or defaults of Executive.
(b)
Permitted Arrangements . This Section shall not preclude arrangements for
the withholding of applicable taxes from payments under this
Agreement, or arrangements for direct deposit of benefit payments
to an account in a bank, savings and loan association or credit
union (provided that such arrangement is not part of an arrangement
constituting an assignment or alienation).
8.
BINDING NATURE OF AGREEMENT .
This Agreement shall be binding upon
the heirs, executors, administrators, successors and assigns of any
and all interested parties, present and future.
9.
NATURE OF PAYMENTS .
Executive s
