8-KLeadership ChangesMaterial AgreementsExhibits & Filings

HORTON D R INC /DE/ 8-K Report, Material Agreement (Feb 15, 2008)

Filed February 15, 2008For Securities:DHI

Summary

D.R. Horton, Inc. (DHI) filed this Form 8-K on February 15, 2008, primarily to report on the adoption of new compensation arrangements and awards for its executives. The company introduced a new 2008 Performance Unit Plan, under which key executives, including Chairman Donald R. Horton and President & CEO Donald J. Tomnitz, received grants of long-term performance units. The payout for these units is contingent upon the company's relative Return on Investment (ROI) and Net Sales Gains Percentage (NSG%) performance compared to its industry peers over a defined period ending September 30, 2010. Additionally, D.R. Horton updated its stock option agreements to allow for net exercise or stock surrender to cover exercise prices and withholding taxes, a potentially beneficial feature for executives in certain market conditions. New stock options were also granted to executive officers on February 11, 2008, with exercise prices set at the then-current market value of $14.50 per share. These actions signal a focus on executive retention and performance-based incentives within the company's compensation structure.

Key Highlights

  • 1D.R. Horton adopted a new 2008 Performance Unit Plan and granted long-term performance units to executives on February 11, 2008.
  • 2The payout for these Performance Units is tied to the company's relative ROI and NSG% performance against a peer group over a period ending September 30, 2010.
  • 3Chairman Donald R. Horton received 300,000 Performance Units, and President & CEO Donald J. Tomnitz received 200,000 units.
  • 4The company updated stock option agreements to allow for net exercise or stock surrender to satisfy exercise price and tax withholding obligations.
  • 5New non-qualified stock options were granted to executive officers on February 11, 2008, at an exercise price of $14.50 per share.
  • 6Vesting periods for new stock options vary, with longer periods for Executive Vice Presidents Bill W. Wheat and Stacey H. Dwyer.

Frequently Asked Questions

This 8-K filing is primarily to report on the adoption of new compensation plans and the granting of awards to D.R. Horton's executives. Specifically, it details the new 2008 Performance Unit Plan, awards granted under this plan, and amendments to stock option agreements.

The final payout value of the Performance Units will be determined after the performance period (January 1, 2008, to September 30, 2010). The number of units can be adjusted upward to 200% or downward to 0% based on the company's relative ROI and Net Sales Gains Percentage compared to its peers. The adjusted number of units will then be multiplied by the stock's closing price on September 30, 2010. The payout may be in cash, equity, or a combination.

New forms of non-qualified stock option agreements were adopted that allow participants, under certain circumstances, to exercise options and satisfy the exercise price and withholding taxes through a net exercise or net issuance provision, or a stock surrender provision. This offers more flexibility for executives in managing their option grants.

Yes, on February 11, 2008, new non-qualified stock options were granted to executive officers. The exercise price for these options was set at $14.50 per share, which was the closing price of D.R. Horton's common stock on the NYSE on the date of the grant.