8-KLeadership ChangesExhibits & Filings

HORTON D R INC /DE/ 8-K Report, Executive Changes (Oct 6, 2010)

Filed October 6, 2010For Securities:DHI

Summary

This 8-K filing by D.R. Horton, Inc. (DHI) on October 6, 2010, details the adoption of new forms for Restricted Stock Unit (RSU) Agreements and Stock Award Agreements under its 2006 Stock Incentive Plan. These agreements allow the Compensation Committee to grant performance-based or service-based RSUs, and to award shares of common stock as payment for earned compensation. Of particular note, the Compensation Committee approved and granted performance-based RSUs (Performance RSUs) to two executive officers: Donald R. Horton and Donald J. Tomnitz. Each was granted 100,000 Performance RSUs, representing a contingent right to receive one share of common stock upon vesting. These awards are tied to a two-year performance period (October 1, 2010 - September 30, 2012) and are contingent on achieving specific performance goals in Total Shareholder Return (TSR), Return on Investment (ROI), Selling, General & Administrative expense containment (SG&A), and Gross Profit (GP), each weighted at 25%. The number of awarded shares can range from zero to 200,000 per executive based on the achievement of these goals. These specific grants do not carry dividend or voting rights.

Key Highlights

  • 1D.R. Horton adopted new forms for Restricted Stock Unit (RSU) and Stock Award Agreements under its 2006 Stock Incentive Plan.
  • 2The Compensation Committee granted 100,000 Performance RSUs each to Donald R. Horton (Chairman) and Donald J. Tomnitz (President and CEO).
  • 3The Performance RSUs have a two-year performance period from October 1, 2010, to September 30, 2012.
  • 4Vesting of Performance RSUs is tied to four equally weighted performance goals: relative Total Shareholder Return (TSR), relative Return on Investment (ROI), relative SG&A containment, and relative Gross Profit (GP).
  • 5The target number of 100,000 Performance RSUs per executive can be adjusted between zero and 200,000 based on the achievement of the performance goals.
  • 6Performance RSUs granted do not include dividend or voting rights.
  • 7The filing includes the forms of the RSU Agreement and Stock Award Agreement as exhibits.

Frequently Asked Questions

Performance RSUs are a form of equity compensation granted to executives that vest only if specific performance targets are met over a defined period. In this case, the Performance RSUs granted to Donald R. Horton and Donald J. Tomnitz will vest based on D.R. Horton's performance relative to the S&P 500 (for TSR) and a peer group (for ROI, SG&A, and GP) over a two-year period. If targets are met, executives receive shares of the company's common stock.

The performance goals are equally weighted at 25% each and include: relative Total Shareholder Return (TSR) compared to the S&P 500, relative Return on Investment (ROI) compared to a peer group, relative Selling, General & Administrative (SG&A) expense containment compared to a peer group, and relative Gross Profit (GP) compared to a peer group.

Yes, the number of Performance RSUs that vest can vary. The target award is 100,000 units per executive. This number can increase to a maximum of 200,000 units per executive if all performance goals are maximally achieved, or decrease to a minimum of zero units if performance is insufficient.

No, the Performance RSUs granted to Donald R. Horton and Donald J. Tomnitz do not carry dividend or voting rights. These rights only become applicable if and when the RSUs vest and are converted into shares of the Company's common stock.