<SUBMISSION>
<ACCESSION-NUMBER>0001047469-08-003906
<TYPE>DEF 14A
<PUBLIC-DOCUMENT-COUNT>5
<PERIOD>20080515
<FILING-DATE>20080401
<DATE-OF-FILING-DATE-CHANGE>20080401
<EFFECTIVENESS-DATE>20080401
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>Meritage Homes CORP
<CIK>0000833079
<ASSIGNED-SIC>1531
<IRS-NUMBER>860611231
<STATE-OF-INCORPORATION>MD
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>DEF 14A
<ACT>34
<FILE-NUMBER>001-09977
<FILM-NUMBER>08727693
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>8501 E. PRINCESS DRIVE
<STREET2>STE 290
<CITY>SCOTTSDALE
<STATE>AZ
<ZIP>85255
<PHONE>4802222444
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>8501 E. PRINCESS DRIVE
<STREET2>SUITE 290
<CITY>SCOTTSDALE
<STATE>AZ
<ZIP>85255
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>MERITAGE CORP
<DATE-CHANGED>19981009
</FORMER-COMPANY>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>MONTEREY HOMES CORP
<DATE-CHANGED>19970113
</FORMER-COMPANY>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>HOMEPLEX MORTGAGE INVESTMENTS CORP
<DATE-CHANGED>19920703
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>a2184391zdef14a.htm
<DESCRIPTION>DEF 14A
<TEXT>
<HTML>
<HEAD>
</HEAD>
<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
<BR>
<FONT SIZE=3 ><A HREF="#08ZAH77301_1">QuickLinks</A></FONT>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>


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 </FONT> <FONT SIZE=2><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>
Washington, D.C. 20549  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B> SCHEDULE 14A</B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>Proxy
Statement Pursuant to Section 14(a) of<BR>
the Securities Exchange Act of 1934 (Amendment No.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;) </FONT></P>




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<TABLE WIDTH="73%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2>Filed by the Registrant <FONT FACE="WINGDINGS">&#253;</FONT></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3 style="font-family:times;"><BR><FONT SIZE=2>Filed by a Party other than the Registrant <FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2><BR>
Check the appropriate box:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="95%" style="font-family:times;"><FONT SIZE=2><BR>
Preliminary Proxy Statement</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="95%" style="font-family:times;"><BR><FONT SIZE=2><B>Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>
<FONT FACE="WINGDINGS">&#253;</FONT></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="95%" style="font-family:times;"><FONT SIZE=2><BR>
Definitive Proxy Statement</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="95%" style="font-family:times;"><FONT SIZE=2><BR>
Definitive Additional Materials</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="95%" style="font-family:times;"><FONT SIZE=2><BR>
Soliciting Material Pursuant to &sect;240.14a-12<BR></FONT>
</TD>
</TR>
</TABLE>

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<TABLE WIDTH="77%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
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<TD COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2><B>Meritage Homes Corporation</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><HR NOSHADE><FONT SIZE=2> (Name of Registrant as Specified In Its Charter)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><BR><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><HR NOSHADE><FONT SIZE=2> (Name of Person(s) Filing Proxy Statement, if other than the Registrant)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="89%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5 style="font-family:times;"><FONT SIZE=2>Payment of Filing Fee (Check the appropriate box):</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>
<FONT FACE="WINGDINGS">&#253;</FONT></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2><BR>
No fee required.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2><BR>
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and&nbsp;0-11.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=2>(1)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="89%" style="font-family:times;"><FONT SIZE=2>Title of each class of securities to which transaction applies:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=2>(2)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="89%" style="font-family:times;"><FONT SIZE=2>Aggregate number of securities to which transaction applies:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=2>(3)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="89%" style="font-family:times;"><FONT SIZE=2>Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=2>(4)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="89%" style="font-family:times;"><FONT SIZE=2>Proposed maximum aggregate value of transaction:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=2>(5)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="89%" style="font-family:times;"><FONT SIZE=2>Total fee paid:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2><BR>
Fee paid previously with preliminary materials.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2><BR>
Check box if any part of the fee is offset as provided by Exchange Act Rule&nbsp;0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=2><BR>
(1)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="89%" style="font-family:times;"><FONT SIZE=2><BR>
Amount Previously Paid:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=2>(2)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="89%" style="font-family:times;"><FONT SIZE=2>Form, Schedule or Registration Statement No.:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=2>(3)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="89%" style="font-family:times;"><FONT SIZE=2>Filing Party:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=2>(4)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="89%" style="font-family:times;"><FONT SIZE=2>Date Filed:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
</TABLE>
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<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=1,EFW="2184391",CP="MERITAGE HOMES CORP.",DN="1",CHK=930961,FOLIO='blank',FILE='DISK133:[08ZAH1.08ZAH77301]BA77301A.;4',USER='RKING',CD='31-MAR-2008;10:07' -->
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>


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 </FONT> <FONT SIZE=2><B>
<IMG SRC="g264329.jpg" ALT="GRAPHIC" WIDTH="387" HEIGHT="90">
  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>Dear
Stockholders: </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
are cordially invited to join us for our 2008 annual meeting of stockholders, which will be held on Thursday, May&nbsp;15, 2008, at 10:00&nbsp;a.m. local time at the Scottsdale
Marriott at McDowell Mountains, 16770 North Perimeter Drive, Scottsdale, Arizona 85260. Holders of record of our common stock as of March&nbsp;31, 2008, are entitled to notice of and to vote at the
2008 annual meeting. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Notice of Annual Meeting of Stockholders and the proxy statement that follow describe the business to be conducted at the meeting. We will also report on matters of current interest
to our stockholders. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
hope you will be able to attend the meeting. However, even if you plan to attend, please vote your shares promptly to ensure they are represented at the meeting. You may submit your
proxy by Internet or telephone, as described in the following materials, or by completing and signing the enclosed proxy card and returning it in the envelope provided. If you decide to attend the
meeting and wish to change your proxy, you may do so automatically by voting in person at the meeting. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
your shares are held in the name of a broker, bank, trust or other nominee, you may be asked for proof of ownership to be admitted to the meeting. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
look forward to seeing you at the annual meeting. </FONT></P>

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<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="49%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="49%" style="font-family:times;"><FONT SIZE=2>Sincerely,</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="49%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="49%" style="font-family:times;"><BR><FONT SIZE=2><B>
<IMG SRC="g25233.jpg" ALT="GRAPHIC" WIDTH="186" HEIGHT="79">
 </B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="49%" style="font-family:times;"><FONT SIZE=2>Steven J. Hilton<BR>
Chairman and Chief Executive Officer</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>17851
North 85<SUP>th</SUP>&nbsp;Street&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;Suite&nbsp;300&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;Scottsdale, Arizona
&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;85255&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;Phone 480-515-8100 </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><I>Listed on the New York Stock Exchange &#150; MTH</I></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=2,EFW="2184391",CP="MERITAGE HOMES CORP.",DN="1",CHK=680859,FOLIO='blank',FILE='DISK133:[08ZAH1.08ZAH77301]BC77301A.;11',USER='RKING',CD='31-MAR-2008;10:16' -->
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 </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>
<IMG SRC="g586208.jpg" ALT="GRAPHIC" WIDTH="387" HEIGHT="90">
  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="be77301_notice_of_annual_meeting_of_stockholders"> </A>
<A NAME="toc_be77301_1"> </A>
<BR></FONT><FONT SIZE=2><B>NOTICE OF ANNUAL MEETING OF STOCKHOLDERS    <BR>    </B></FONT></P>

<HR NOSHADE ALIGN="CENTER" WIDTH="120">
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>Date: Thursday, May&nbsp;15, 2008<BR>
Time: 10:00&nbsp;a.m. local time  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>Scottsdale Marriott at McDowell Mountains<BR>
16770 North Perimeter Drive<BR>
Scottsdale, Arizona 85260  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>To
Our Stockholders: </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
are invited to attend the Meritage Homes Corporation 2008 Annual Meeting of Stockholders for the following purposes: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>1.</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>To
elect three Class&nbsp;I Directors, each to hold office until our 2010 annual meeting,
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>2.</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>To
ratify the selection of Deloitte&nbsp;&amp; Touche&nbsp;LLP as the Company's independent registered public accounting firm for the 2008 fiscal year,
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>3.</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>To
approve an amendment to our 2006 Stock Incentive Plan to increase shares available for issuance,
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>4.</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>To
approve an amendment to our 2006 Stock Incentive Plan to increase the annual maximum granting limits to a participant,
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>5.</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>To
approve an amendment to our Articles of Incorporation to authorize preferred stock, and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>6.</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>To
conduct any other business that may properly come before the meeting or any adjournment of postponement thereof. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These
items are more fully described in the accompanying proxy. Only stockholders of record at the close of business on March&nbsp;31, 2008 are entitled to notice of, and to vote at,
the annual meeting or any adjournment or postponement thereof. A copy of our 2007 Annual Report to Stockholders, which includes our audited consolidated financial statements, is enclosed. </FONT></P>

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<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="49%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="49%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%" style="font-family:times;"><FONT SIZE=2>By Order of the Board of Directors,</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="49%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%" style="font-family:times;"><BR><FONT SIZE=2><B>
<IMG SRC="g257477.jpg" ALT="GRAPHIC" WIDTH="267" HEIGHT="82">
 </B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="49%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%" style="font-family:times;"><FONT SIZE=2><BR>
C. Timothy White, Secretary</FONT></TD>
</TR>
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<P style="font-family:times;"><FONT SIZE=2>


Scottsdale, Arizona<BR>
April&nbsp;1, 2008

 </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE SUBMIT YOUR PROXY BY SIGNING AND DATING THE ENCLOSED PROXY CARD AND RETURNING IT IN THE ENVELOPE
PROVIDED. YOU MAY ALSO VOTE YOUR SHARES AND SUBMIT A PROXY BY USING THE INTERNET OR TELEPHONE AS DESCRIBED ON THE PROXY CARD.</B></FONT></P>

<P style="font-family:times;">


<FONT SIZE=2><B>IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY&nbsp;15, 2008&#151;THIS PROXY STATEMENT AND
MERITAGE'S&nbsp;2007&nbsp;ANNUAL REPORT TO STOCKHOLDERS ARE AVAILABLE AT </B></FONT><FONT SIZE=2><B><I>WWW.MERITAGEHOMES.COM.</I></B></FONT>

</P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>MERITAGE HOMES CORPORATION<BR>  </B></FONT><FONT SIZE=2>17851 NORTH 85<SUP>TH</SUP> STREET<BR>
SUITE 300<BR>
SCOTTSDALE, ARIZONA 85255<BR></FONT> <FONT SIZE=2><I>www.meritagehomes.com</I></FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="bf77301_proxy_statement"> </A>
<A NAME="toc_bf77301_1"> </A>
<BR></FONT><FONT SIZE=2><B>PROXY STATEMENT    <BR>    </B></FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
proxy statement is furnished to you in connection with the solicitation of proxies by the Board of Directors of Meritage Homes Corporation to be used in voting at our Annual Meeting
of Stockholders on May&nbsp;15, 2008. The meeting will be held at 10:00&nbsp;a.m. local time at the Scottsdale Marriott at McDowell Mountains, 16770 North Perimeter Drive, Scottsdale, Arizona
85260. The proxy materials relating to the annual meeting, together with our 2007 Annual Report to Stockholders (which includes audited consolidated financial statements for our fiscal year ended
December&nbsp;31, 2007), were mailed on or about April&nbsp;7, 2008 to stockholders of record at the close of business on March&nbsp;31, 2008 (the "record date"). </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
you submit a proxy, you are entitled to revoke your proxy at any time before it is exercised by attending the annual meeting and voting in person, duly executing and delivering a
proxy bearing a later date, or sending written notice of revocation to our Corporate Secretary at the Company's address located at the top of this page. Whether or not you plan to be present at the
annual meeting, we encourage you to sign and return the enclosed proxy card or to provide your proxy over the telephone or via the Internet. Refer to your proxy card for instructions about submitting
a proxy by telephone, Internet and mail. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Meritage Board of Directors is soliciting proxies.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We will bear the entire cost of proxy solicitation, including charges
and expenses of brokerage firms and others for forwarding solicitation material to beneficial owners of our outstanding common stock. We may solicit proxies through the mail, by
personal interview or telephone, including through the use of a third party proxy solicitor. If we use a proxy solicitor, we estimate the cost will be approximately $9,500. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following information should be reviewed along with the audited consolidated financial statements, notes to consolidated financial statements, report of independent registered public
accounting firm and other information included in our 2007 Annual Report to Stockholders that was mailed to you along with this proxy statement. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information
about our company and communities is provided on our Internet website at </FONT><FONT SIZE=2><I>www.meritagehomes.com</I></FONT><FONT SIZE=2>. Our periodic and current
reports, including any amendments, filed or furnished pursuant to section&nbsp;13(a) or 15(d) of the Securities Exchange Act of 1934 as amended (the "Exchange Act"), are available, free of charge,
on our website as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission ("SEC"). The information contained on our website is
not considered part of our Annual Report on Form&nbsp;10-K or this proxy statement. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Meritage
operates within a comprehensive plan of corporate governance for the purpose of defining responsibilities and setting high standards for ethical conduct. Our Board of Directors
has established an audit committee, executive compensation committee and nominating/governance committee. The charter of each of these committees is available on our website, along with our Code of
Ethics and our Corporate Governance Principles and Practices. Our committee charters, Code of Ethics and Corporate Governance Principles and Practices are also available in print, free of charge, to
any stockholder who requests them by calling us or by writing to us at our principal executive offices at the following address: Meritage Homes Corporation, 17851 North
85<SUP>th</SUP>&nbsp;Street, Suite&nbsp;300, Scottsdale, Arizona 85255, Attention: Legal Department. Our telephone number is (480)&nbsp;515-8100. </FONT></P>

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<BR></FONT><FONT SIZE=2><B>VOTING SECURITIES OUTSTANDING    <BR>    </B></FONT></P>

<P style="font-family:times;">


<FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On the record date, there were 26,388,494 shares of Meritage common stock outstanding. The common stock is our only outstanding class of voting securities. Each
share is entitled to one vote on each proposal to be voted on at the annual meeting. Only holders of record of common stock at the close of business on the record date will be permitted to vote at the
meeting, either in person or by valid proxy.

</FONT>

</P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
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<A NAME="toc_bf77301_3"> </A>
<BR></FONT><FONT SIZE=2><B>VOTING PROXIES    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares of common stock represented by properly executed proxy cards received by the Company in time for the meeting will be voted in accordance with the
instructions specified in the proxies. If you submit a proxy but do not indicate any voting instructions, your shares will be voted </FONT><FONT SIZE=2><B>FOR</B></FONT><FONT SIZE=2> the election as
directors of the nominees named in this proxy statement, </FONT><FONT SIZE=2><B>FOR</B></FONT><FONT SIZE=2> the ratification of the selection of Deloitte&nbsp;&amp; Touche as the Company's independent
registered public accounting firm, </FONT><FONT SIZE=2><B>FOR</B></FONT><FONT SIZE=2> the amendments to the 2006 Stock Incentive Plan and </FONT><FONT SIZE=2><B>FOR</B></FONT><FONT SIZE=2> the
amendment to our charter to authorize Preferred Stock. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
your shares are held in a brokerage account or by another nominee, you are considered the "beneficial owner" of shares held in "street name", and these proxy materials are being
forwarded to you by your broker or nominee (the "record holder") along with a voting instruction card. As the beneficial owner, you have the right to direct your record holder regarding how to vote
your shares, and the record holder is required to vote your shares in accordance with your instructions. If you do not give instructions to your record holder prior to the meeting, the record holder
will be entitled to vote your shares in its discretion on Proposal 1 (Election of Directors) and Proposal 2 (Ratification of Independent Registered Public Accounting Firm), but will not be able to
vote your shares on Proposals&nbsp;3 and 4 (Approval of Amendments to the 2006 Stock Incentive Plan) or Proposal 5 (Approval of Authorization of Preferred Stock), and your shares will be counted as
a "broker non-vote" on those proposals. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
the beneficial owner of shares, you are invited to attend the annual meeting. Please note, however, that if you are a beneficial owner, you may not vote your shares in person at the
meeting unless you obtain a "legal proxy" from the record holder that holds your shares. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rules
of the New York Stock Exchange (the "NYSE") determine whether proposals presented at stockholder meetings are "routine" or "non-routine." If a proposal is routine, a
broker or other entity holding shares for an owner in street name may vote on the proposal without voting instructions from the owner. If a proposal is non-routine, the broker or other
entity may vote on the proposal only if the owner has provided voting instructions. A "broker non-vote" occurs when the broker or other entity is unable to vote on a proposal because the
proposal is non-routine and the owner does not provide instructions. As a result, brokers or other entities holding shares for an owner in street name may vote on routine proposals even if
no voting instructions are provided by the owner. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
management and Board of Directors of the Company know of no other matters to be brought before the meeting. If other matters are properly presented to the stockholders for action at
the meeting or any adjournments or postponements thereof, it is the intention of the proxy holders named in the proxy to vote in their discretion on all matters on which the shares of common stock
represented by such proxy are entitled to vote. </FONT></P>

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<A NAME="toc_bg77301_1"> </A>
<BR></FONT><FONT SIZE=2><B>TABLE OF CONTENTS    <BR>    </B></FONT></P>

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<TH WIDTH="92%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="5%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Page</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="92%" style="font-family:times;"><FONT SIZE=2>Summary</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>2</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="92%" style="font-family:times;"><FONT SIZE=2><BR>
Election Of Directors (Proposal No.&nbsp;1)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
6</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="92%" style="font-family:times;"><FONT SIZE=2><BR>
Ratification Of Independent Registered Public Accounting Firm (Proposal No.&nbsp;2)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
7</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="92%" style="font-family:times;"><FONT SIZE=2><BR>
Information Relating to Proposals No.&nbsp;3 and 4</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
8</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="92%" style="font-family:times;"><FONT SIZE=2><BR>
Proposal to Approve Authorization of Preferred Stock (Proposal No.&nbsp;5)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
14</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="92%" style="font-family:times;"><FONT SIZE=2><BR>
Security Ownership By Management And Principal Stockholders</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
17</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="92%" style="font-family:times;"><FONT SIZE=2><BR>
Corporate Governance Principles And Board Matters</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
19</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="92%" style="font-family:times;"><FONT SIZE=2><BR>
Continuing Director Information</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
25</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="92%" style="font-family:times;"><FONT SIZE=2><BR>
Compensation Discussion And Analysis</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
26</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="92%" style="font-family:times;"><FONT SIZE=2><BR>
Director Compensation</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
47</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="92%" style="font-family:times;"><FONT SIZE=2><BR>
Executive Compensation Committee Report</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
48</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="92%" style="font-family:times;"><FONT SIZE=2><BR>
Securities Authorized For Issuance Under Equity Compensation Plans</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
49</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="92%" style="font-family:times;"><FONT SIZE=2><BR>
Section&nbsp;16(a) Beneficial Ownership Reporting Compliance</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
50</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="92%" style="font-family:times;"><FONT SIZE=2><BR>
Certain Relationships And Related Transactions</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
50</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="92%" style="font-family:times;"><FONT SIZE=2><BR>
Independent Auditors</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
51</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="92%" style="font-family:times;"><FONT SIZE=2><BR>
Report Of The Audit Committee</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
52</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="92%" style="font-family:times;"><FONT SIZE=2><BR>
Stockholder Proposals</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
53</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="92%" style="font-family:times;"><FONT SIZE=2><BR>
Other Matters</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
53</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="92%" style="font-family:times;"><FONT SIZE=2><BR>
Electronic Delivery Of Future Annual Meeting Materials</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
54</FONT></TD>
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<BR></FONT><FONT SIZE=2><B>SUMMARY    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This summary highlights selected information from this proxy statement and may not contain all of the information that is important to you. To understand the
proposals fully, you should carefully read this entire proxy statement. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I>General Information  </I></B></FONT></P>

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<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2>Date, Time and Place of Meeting</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="60%" style="font-family:times;"><FONT SIZE=2>The annual meeting will be held on Thursday, May&nbsp;15, 2008 at 10:00&nbsp;a.m. local time at the Scottsdale Marriott at McDowell Mountains, 16770 North Perimeter Drive, Scottsdale, Arizona 85260.</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2><BR>
Record Date</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%" style="font-family:times;"><FONT SIZE=2><BR>
The record date for the annual meeting is March&nbsp;31, 2008. Stockholders who hold shares of our stock at the close of business on the record date will be entitled to vote on the matters proposed in this proxy statement.</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2><BR>
Voting Information</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%" style="font-family:times;"><FONT SIZE=2><BR>
You can vote in person at the annual meeting or submit a proxy to have your shares represented without attending the annual meeting. The shares represented by a properly executed proxy will be voted as you direct. To submit a proxy, you must fill out
your proxy card and return it by mail, call the telephone number and follow the instructions on your proxy card or follow the instructions on your proxy card to submit your proxy via the Internet.</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%" style="font-family:times;"><FONT SIZE=2><BR>
You can revoke your proxy any time before it is voted by written notice delivered to the Company's Secretary, by timely delivery of a later signed proxy (including via the Internet or telephone), or by voting in person at the annual meeting.
Attendance at the meeting alone is not sufficient to revoke your proxy. You must also vote your shares to revoke your proxy.</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2><BR>
Quorum</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%" style="font-family:times;"><FONT SIZE=2><BR>
The presence in person or by proxy of stockholders entitled to cast a majority of the votes entitled to be cast at the meeting is necessary to constitute a quorum at the meeting. Abstentions and broker non-votes are counted as present and entitled to
vote for purposes of determining whether a quorum exits.</FONT></TD>
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<P style="font-family:times;"><FONT SIZE=2><B><I>The Proposals  </I></B></FONT></P>

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<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2>Election of Directors (page&nbsp;6)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="60%" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>Steven J. Hilton, Raymond Oppel and Richard T. Burke, Sr., each of whom is presently serving as a Class&nbsp;I Director, are nominated for re-election.</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%" VALIGN="BOTTOM" style="font-family:times;"><BR><FONT SIZE=2><B>The Board of Directors recommends a vote "for" each of these directors.</B></FONT><FONT SIZE=2> If a quorum is present, the three nominees who receive the most votes will be elected. Broker
non-votes and votes that are withheld have no legal effect. Please vote on this matter.</FONT></TD>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>2</FONT></P>

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Ratification of Auditor (page&nbsp;7)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
Ratify the selection of Deloitte&nbsp;&amp; Touche&nbsp;LLP as the Company's independent registered public accounting firm for the 2008 fiscal year.</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%" VALIGN="BOTTOM" style="font-family:times;"><BR><FONT SIZE=2><B>The Board of Directors recommends a vote "for" this proposal.</B></FONT><FONT SIZE=2> An affirmative vote of the majority of the shares present at the annual meeting is required to ratify the
selection of Deloitte&nbsp;&amp; Touche&nbsp;LLP as the Company's independent auditor. Broker non-votes and votes that are withheld have no legal effect. Please vote on this matter. If the appointment is not approved by the stockholders, the adverse
vote will be considered a direction to the Audit Committee to consider other auditors for next year. However, because of the difficulty in making any substitution of auditors so long after the beginning of the current year, the appointment in 2008
will stand, unless the Audit Committee finds other good reason for making a change.</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2><BR>
Approval of an Amendment to the 2006 Stock Incentive Plan to Increase the Number of Shares Available (page&nbsp;8)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
Under the 2006 Stock Incentive Plan, the Company's executives, officers, employees, non-employee directors, consultants and advisors are eligible to receive awards of stock options, stock appreciation rights, restricted stock awards, performance
share awards and performance based awards. We are asking for your approval of two amendments to the 2006 Stock Incentive Plan. Each proposal is independent of, and not conditioned upon, approval of the other. The first amendment will increase the
number of shares available under the Plan. We are asking for you to approve this amendment because the Board has determined that increasing the number of shares available for grant generally under the plan is necessary to be able to grant additional
equity awards in order to continue to retain and motivate key employees in the current difficult homebuilding environment.</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%" VALIGN="BOTTOM" style="font-family:times;"><BR><FONT SIZE=2><B>The Board of Directors has approved this amendment to the plan and recommends a vote "for" this proposal.</B></FONT><FONT SIZE=2> The affirmative vote of a majority of the votes cast on the proposal
is required for approval of this amendment to the 2006 Stock Incentive Plan, provided that the total vote cast on the proposal represents over 50% in interest of all securities entitled to vote on the proposal. For purposes of the vote on this
amendment, abstentions will have the same effect as votes against the proposal and broker non-votes will have the same effect as votes against the proposal, unless holders of more than 50% in interest of all securities entitled to vote on the
proposal cast votes, in which event broker non-votes will not have any effect on the result of the vote.</FONT></TD>
</TR>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>3</FONT></P>

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Approval of an Amendment to the 2006 Stock Incentive Plan to Increase the Annual Limit on the Amount that can be Granted to any One Individual (page&nbsp;8)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
We are also asking for your approval of an amendment to the 2006 Stock Incentive Plan to change the maximum number of shares with respect to one or more awards that can be granted to a participant during a single year. The Board has determined that
increasing the amount subject to the annual grant limitation is appropriate in order to retain and motivate key employees in the current difficult homebuilding environment.</FONT></TD>
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<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
We note that our equity grants are within guidelines established for our industry and similarly-sized companies by major stockholder advocate groups.</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%" VALIGN="BOTTOM" style="font-family:times;"><BR><FONT SIZE=2><B>The Board of Directors has approved this amendment to the plan and recommends a vote "for" this proposal.</B></FONT><FONT SIZE=2> The affirmative vote of a majority of the votes cast on the proposal
is required for approval of this amendment to the 2006 Stock Incentive Plan, provided that the total vote cast on the proposal represents over 50% in interest of all securities entitled to vote on the proposal. For purposes of the vote on this
amendment, abstentions will have the same effect as votes against the proposal and broker non-votes will have the same effect as votes against the proposal, unless holders of more than 50% in interest of all securities entitled to vote on the
proposal cast votes, in which event broker non-votes will not have any effect on the result of the vote.</FONT></TD>
</TR>
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<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2><BR>
Amendment to Charter to Authorize Preferred Stock (page&nbsp;14)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
Our last proposal asks you to approve an amendment to our charter that would increase the number of shares of capital stock the Company is authorized to issue from 125,000,000 to 135,000,000 by authorizing for issuance up to 10,000,000 shares of
preferred stock ("Preferred Stock"), in addition to the currently authorized 125,000,000 shares of common stock.</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
We are asking you to approve the authorization of Preferred Stock to enhance our flexibility in structuring future public or private financing transactions. Because an issuance of Preferred Stock may be treated differently than an issuance of debt
under the covenants contained in our current credit facilities and indentures, we believe that having the flexibility to issue Preferred Stock may be beneficial for purposes of being able to raise additional funds in the future, if needed, while
maintaining compliance with those covenants.</FONT></TD>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>4</FONT></P>

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&nbsp;</FONT></TD>
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<TD WIDTH="60%" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2><BR>
The Board of Directors represents that it does not intend to issue, without prior stockholder approval, any series of Preferred Stock for any defensive or anti-takeover purpose, to implement any stockholder rights plan or with features intended to
make any attempted acquisition of the Company more difficult or costly.</FONT></TD>
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&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%" VALIGN="BOTTOM" style="font-family:times;"><BR><FONT SIZE=2><B>The Board of Directors has approved this amendment and recommends a vote "for" this proposal.</B></FONT><FONT SIZE=2> The affirmative vote of holders of record of not less than a majority of the
outstanding shares of common stock on the record date is required for approval of the proposed amendment to the charter. Because the affirmative vote of a majority of our outstanding shares is required to approve this proposal, broker non-votes and
abstentions have the same effect as a vote against this proposal, so please vote.</FONT></TD>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>5</FONT></P>

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<BR></FONT><FONT SIZE=2><B>ELECTION OF DIRECTORS<BR>  (PROPOSAL NO. 1)    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Board of Directors currently has six members. The directors are divided into two classes serving staggered two-year terms. This year our
Class&nbsp;I Directors are up for election. The Board, upon the recommendation of its Nominating/Governance Committee, has nominated Steven J. Hilton, Raymond Oppel and Richard T. Burke Sr., who are
presently serving as Class&nbsp;I Directors, for re-election. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Biographical
information for each of our director nominees is set forth below: </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Steven J. Hilton, 46,</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;was co-chairman and co-chief executive officer of Meritage Homes Corporation
from 1997 to May 2006. In May 2006, Mr.&nbsp;Hilton was named the Company's chairman and chief executive officer. Mr.&nbsp;Hilton co-founded Arizona-based Monterey Homes in 1985. Under
Mr.&nbsp;Hilton's leadership, Monterey became publicly traded and combined with Legacy Homes in 1997, which thereafter became Meritage. Mr.&nbsp;Hilton received his Bachelor of Science degree in
accounting from the University of Arizona and is a director of Western Alliance Bancorporation, a $4&nbsp;billion community bank based in Las Vegas, Nevada. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Raymond Oppel, 51,</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;has been a director since December 1997. He was the co-founder, chairman and chief executive
officer of the Oppel Jenkins Group, a regional homebuilder in Texas and New Mexico, which was sold in 1995 to the public homebuilder KB Home. Mr.&nbsp;Oppel is a licensed real estate broker and
currently is active as a private investor in real estate development and land banking. Mr.&nbsp;Oppel has over 18&nbsp;years of experience in the homebuilding business. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Richard T. Burke, Sr., 64,</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;was appointed as a director in September 2004. Mr.&nbsp;Burke is the Chairman of the Board of
Directors of UnitedHealth Group, which he founded, took public in 1984 and served as chairman and chief executive officer until 1988. From 1995 until 2001, Mr.&nbsp;Burke was the owner and chief
executive officer of the Phoenix Coyotes, a National Hockey League team. Mr.&nbsp;Burke is also a director of First Cash Financial Services,&nbsp;Inc. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
nominees have consented to serve as directors. The Board of Directors has no reason to believe that any of the nominees will be unable to act as a director. However, should a nominee
become unable to serve or should a vacancy on the Board occur before the annual meeting, the Board may either reduce its size or designate a substitute nominee. If a substitute nominee is named, your
shares will be voted for the election of the substitute nominee. In the vote on the election of the director nominees, stockholders may: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>vote
</FONT><FONT SIZE=2><B>FOR</B></FONT><FONT SIZE=2> all nominees;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>vote
to </FONT><FONT SIZE=2><B>WITHHOLD</B></FONT><FONT SIZE=2> votes for all nominees; or
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><B>WITHHOLD</B></FONT><FONT SIZE=2> votes as to specific nominees. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
you tell us by your proxy to vote differently, your shares will be voted </FONT><FONT SIZE=2><B>FOR</B></FONT><FONT SIZE=2> the Board's nominees. If a quorum is present, the
three nominees who receive the most votes will be elected. Broker non-votes and votes that are withheld have no effect. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE<BR>
ELECTION OF THE ABOVE-NAMED NOMINEES AS DIRECTORS.  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>6</FONT></P>

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<A NAME="toc_de77301_2"> </A>
<BR></FONT><FONT SIZE=2><B>RATIFICATION OF INDEPENDENT<BR>  REGISTERED PUBLIC ACCOUNTING FIRM<BR>  (PROPOSAL NO. 2)    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors seeks an indication from stockholders of their approval or disapproval of the Audit Committee's appointment of Deloitte&nbsp;&amp;
Touche&nbsp;LLP as our independent registered public accounting firm for 2008. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deloitte&nbsp;&amp;
Touche&nbsp;LLP was appointed our auditor in 2005 and no relationship exists other than the usual relationship between auditors and clients. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An
affirmative vote of the majority of the shares present at the annual meeting is required to ratify the selection of Deloitte&nbsp;&amp; Touche&nbsp;LLP as the Company's independent
auditor. Broker non-votes and votes that are withheld have no effect. If the appointment of Deloitte&nbsp;&amp; Touche&nbsp;LLP as auditors for 2008 is not approved by stockholders, the
adverse vote will be considered a direction to the Audit Committee to consider other auditors for next year. However, because of the difficulty in making any substitution of auditors so long after the
beginning of the current year, the appointment in 2008 will stand, unless the Audit Committee finds other good reason for making a change. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>THE BOARD OF DIRECTORS HAS APPROVED THIS PROPOSAL NO. 2 AND<BR>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR"<BR>
PROPOSAL NO. 2.  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>7</FONT></P>

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<A NAME="toc_dg77301_1"> </A>
<BR></FONT><FONT SIZE=2><B>AMENDMENTS TO THE 2006 STOCK INCENTIVE PLAN<BR>  <BR>    Information Relating to Proposals 3 and 4    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January&nbsp;16, 2008, our Board of Directors adopted, subject to stockholder approval, amendments to the Meritage Homes Corporation 2006 Stock Incentive
Plan (the "2006 Stock Incentive Plan") that would increase the number of shares of common stock reserved for issuance under the plan from 700,000 (excluding shares remaining available for grant that
were rolled into the 2006 Stock Incentive Plan from our former stock option plan) to 1,600,000 and change the maximum number of shares with respect to one or more awards that can be granted to any one
person from an aggregate of 100,000 shares to 250,000 shares per year. Each of these amendments is set forth below in a separate proposal for approval by stockholders. Each proposal is independent of,
and not conditioned upon, approval of the other. The affirmative vote of a majority of the votes cast is required for approval of this amendment to the 2006 Stock Incentive Plan, provided that the
total vote cast on the proposal represents over 50% in interest of all securities entitled to vote on the proposal. For purposes of the vote on the amendment, abstentions will have the same effect as
votes against the proposal, and broker non-votes will have the same effect as votes against the proposal, unless holders of more than 50% in interest of all securities entitled to vote on
the proposal cast votes, in which event broker non-votes will not have any effect on the result of the vote. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>


&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain material features of the plan are discussed below, however, the description is subject to, and qualified by the full text of the plan, attached as </FONT> <FONT
SIZE=2><I>Appendix&nbsp;A</I></FONT><FONT SIZE=2>, which includes the proposed amendments highlighted in bold. The closing price for our common stock on March&nbsp;31, 2008, as
reported on the NYSE, was $19.32 per share.

 </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board believes the 2006 Stock Incentive Plan promotes success and enhances our value, because it ties the personal interests of the participants to those of stockholders and provides
the participants with an incentive for outstanding performance. The Executive Compensation Committee of the Board of Directors (the "Compensation Committee") administers the plan, and has exclusive
authority over it, including the power to determine a participant's eligibility, the types of awards to be granted, the timing of the awards and the exercise price of awards. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>


&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to facilitate approval of this proposal and alleviate any stockholder concerns regarding the number of equity awards we intend to grant in a given year, our Compensation
Committee and management commit to our stockholders that for fiscal years 2007, 2008 and 2009, we will not grant



during such three fiscal years a number of shares subject to options or other awards such that the average number of shares granted during such three fiscal years is greater than 3.33% of the average
number of shares of our common stock that were outstanding at the beginning of each of the three fiscal years ("Burn Rate"). For calculation purposes, the Burn Rate is determined as (i)&nbsp;for
each fiscal year, the number of new grants for shares underlying options, SARs, and similar awards plus one and a half times the number of new grants for shares underlying other equity-related awards
(including restricted stock and deferred stock) for which the participant does not pay the grant date share value, divided by (ii)&nbsp;the number of shares outstanding at the beginning of each
corresponding fiscal year. This limitation applies to awards that can result in the delivery of shares but would exclude any plans assumed in connection with an acquisition.

 </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Eligibility  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Awards may be made to any officer, employee or executive of the Company, as well as to non-employee directors and consultants or advisors to the
Company. As of December&nbsp;31, 2007, there were five non-employee directors and approximately 140 officers and employees of the Company and its subsidiaries eligible to participate in
the 2006 Stock Incentive Plan. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>8</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B>Types of Awards  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 2006 Stock Incentive Plan provides for grants of stock options, stock appreciation rights, restricted stock, performance shares and performance-based awards
(each, an "Award"), whether granted alone or in combination, pursuant to which shares of common stock, cash or a combination thereof may be delivered to the Award recipient; provided that stock
appreciation rights will be paid only in shares. Under the 2006 Stock Incentive Plan, the total number of shares of common stock available for future Awards is reduced by one share for each share
issued in connection with an option or a stock appreciation right and by 1.38 shares for each share issued in connection with any other type of Award. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Options.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;An option is the right to purchase shares of common stock at a future date at a specified exercise price. The
Executive Compensation Committee (the "Compensation Committee") may grant both nonqualified stock options and incentive stock options under the 2006 Stock Incentive Plan. The per share exercise price
will be determined by the Compensation Committee, but must be at least equal to the fair market value of the underlying shares of common stock on the date of grant. The Compensation Committee
determines the date after which options may be exercised in whole or in part and the expiration date of each option, which cannot be more than ten years from the date of grant. However, in the case of
an incentive stock option granted to a participant who holds more than 10% of
the voting power of the Company, the exercise price must be at least 110% of the fair market value of the underlying shares of common stock on the date of grant and the expiration date cannot be more
than five years from the date of grant. The exercise price of an option may be paid in shares of common stock, cash or a combination thereof, as determined by the Compensation Committee, including an
irrevocable commitment by a broker to pay the exercise price from the proceeds of a sale of shares issuable under the option, the delivery of previously owned shares or withholding of shares
deliverable upon exercise. Options cannot be repriced (or cancelled and regranted at a lower exercise price) without shareholder approval, other than in connection with a change in the Company's
capitalization. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock Appreciation Rights.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;A stock appreciation right is a right granted to the participant to receive, in shares of common
stock, an amount equal to the appreciation of one share of common stock from the date of grant. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted Stock Awards.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Awards of shares of stock may be granted under the 2006 Stock Incentive Plan, although the shares
are generally subject to a risk of forfeiture or to other conditions or restrictions during specified periods of time. The Compensation Committee does not typically issue a stock certificate
representing a restricted stock award until the restrictions applicable to all or part of the award have lapsed, and the Compensation Committee has discretion to waive in whole or in part restrictions
or forfeiture conditions relating to the restricted stock award. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Performance Share Awards.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Performance share awards are rights to receive, in cash, shares of common stock or a combination
thereof, an amount equal to the value of common stock if certain performance goals are attained. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Performance-Based Awards.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The purpose of performance-based awards is to qualify restricted stock or performance share awards
as "performance-based compensation" pursuant to Section&nbsp;162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). Section&nbsp;162(m) of the Code limits the Company's federal
income tax deduction for compensation paid to any of the executive officers named in the summary compensation table of its annual proxy statement. The limit is $1&nbsp;million per officer per year,
with certain exceptions. However, the deductibility limit does not apply to "performance-based compensation" if the qualifying performance criteria and maximum amounts payable upon the satisfaction of
performance goals are approved in advance by the Company's </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>9</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_dg77301_1_10"> </A>
<BR>

<P style="font-family:times;"><FONT SIZE=2>stockholders.
Stockholders approved the qualifying performance criteria and maximum amounts payable for purposes of Section&nbsp;162(m) of the Code at the annual meeting of stockholders in 2006. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
the satisfaction of the performance criteria, the number of shares issued or the amount paid under an Award may be reduced by the Compensation Committee on the basis of
such further considerations as the Compensation Committee in its sole discretion may determine. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B>Change in Control  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a change of control occurs and Awards are converted, assumed, or replaced by a successor, the Compensation Committee has the discretion to cause all
outstanding Awards to become fully exercisable and all restrictions on outstanding Awards to lapse. If a change of control occurs and the Awards are not converted, assumed, or replaced by a successor,
all outstanding Awards shall automatically become fully exercisable and all restrictions on outstanding Awards shall lapse. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Amendment to or Termination of the 2006 Stock Incentive Plan  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee, with the Board's approval, may amend, alter or discontinue the 2006 Stock Incentive Plan. However, other than in connection with a
change in the Company's capitalization, no amendment may be made without stockholder approval if such amendment would: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>increase
the maximum number of shares of common stock for which Awards may be granted under the 2006 Stock Incentive Plan;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>permit
the Compensation Committee to grant options with an exercise price that is below the fair market value of a share of common stock on the date of grant;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>permit
the Compensation Committee to extend the exercise period for an option beyond ten years from the date of grant;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>permit
the Compensation Committee to reprice previously-granted options; or
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>require
stockholder approval under any laws, regulation or stock exchange rule. </FONT></DD></DL>
</UL>
<BR>

<P style="font-family:times;"><FONT SIZE=2><B>Plan Benefits  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth grants of options and restricted shares through March&nbsp;1, 2008 made under the 2006 Stock Incentive Plan since its inception
to (i)&nbsp;each of our named executive officers, (ii)&nbsp;all current executive officers, as a group; (iii)&nbsp;all current directors and director nominees who are not executive officers, as
a group; and (iv)&nbsp;all employees, including all current officers who are not </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>10</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=15,EFW="2184391",CP="MERITAGE HOMES CORP.",DN="1",CHK=699164,FOLIO='10',FILE='DISK133:[08ZAH1.08ZAH77301]DG77301A.;12',USER='RKING',CD='31-MAR-2008;17:13' -->
<A NAME="page_dg77301_1_11"> </A>
<BR>

<P style="font-family:times;"><FONT SIZE=2>executive
officers, as a group. Grants under the plan are made at the discretion of the Board of Directors. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="83%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Individual Or Group Name<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="19%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Number Of Shares Subject<BR>
To Options and Non-<BR>
Vested Shares Granted</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Weighted Average<BR>
Exercise Price Per<BR>
Share</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Executive Officers</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="53%" style="font-family:times;"><FONT SIZE=2>Steven J. Hilton</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>243,160</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>29.97</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="53%" style="font-family:times;"><FONT SIZE=2>Larry W. Seay</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>154,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>26.00</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="53%" style="font-family:times;"><FONT SIZE=2>C. Timothy White</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>87,500</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>25.73</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="53%" style="font-family:times;"><FONT SIZE=2>Steven M. Davis</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>95,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>20.95</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="53%" style="font-family:times;"><FONT SIZE=2>Sandra R.A. Karrmann</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>28,500</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>41.49</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2><BR>
Executive Officer Group (five persons)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
608,160</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
27.49</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2><BR>
Non-Executive Officer Director Group</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="19%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="19%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="53%" style="font-family:times;"><FONT SIZE=2>Robert G. Sarver</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>28,500</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>19.69</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="53%" style="font-family:times;"><FONT SIZE=2>Raymond Oppel</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>28,500</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>19.69</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="53%" style="font-family:times;"><FONT SIZE=2>Peter L. Ax</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>28,500</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>19.69</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="53%" style="font-family:times;"><FONT SIZE=2>Richard T. Burke, Sr.&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>28,500</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>19.69</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="53%" style="font-family:times;"><FONT SIZE=2>Gerald W. Haddock</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>28,500</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>19.69</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2><BR>
Non-Executive Officer Director Group (five persons)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
142,500</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
19.69</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Non-Executive Officer Employee Group (about 140 persons)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,900,136</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>33.27</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>11</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=16,EFW="2184391",CP="MERITAGE HOMES CORP.",DN="1",CHK=711016,FOLIO='11',FILE='DISK133:[08ZAH1.08ZAH77301]DG77301A.;12',USER='RKING',CD='31-MAR-2008;17:13' -->
<A NAME="page_dg77301_1_12"> </A>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dg77301_proposal_to_approve_an_amendme__pro06338"> </A>
<A NAME="toc_dg77301_2"> </A>
<BR></FONT><FONT SIZE=2><B>PROPOSAL TO APPROVE AN AMENDMENT TO THE 2006 STOCK INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK AUTHORIZED<BR>  FOR ISSUANCE THEREUNDER<BR>  (PROPOSAL NO. 3)    <BR>    </B></FONT></P>

<P style="font-family:times;">

<FONT SIZE=2>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors has reviewed the shares currently available under the 2006 Stock Incentive Plan and has determined that it is appropriate to increase the
maximum number of shares authorized for issuance under the 2006 Stock Incentive Plan. As of March&nbsp;31, 2008, (i)&nbsp;28,444 shares have been issued upon exercise of options or vesting of
non-vested shares under the 2006 Stock Incentive Plan, (ii)&nbsp;option grants representing 1,540,977&nbsp;shares were outstanding under the 2006 Stock Incentive Plan and (iii)&nbsp;137,832
shares of restricted stock had been awarded under the 2006 Stock Incentive Plan and not otherwise forfeited or cancelled. The total number of shares of common stock available for awards under the 2006
Stock Incentive Plan currently is 433,353, which the Board believes is inadequate for the purpose of providing future equity incentives. The Board has determined that increasing the amount of shares
of common stock issuable under the 2006 Stock Incentive Plan is necessary in order





to be able to grant additional equity awards to continue to retain and motivate key employees in the current difficult homebuilding environment. As a result, the Board is asking the stockholders to
approve an amendment to the 2006 Stock Incentive Plan that would increase the number of shares authorized for issuance from 700,000 (excluding shares that were rolled into the 2006 Stock Incentive
Plan from our former incentive plan) to 1,600,000.


</FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSAL TO APPROVE AN AMENDMENT TO THE 2006 STOCK INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK AUTHORIZED FOR
ISSUANCE THEREUNDER.  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>12</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=17,EFW="2184391",CP="MERITAGE HOMES CORP.",DN="1",CHK=789109,FOLIO='12',FILE='DISK133:[08ZAH1.08ZAH77301]DG77301A.;12',USER='RKING',CD='31-MAR-2008;17:13' -->
<A NAME="page_dg77301_1_13"> </A>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dg77301_proposal_to_approve_an_amendme__pro09208"> </A>
<A NAME="toc_dg77301_3"> </A>
<BR></FONT><FONT SIZE=2><B>PROPOSAL TO APPROVE AN AMENDMENT TO THE 2006 STOCK INCENTIVE PLAN TO INCREASE THE LIMIT ON THE NUMBER OF SHARES OF COMMON STOCK WITH RESPECT TO ONE OR MORE AWARDS THAT MAY BE  GRANTED TO A PARTICIPANT<BR>  DURING A CALENDAR
YEAR<BR>  (PROPOSAL NO. 4)    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 2007, equity awards were approved under the 2006 Stock Incentive Plan that exceeded the plan's annual limitation on the number of shares with respect to
one or more Awards that may be granted to any participant during a single calendar year. As a result, the Company withheld the awards that exceeded the annual limit, and determined that an amendment
to the 2006 Stock Incentive Plan was warranted to enable larger grants. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board has determined that increasing the amount of shares subject to the annual grant limitation is appropriate in order to retain and motivate key employees in the current difficult
homebuilding environment. We note that our equity grants are within guidelines established for our industry and similarly-sized companies by major stockholder advocate groups. The Board is asking the
stockholders to approve this amendment to the 2006 Stock Incentive Plan that would change the maximum number of shares with respect to one or more Awards that could be issued to any one person from an
aggregate of 100,000 shares to 250,000 shares per year. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSAL TO APPROVE AN AMENDMENT TO THE 2006 STOCK INCENTIVE PLAN TO INCREASE THE LIMIT ON THE NUMBER OF SHARES OF COMMON STOCK
WITH RESPECT TO ONE OR MORE AWARDS THAT MAY BE GRANTED TO A PARTICIPANT DURING A CALENDAR YEAR.  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>13</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=18,EFW="2184391",CP="MERITAGE HOMES CORP.",DN="1",CHK=261608,FOLIO='13',FILE='DISK133:[08ZAH1.08ZAH77301]DG77301A.;12',USER='RKING',CD='31-MAR-2008;17:13' -->
<A NAME="page_dg77301_1_14"> </A>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dg77301_proposal_to_approve_authorizat__pro02668"> </A>
<A NAME="toc_dg77301_4"> </A>
<BR></FONT><FONT SIZE=2><B>PROPOSAL TO APPROVE AUTHORIZATION OF PREFERRED STOCK<BR>  (PROPOSAL NO. 5)    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January&nbsp;16, 2008, the Board of Directors declared advisable and approved, subject to the approval of the stockholders, an amendment to the Company's
Articles of Incorporation increasing the number of shares of capital stock the Company is authorized to issue from 125,000,000 to 135,000,000 by authorizing for issuance up to 10,000,000 shares of
Preferred Stock, in addition to the currently authorized 125,000,000 shares of common stock. The proposed amendment to the Company's Articles of Incorporation is attached to this proxy statement as </FONT> <FONT
SIZE=2><I>Appendix&nbsp;B.</I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Reasons for the Proposal  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The proposed amendment, if approved by stockholders, will supplement our authorized common stock by creating an undesignated class of Preferred Stock. Although
the Board of Directors has no immediate plans to issue Preferred Stock, the Board believes that the proposed authority to issue Preferred Stock will enhance the Company's flexibility in structuring
future public or private financings and possible acquisitions. The Preferred Stock also may be useful in connection with stock dividends, equity compensation plans or other proper corporate actions. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred
stock provides investors with a preference over the common stockholders upon a liquidity event, usually in the amount invested, plus accrued but unpaid dividends, if any.
Further, the conversion feature of Preferred Stock, if any, will generally enable an investor to choose between the amount it would receive upon conversion into common stock and the amount due under
the preference. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because
an issuance of Preferred Stock may be treated differently than an issuance of debt under the covenants contained in our current credit facilities and indentures, we believe that
having the flexibility to issue Preferred Stock may be beneficial for purposes of being able to raise additional funds in the future, if needed, while maintaining compliance with those covenants. In
this regard, Preferred Stock established by the Board of Directors, if the charter amendment is approved, could be treated as equity, mezzanine, or debt on our balance sheet based on the underlying
structure of the transaction. Dividends on the Preferred Stock, depending on how the security is structured, may or may not be considered as interest for purposes of interest coverage ratios. If
Preferred Stock is authorized, we would have the opportunity to negotiate terms most beneficial to us, subject to market conditions, relative to our balance sheet and indebtedness. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Having
the authority to issue Preferred Stock by Board action will enable us to develop equity securities with terms tailored to specific purposes and to avoid the possible delay
associated with, and significant expense of, calling and holding a special meeting of stockholders to authorize additional capital stock. The Board believes that an enhanced ability to respond to
opportunities and to favorable capital market conditions before the opportunities or conditions pass is in the best interests of the Company and its stockholders. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B>Effect of Amendment  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the proposal is approved, the Board of Directors would be authorized to issue at its discretion one or more series of Preferred Stock from time to time without
any further shareholder action, unless additional shareholder action is required by law, the Articles of Incorporation, regulatory authorities or the rules of any stock exchange on which the Company's
securities are then listed. The authority of the Board of Directors would include, among other things, establishing the number of shares constituting a series, dividend rights, voting rights,
conversion or exchange privileges, redemption features, sinking fund provisions, and rights in the event of a voluntary or involuntary liquidation or dissolution. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>14</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_dg77301_1_15"> </A>
<UL>

<P style="font-family:times;"><FONT SIZE=2><I> Effect on Common Stock  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is not possible to state the actual effects of the proposed Preferred Stock upon the rights of holders of common stock until the Board of Directors determines
the respective rights of the holders of one or more series of Preferred Stock. The issuance of shares of Preferred Stock may, however, adversely affect the rights of the holders of common stock. For
example, in the absence of a proportionate
increase in the Company's earnings and book value, an increase in the aggregate number of outstanding shares caused by the issuance of Preferred Stock would dilute the earnings per share and book
value per share of all outstanding shares of common stock. In addition, a series of Preferred Stock could rank senior to the common stock as to dividend rights or liquidation preferences or both, may
have full or enhanced voting rights, and may be convertible into shares of common stock. The effects of an issuance of Preferred Stock could include (i)&nbsp;reduction of the amount of funds
otherwise available for payment of dividends on common stock, (ii)&nbsp;restrictions on dividends on common stock, (iii)&nbsp;dilution of the voting power of common stock, and
(iv)&nbsp;restrictions on the rights of holders of common stock to share in the Company's assets on liquidation until satisfaction of any liquidation preference granted to the holders of Preferred
Stock. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><I> "De-Clawed" Blank Check Preferred Stock  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors represents that it does not intend to issue, without prior stockholder approval, any series of Preferred Stock for any defensive or
anti-takeover purpose, to implement any stockholder rights plan or with features intended to make any attempted acquisition of the Company more difficult or costly, without stockholder
approval. However, within these limits, the Board of Directors may issue Preferred Stock for financing, acquisition or other corporate purposes that has the effect of making an acquisition of the
Company more difficult or costly, as could also be the case if the Board were to issue additional common stock for such purposes. Consequently, the Board of Directors believes that, as structured, the
Preferred Stock is in the best interests of the Company and its stockholders because it (i)&nbsp;is consistent with sound corporate governance principles and (ii)&nbsp;enhances our ability to take
advantage of financing alternatives and acquisition opportunities. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B>Other Considerations  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the above, any Preferred Stock issued could make a change in control of the Company more difficult, and therefore less likely, by reducing the
likelihood of an inexpensive hostile takeover attempt during times when our stock price experiences significant volatility. Any such issuance could dilute the stock ownership or voting rights of, or
increase the costs to, a person seeking to obtain control of the Company, thereby deterring or rendering more difficult a merger, tender offer, proxy contest or other extraordinary transaction. To the
extent that it impedes any such attempts, the amendment to our charter may serve to perpetuate current management. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
amendment to the Articles of Incorporation is not being proposed in response to any known effort or threat to acquire control of the Company and is not part of a plan by management
to adopt a series of amendments to the charter and bylaws that would thwart such efforts. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Existing
provisions in the Articles of Incorporation and bylaws may also have the effect of delaying or preventing a merger with or acquisition of the Company, even where the
stockholders may consider it to be favorable. These provisions could also prevent or hinder an attempt by stockholders to replace our current directors and include: (i)&nbsp;a classified board of
directors; (ii)&nbsp;a provision that directors may only be removed for cause (iii)&nbsp;a limitation on the maximum number of directors; (iv)&nbsp;a limitation on the ability of stockholders to
call a special meeting of stockholders; (v)&nbsp;a provision that only the directors can amend the bylaws; and (vi)&nbsp;advance notice requirements for nominations for election to the Board of
Directors or for proposing matters that can be acted on by stockholders at a stockholders meeting. In addition, the Maryland Business Combination statute provides, generally, that no </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>15</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_dg77301_1_16"> </A>
<BR>

<P style="font-family:times;"><FONT SIZE=2>stockholder
holding more than 10% of the outstanding shares of common stock may engage in a merger or other similar transaction with the Company for a period of five years after first obtaining that
10% stockholder position unless that acquisition, or the proposed merger or other transaction, were approved by the Board of Directors before the interested stockholder acquired the 10% or greater
interest. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Approval Requirements  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The affirmative vote of holders of record of not less than a majority of the outstanding shares of common stock on the record date is required for approval of the
proposed amendment to the Articles of Incorporation. Because the affirmative vote of a majority of our outstanding shares is required to approve this proposal, broker non-votes and
abstentions have the same effect as a vote against this proposal. If the proposed amendment is approved by the stockholders, it will become effective upon its acceptance by the State Department of
Assessments and Taxation of Maryland, which is expected to occur as soon as reasonably practicable after approval. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>THE BOARD RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE AMENDMENT TO OUR ARTICLES OF INCORPORATION AUTHORIZING THE ISSUANCE OF PREFERRED STOCK.  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>16</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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 </FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="di77301_security_ownership_by___di702494"> </A>
<A NAME="toc_di77301_1"> </A>
<BR></FONT><FONT SIZE=2><B>SECURITY OWNERSHIP BY MANAGEMENT AND PRINCIPAL STOCKHOLDERS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes, as of March&nbsp;17, 2008, the number and percentage of outstanding shares of
our common stock beneficially owned by the following: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>each
Meritage director and nominee for director;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>each
executive officer named in the summary compensation table; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>all
Meritage directors and executive officers as a group. </FONT></DD></DL>
</UL>
<BR>



<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="88%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="22%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name Of<BR>
Beneficial Owner(1)<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="22%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Position With The Company</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="11%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Number<BR>
Of Shares<BR>
Owned(2)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Right To<BR>
Acquire By<BR>
May&nbsp;16, 2008</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="11%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Total<BR>
Shares<BR>
Beneficially<BR>
Owned</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Percent Of<BR>
Outstanding<BR>
Shares</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=2>Steven J. Hilton</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=2>Director, Chairman and CEO</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,849,054</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>(3)</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>228,642</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,077,696</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7.9</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=2>Robert G. Sarver</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=2>Director</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>474,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>(4)</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>12,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>486,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.8</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=2>Raymond Oppel</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=2>Director</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>25,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>(5)</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>22,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>47,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=2>Peter L. Ax</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=2>Director</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>14,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>12,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>26,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="22%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Richard T. Burke, Sr.&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Director</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>4,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>12,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>16,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=2>Gerald W. Haddock</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=2>Director</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>8,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>(6)</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=2>Larry W. Seay</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=2>Executive Vice President, Chief Financial Officer</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>67,076</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>91,333</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>158,409</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=2>C. Timothy White</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=2>Executive Vice President,<BR>
General Counsel<BR>
and Secretary</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>21,264</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>(6)</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>23,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>44,264</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=2>Steven M. Davis</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=2>Executive Vice President&#151;<BR>
National Homebuilding Operations</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>8,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=2>Sandra R.A Karrmann</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=2>Former Exec. Vice President,<BR>
Chief Human Resources Officer</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="22%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>All current directors and executive officers as a group (10 persons)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,467,394</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>405,975</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,873,369</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10.9</FONT></TD>
</TR>
</TABLE>

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<HR NOSHADE ALIGN="LEFT" WIDTH="120">
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>*</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Less
than 1%.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
address for our directors and executive officers is c/o Meritage Homes Corporation, 17851 North 85<SUP>th</SUP>&nbsp;Street, Suite&nbsp;300, Scottsdale, Arizona 85255.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
amounts shown include the shares of common stock actually owned as of March&nbsp;17, 2008, and the shares that the person or group had the right to acquire within 60&nbsp;days
of that date. The number of shares includes shares of common stock owned of record by such person's spouse and minor children and by other related individuals and entities over whose shares of common
stock such person has custody, voting control or the power of disposition. In calculating the percentage of ownership, all shares of common stock which the identified person had the right to acquire
within 60&nbsp;days of March&nbsp;17, 2008 upon exercise of options are considered as outstanding for computing the percentage of the shares owned by that person or group, but are not considered
as outstanding for computing the percentage of the shares of stock owned by any other person. The shares owned do not include any unvested restricted stock.

<BR><BR></FONT></DD>

<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Shares
are held by family trusts. Subsequent to March&nbsp;17, 2008, 800,000 of these shares were pledged to a third-party lending institution.


<BR><BR></FONT></DD>

<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Mr.&nbsp;Sarver
is deemed to indirectly own an additional 8,000 shares through his family members, and 875,000 shares are owned by Southwest Value Partners Fund XIV,&nbsp;LP, an
entity in which Mr.&nbsp;Sarver indirectly shares control over voting, purchase and disposition of these shares. Additionally, an entity of which Mr.&nbsp;Sarver is a member owns 1,000,000 shares
of our common stock. Mr.&nbsp;Sarver has expressly disclaimed any beneficial ownership of these shares.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(5)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>6,000
shares are owned indirectly by family trusts.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(6)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>All
shares pledged to a third-party lending institution to secure a loan. </FONT></DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>17</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_di77301_1_18"> </A>

<P style="font-family:times;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain Other Beneficial Owners.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Based on filings made under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as of March&nbsp;17, 2008, the only other known beneficial owners of more than 5% of Meritage common stock are shown in the following table: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="83%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="36%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="36%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=3 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Shares Beneficially Owned</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="36%" ROWSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name of Other Beneficial Owners<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="36%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="36%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Address Of Beneficial Owner</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Number</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="7%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Percent</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="36%" style="font-family:times;"><FONT SIZE=2>LMM,&nbsp;LLC(1)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="36%" style="font-family:times;"><FONT SIZE=2>100 Light Street<BR>
Baltimore, MD 21202</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,600,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9.91</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="36%" style="font-family:times;"><FONT SIZE=2><BR>
Invesco,&nbsp;Ltd.(2)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="36%" style="font-family:times;"><FONT SIZE=2><BR>
1360 Peachtree Street NE<BR>
Atlanta, GA 30309</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
2,492,536</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
9.50</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="36%" style="font-family:times;"><FONT SIZE=2><BR>
T. Rowe Price Associates,&nbsp;Inc.(3)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="36%" style="font-family:times;"><FONT SIZE=2><BR>
100 E. Pratt Street<BR>
Baltimore, MD 21202</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
2,491,400</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
9.40</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="36%" style="font-family:times;"><FONT SIZE=2><BR>
Earnest Partners,&nbsp;LLC(4)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="36%" style="font-family:times;"><FONT SIZE=2><BR>
1180 Peachtree Street NE, Suite&nbsp;2300<BR>
Atlanta, GA 30309</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
2,099,841</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
8.00</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="36%" style="font-family:times;"><FONT SIZE=2><BR>
Barclays Global Investors, NA(5)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="36%" style="font-family:times;"><FONT SIZE=2><BR>
45 Fremont Street<BR>
San Francisco, CA 94105</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
1,920,783</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
7.32</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="36%" style="font-family:times;"><FONT SIZE=2><BR>
State Street Bank&nbsp;&amp; Trust&nbsp;Co.(6)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="36%" style="font-family:times;"><FONT SIZE=2><BR>
One Lincoln Center<BR>
Boston, MA 02111</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
1,680,590</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
6.40</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>%</FONT></TD>
</TR>
</TABLE>
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<HR NOSHADE ALIGN="LEFT" WIDTH="120">
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Based
solely on a Schedule&nbsp;13G/A, filed with the SEC February&nbsp;14, 2008, LLM,&nbsp;LLC has shared voting and dispositive power with respect to 2,600,000 shares.

<BR><BR></FONT></DD>

<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Based
solely on a Schedule&nbsp;13G, filed with the SEC February&nbsp;13, 2008, Invesco,&nbsp;Ltd. and certain affiliated entities have shared voting and dispositive power with
respect to 2,492,536 shares.



<BR><BR></FONT></DD>



<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Based
solely on a Schedule&nbsp;13G, filed with the SEC February&nbsp;13, 2008, T. Rowe Price Associates,&nbsp;Inc. has sole voting power with respect to 756,300 shares and sole
dispositive power with respect to 2,491,400 shares.


<BR><BR></FONT></DD>



<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Based
solely on a Schedule&nbsp;13G/A, filed with the SEC January&nbsp;31, 2008, Earnest Partners,&nbsp;LLC has sole voting power with respect to 639,312 shares, shared voting
power with respect to 511,129 shares and sole dispositive power with respect to 2,099,841 shares.

<BR><BR></FONT></DD>

<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(5)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Based
solely on a Schedule&nbsp;13G, filed with the SEC February&nbsp;5, 2008, Barclays Global Investors, NA and certain affiliated entities have sole voting power with respect to
1,589,746 shares and sole dispositive power with respect to 1,920,783 shares.

<BR><BR></FONT></DD>

<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(6)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Based
solely on a Schedule&nbsp;13G, filed with the SEC February&nbsp;12, 2008, State Street Bank&nbsp;&amp; Trust&nbsp;Co. has sole voting and dispositive power with respect to
1,680,590 shares.


</FONT></DD>

</DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>18</FONT></P>

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<P style='font-family:times;page-break-before:always'></p>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="di77301_corporate_governance_principles_and_board_matters"> </A>
<A NAME="toc_di77301_2"> </A>
<BR></FONT><FONT SIZE=2><B>CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors is elected by the stockholders to oversee the stockholders' interests in the operation and overall success of our business. The Board
serves as our ultimate decision-making body,
except for those matters reserved to or that require a vote of our stockholders. The Board selects and oversees the members of senior management who are charged by the Board with conducting our
business. We have established and operate in accordance with a comprehensive plan of corporate governance that defines and sets ethical standards for the conduct of our directors, officers and
employees. This plan provides an important framework within which the Board of Directors can pursue our strategic objectives and ensure long-term stockholder value. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Corporate Governance Principles and Practices  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have adopted Corporate Governance Principles and Practices that define the key elements of our corporate governance framework and philosophy, including: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>director
qualifications,
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>independence
criteria,
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>director
responsibilities,
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>our
committee structure,
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>officer
and director stock ownership requirements,
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>director
resignation policy,
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>director
access to officers and employees,
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>our
philosophy with respect to director compensation,
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>requirements
regarding director orientation and continuing education, and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>our
plans with respect to management succession. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
Corporate Governance Principles and Practices are available on our website at </FONT><FONT SIZE=2><I>www.meritagehomes.com</I></FONT><FONT SIZE=2> and we will provide a print copy
to any stockholder upon request. These principles are reviewed regularly by the Nominating/Governance Committee and changes are made as appropriate. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Director Qualification and Independence  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Determinations regarding the eligibility of director candidates are made by the Nominating/Governance Committee, which considers the candidate's qualifications as
to skills and experience in the context of the needs of the Board of Directors and our stockholders. The Nominating/Governance Committee also evaluates and reports to the Board of Directors regarding
the independence of each candidate. Consistent with the rules and regulations of the NYSE, at least a majority of the Board of Directors must be independent. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
director will be deemed to be independent unless the Board of Directors affirmatively determines that the director has no material relationship with the Company, either directly or as
an officer, shareowner or partner of an organization that has a relationship with the Company. The Board observes all criteria established by the NYSE and other governing laws and regulations. In its
review of director independence, the Board of Directors considers all commercial, banking, consulting, legal, accounting, charitable or other business relationships any director may have with the
Company. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
a result of its review, the Board of Directors has determined that a majority of Meritage's Board members are independent. Our independent directors, identified by an asterisk in the
next table, are Peter Ax, Raymond Oppel, Richard Burke and Gerald Haddock. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>19</FONT></P>

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<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_di77301_1_20"> </A>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
making this determination, the Board of Directors evaluated whether there exists any relationships between these individuals and Meritage. Except as noted below, the Board of
Directors determined no relationship exists between Meritage and any independent director. In 2006, Peter Ax, an independent and our lead director, acquired from Meritage a used sports utility
vehicle. The purchase price for the vehicle was $35,000, which was the fair market value of the vehicle based on well-known and reliable published sources. The Board considered this
relationship and determined that it does not impair Mr.&nbsp;Ax's independence because the transaction was based on reliable market data and the value of the transaction is, individually and in the
aggregate, immaterial in relation to Mr.&nbsp;Ax's net worth. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Steven
J. Hilton is not considered independent because he is employed by the Company. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior
to 2004, Robert Sarver was deemed an independent director. The Nominating/Governance Committee has continually monitored certain relationships between Mr.&nbsp;Sarver and
Meritage along with relationships between Mr.&nbsp;Sarver and Mr.&nbsp;Hilton. Mr.&nbsp;Sarver and Mr.&nbsp;Hilton have certain business relationships unrelated to Meritage. The
Nominating/Governance Committee evaluated these relationships and determined that they do not impair Mr.&nbsp;Sarver's independence because they did not involve Meritage and are insignificant in
relation to Mr.&nbsp;Sarver's net worth. During 2004, Mr.&nbsp;Sarver became the controlling owner of the Phoenix Suns basketball team, in which Mr.&nbsp;Hilton purchased a minority ownership
interest. This relationship was closely evaluated by the Nominating/Governance Committee because of its significance to Messrs.&nbsp;Sarver and Hilton and because Meritage has purchased advertising
with the Phoenix Suns. Although the Nominating/Governance Committee and the Board of Directors believe Mr.&nbsp;Sarver is a valuable member of the Board and that the Company benefits from his
extensive business experience, the Nominating/Governance Committee concluded it is in the best interest of Meritage's stockholders that Mr.&nbsp;Sarver not be deemed an independent director. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board has also determined that all governance committees of the Board are composed entirely of independent directors. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>CEO and Management Succession  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors considers management evaluation and CEO succession planning an important responsibility of the Board. Under our Corporate Governance
Principles and Practices, the Board of Directors is responsible to approve a succession plan for our CEO and other senior officers. Issues relating to CEO succession planning are addressed regularly
(and at least annually) by the Board. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
the charter of the Nominating/Governance Committee, it is the role of the Nominating/Governance Committee to develop and recommend to the Board of Directors a set of corporate
governance principles and practices applicable to the Company, including items such as management succession, policies and principles for CEO selection and performance review, and policies regarding
succession in the event of an emergency or retirement of the CEO. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
development of these policies has resulted in our Corporate Governance Principles and Practices, which provides, among other things, that our Executive Compensation Committee is to
conduct an annual review of the performance of the CEO and that the entire Board of Directors is responsible to approve a succession plan for the CEO and other senior officers. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
its charter, the Executive Compensation Committee develops and presents annually to the Board a management succession program for the CEO and selected senior executives.
Additionally, our CEO performs annual evaluations of other senior management and reports to the Board on these evaluations with recommendations from time to time of potential successors. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While
the Executive Compensation Committee develops and presents a management succession program to the Board, the entire Board has primary responsibility for CEO succession planning and
develops both long-term and contingency plans for succession of the CEO. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>20</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B>The Board and Board Committees  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We currently have six incumbent directors and the following committees: Audit Committee, Executive Compensation Committee and Nominating/Governance Committee. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
2007, the Board of Directors held ten meetings. Each director attended all of these meetings and the committee meetings of which he is a member, except as follows:
Mr.&nbsp;Haddock did not attend one Board meeting, one Executive Compensation Committee meeting and two Audit Committee meetings, and Mr.&nbsp;Sarver did not attend two Board meetings. Directors
are expected to attend our annual meetings of stockholders. All directors attended our 2007 annual meeting, which was held on May&nbsp;16, 2007. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table summarizes the current members of our Board of Directors, and describes the current members of each of the committees and the number of meetings held during 2007. </FONT></P>

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<TH WIDTH="34%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Board of Directors<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="14%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Audit Committee</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="17%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Executive<BR>
Compensation<BR>
Committee</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="26%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Nominating/Governance<BR>
Committee</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>Steven J. Hilton</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="26%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>Peter L. Ax* +</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>X</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>**</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>X</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="26%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>X</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>Robert G. Sarver</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="26%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>Raymond Oppel*</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>X</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>X</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>**</FONT></TD>
<TD WIDTH="26%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>X</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>Richard T. Burke, Sr.*</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>X</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="26%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>Gerald W. Haddock*</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>X</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="26%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>X</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>**</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2><B>Number of Meetings</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="26%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD WIDTH="25%" style="font-family:times;"><FONT SIZE=2>* = Independent Director</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>X&nbsp;=&nbsp;Member</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>**&nbsp;=&nbsp;Chair</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="31%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>+&nbsp;=&nbsp;Lead Independent Director</FONT></TD>
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<P style="font-family:times;"><FONT SIZE=2><B><I>Audit Committee  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors has established an Audit Committee in accordance with Section&nbsp;3(a)(58)(A) of the Exchange Act, and the rules and regulations of the
NYSE. The Audit Committee assists the Board of Directors in: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>fulfilling
its oversight of the integrity of our financial statements,
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>reviewing
and approving related party transaction between us and senior executive officers and directors,
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>determining
our compliance with legal and regulatory requirements,
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>determining
the independent registered public accounting firm's qualifications and independence, and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>evaluating
the performance of our internal audit function and independent registered public accounting firm. </FONT></DD></DL>
</UL>
<BR>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Audit Committee has the sole authority to appoint or replace the independent registered public accounting firm and approves all audit engagement fees and terms of all significant
non-audit engagements with the independent registered public accounting firm in accordance with the pre-approval policies set forth in our Audit Committee charter. The Audit
Committee has the authority to obtain advice and assistance from, and receive appropriate funding from us for, outside legal, accounting or other advisors as it deems necessary to carry out its
duties. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Audit Committee operates under a written charter established by the Board. The charter is available on our website at </FONT> <FONT SIZE=2><I>www.meritagehomes.com</I></FONT><FONT SIZE=2> and we will provide a print copy to any stockholder upon
request. Each member of the Audit Committee meets the independence
requirements of the NYSE and the Exchange Act, and is financially literate, knowledgeable and qualified to review our </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>21</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>financial
statements. The Board of Directors has determined that Peter Ax, an independent director as defined by the NYSE's listing standards, is an "audit committee financial expert." Information
about Mr.&nbsp;Ax's past business and educational experience is included in his biography in this proxy statement under the caption "Continuing Director Information." </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
report of the Audit Committee is included in this proxy statement on page&nbsp;52. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I>Executive Compensation Committee  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Responsibilities.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors has established our Compensation Committee in accordance with the NYSE's rules and
regulations. The Compensation Committee regularly reports to the Board of Directors and its responsibilities include: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>reviewing
and approving goals and objectives relative to the compensation of our CEO and CFO, evaluating our CEO's and CFO's performance in light of these goals and
approving the compensation of our CEO and CFO,
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>ensuring
that a management succession program for our CEO and selected senior executives is developed and presented annually to the Board,
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>overseeing
all equity-based award grants,
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>making
recommendations to the Board of Directors with regard to non-CEO/CFO compensation and equity-based awards, and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>producing
a report on executive compensation to be included in our annual proxy statement. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Composition and Independence.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee is currently comprised of three members of the Board, each of whom
is designated to be "independent" under the Corporate Governance Standards of the NYSE, a "non-employee director" under Section&nbsp;16 of the Exchange Act, and an "outside director" for
purposes of Section&nbsp;162(m) of the Code. Generally the Compensation Committee Chairman is in charge of setting the Compensation Committee's meetings and calendar, as well as the agenda of each
meeting. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Charter.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee operates under a written charter, which is available on our website at </FONT> <FONT
SIZE=2><I>www.meritagehomes.com</I></FONT><FONT SIZE=2> and we will provide a print copy to any stockholder upon request. The Executive Compensation Committee Report is included in this
proxy statement at page&nbsp;48. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Outside Consultants.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee has the specific authority to hire outside advisors and consultants. In 2006,
the Compensation Committee retained Pearl Meyer&nbsp;&amp; Partners, a compensation consulting firm, to reevaluate the compensation programs for our CEO and CFO. The Compensation Committee provided
direction to Pearl Meyer&nbsp;&amp; Partners concerning the nature of the engagement, the Compensation Committee's philosophy with respect to executive compensation and key terms and conditions that the
Compensation Committee believed should be addressed in connection with the negotiation process with our CEO and CFO. The scope of the Pearl Meyer&nbsp;&amp; Partners' work was to (i)&nbsp;assist the
Compensation Committee in understanding the nature and level of executive compensation at comparable public companies, both within the homebuilding industry and companies of comparable size as
Meritage, but outside the homebuilding industry, (ii)&nbsp;assist the Compensation Committee in developing a compensation structure for our CEO and CFO based on this analysis and the Compensation
Committee's instructions and (iii)&nbsp;refine the proposed structure based on the negotiation process between the Company and the executives. As part of the work process, the Compensation Committee
met 13 times with Pearl Meyer&nbsp;&amp; Partners without management present. With the assistance of Pearl Meyer&nbsp;&amp; Partners, we negotiated and entered into amended and restated employment and
change of control agreements with Steven J. Hilton, our Chief Executive Officer and Larry W. Seay, our Chief Financial Officer. These employment and change of control agreements were entered into
effective January&nbsp;1, 2007 and are discussed in more detail later in this proxy under the </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>22</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>heading
"Compensation Discussion and Analysis&#151;Employment Agreements." As part of its annual review process in 2006, the Compensation Committee also retained Pearl Meyer&nbsp;&amp; Partners
to assist the Compensation Committee in understanding the nature and level of non-employee director compensation at comparable public companies. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
2006, management of the Company had also retained Pearl Meyer&nbsp;&amp; Partners to assist the Company in understanding the current environment and trends relating to compensation
within the homebuilding industry in general. The Compensation Committee was advised of this engagement and had an opportunity to review the scope of this assignment, which was more limited than the
work Pearl Meyer&nbsp;&amp; Partners performed for the Compensation Committee with respect to the CEO and CFO employment agreements. The specific purpose of this study is to understand the nature and
levels of compensation paid to senior management with day-to-day responsibility for homebuilding operations (for example, regional and division presidents). </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
consultants were hired during 2007 to assist in any compensation-related matters, as there were no modifications to existing named executive officers ("NEO") employment agreements. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Role of Executives in the Compensation Setting Process.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee determines executive compensation with
respect to the CEO and CFO independent of management. With respect to determining compensation of the other NEOs, the CEO and our human resources department prepare and present information and
recommendations to the Compensation Committee for review, consideration and approval. With respect to compensation of non-NEOs, the Compensation Committee functions in an oversight role as
these decisions are considered the responsibility of management. For example, the Compensation Committee reviews the compensation for various non-NEOs to evaluate reasonableness in
comparison to industry standards and may make recommendations to the CEO regarding changes in compensation. The Compensation
Committee approves all grants of equity-based awards. For the NEOs, equity award grants in most cases are determined based on an employment agreement between the Company and the NEO and may be
adjusted upwards based on the Compensation Committee's review of the NEO's performance and competitive market factors. For non-NEOs, management is responsible for recommending to the
Compensation Committee the persons to receive grants and the nature and size of the proposed award. Because management is responsible for the day-to-day operation of the
Company, the Compensation Committee believes that management is in the best position to make this recommendation. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation Committee Interlocks and Insider Participation.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;None of the members of the Executive Compensation Committee is,
or has been, an employee of Meritage or any of its subsidiaries. There were no interlocking relationships between Meritage and other entities that might affect the determination of the compensation of
Meritage's executive officers. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I>Nominating/Governance Committee  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors has established a Nominating/Governance Committee, which directly reports to the Board of Directors and is responsible for: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>identifying
individuals qualified to become Board members and recommending director nominees for the next annual meeting of stockholders,
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>developing
and recommending Corporate Governance Principles and Practices applicable to us,
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>and
addressing such items as management succession, including policies and principles for our CEO selection and performance review and succession in the event of an
emergency or retirement of the CEO,
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>leading
the Board of Directors in its annual review of the Board's performance, and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>recommending
nominees for the Executive Compensation Committee and Audit Committee. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>23</FONT></P>

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<UL>
<UL>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Nominating/Governance Committee has the sole authority to retain and terminate any search firm used to identify director candidates, including sole authority to approve the search
firm's fees and other retention terms. The Nominating/Governance Committee operates under a written charter, which is available on our website at </FONT> <FONT SIZE=2><I>www.meritagehomes.com</I></FONT><FONT SIZE=2> and we will provide a print copy
to any stockholder upon request. Each member of the Nominating/Governance Committee meets the
independence requirements of the NYSE. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I>Director Nomination Process  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stockholder Nominees.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The policy of the Nominating/Governance Committee is to consider properly submitted stockholder
nominations for candidates for membership on the Board of Directors as described below. In evaluating such nominations, the Nominating/Governance Committee seeks to achieve a balance of knowledge,
experience and capability on the Board and to address the membership qualifications and criteria described below. Any stockholder nominations proposed for consideration by the Nominating/Governance
Committee must include the nominee's name and qualifications for Board membership and should be submitted to: </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>Meritage
Homes Corporation<BR>
17851 North 85<SUP>th</SUP>&nbsp;Street<BR>
Suite&nbsp;300<BR>
Scottsdale, Arizona 85255<BR>
Attn: Corporate Secretary </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Secretary will forward all nominations to the Nominating/Governance Committee. In addition, our bylaws permit stockholders to nominate directors for consideration at an annual
stockholder meeting. For a description of the process for submitting such nominations, and the deadline to propose actions for consideration at next year's annual meeting, please see "Stockholder
Proposals" on page&nbsp;53 of this proxy statement. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Director Qualifications.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Nominating/Governance Committee will evaluate prospective nominees using the standards and
qualifications set forth in our Corporate Governance Principles and Practices. Prospective nominees should have the highest professional and personal ethics and values, as well as broad experience at
the policy-making level in business, government, education or public interest. They should be committed to enhancing stockholder value and should have sufficient time to devote to carrying out their
duties and to provide insight based upon experience, talent, skill and expertise appropriate for the Board. Each prospective nominee must be willing and able to represent the interests of our
stockholders. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Identifying and Evaluating Nominees for Directors.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Nominating/Governance Committee utilizes a variety of methods for
identifying and evaluating nominees to serve as directors. The Nominating/Governance Committee assesses the current composition of the Board of Directors, the balance of management and independent
directors and the need for Audit Committee expertise in its evaluation of prospective nominees. In the event that vacancies are anticipated, or otherwise arise, the Nominating/Governance Committee may
seek recommendations from current Board members, professional search firms, outside legal, accounting and other advisors, or stockholders in order to locate qualified nominees. After completing its
evaluation, the Nominating/Governance Committee will make a recommendation to the full Board of Directors as to the persons who should be nominated by the Board of Directors, and the Board will
determine the nominees after considering such recommendations. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I>Executive Sessions of Independent Directors  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Corporate Governance Principles and Practices dictate that the non-management members of the Board of Directors will meet in executive session at
least quarterly outside the presence of directors </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>24</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>that
are employees or officers of the Company. The non-management directors met in executive session six times during 2007. Peter Ax is our Lead Independent Director and presides over
these executive session meetings. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Code of Ethics  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are committed to conducting business consistent with the highest ethical and legal standards. The Board of Directors has adopted a Code of Ethics, which is
applicable to all employees, including our CEO and our CFO and our directors. The Code is available on our website at </FONT><FONT SIZE=2><I>www.meritagehomes.com</I></FONT><FONT SIZE=2> and we will
provide a print copy to any stockholder upon request. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Communications with the Board of Directors  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interested persons may communicate with the Board of Directors by writing to our Lead Independent Director at the address set forth on page&nbsp;24. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="di77301_continuing_director_information"> </A>
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<BR></FONT><FONT SIZE=2><B>CONTINUING DIRECTOR INFORMATION    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Meritage divides its Board of Directors into two classes, one of which is up for election this year, as set forth under "Election of Directors (Proposal
No.&nbsp;1)." The following sets forth biographical information regarding each member of the class of directors whose term will continue until our 2009 Annual Meeting of Stockholders. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Peter L. Ax, 49,</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;has been a director since September 2000 and is the managing partner of Phoenix Capital Management, a
merchant banking firm. Mr.&nbsp;Ax is the former chairman and chief executive officer of SpinCycle,&nbsp;Inc., a publicly held consolidator and developer of coin-operated Laundromats.
Previously, Mr.&nbsp;Ax served as head of the Private Equity Division and senior vice president of Lehman Brothers in New York. Mr.&nbsp;Ax is also on the board of directors of Medit
Marketing,&nbsp;Inc. and Mobility Electronics and serves on the Advisory Board of Directors of Cascadia Capital, a Seattle based investment banking and merchant banking firm. Mr.&nbsp;Ax holds an
M.B.A. from the Wharton School at the University of Pennsylvania and a law degree from the University of Arizona, and has been a certified public accountant. He has also been an accounting instructor
at the Wharton School. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Robert G. Sarver, 46,</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;has been a director since December 1996, and is the chairman and chief executive officer of Western
Alliance Bancorporation, a director of Skywest Airlines, and the managing partner of the Phoenix Suns basketball team. He was the chairman and chief executive officer of California Bank&nbsp;&amp; Trust
from 1998 to 2001. From 1995 to 1998, he served as chairman of Grossmont Bank. In 1990, Mr.&nbsp;Sarver co-founded and currently serves as the executive director of Southwest Value
Partners and Affiliates, a real estate investment company. Mr.&nbsp;Sarver founded the National Bank of Arizona and was its President until its acquisition by Zions Bancorporation in 1994.
Mr.&nbsp;Sarver has been a certified public accountant. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gerald W. Haddock, 60,</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;was appointed as a director in January 2005. Mr.&nbsp;Haddock is the founder of Haddock
Enterprises,&nbsp;LLC and formerly served as President and CEO of Crescent Real Estate Equities, a diversified real estate investment trust. He is currently a Director and Audit Committee Chairman
of ENSCO International,&nbsp;Inc., a leading global offshore oil and gas drilling service company, and a director of Cano Petroleum,&nbsp;Inc., a Fort Worth-based producer of crude oil and natural
gas that specializes in enhanced recovery technology. He also serves on the Board of Directors of the Baylor Foundation of Baylor University and on the Board of Trustees of the M.D. Anderson Proton
Therapy Education and Research Foundation. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>25</FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
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<A NAME="toc_dk77301_1"> </A>
<BR></FONT><FONT SIZE=2><B>COMPENSATION DISCUSSION AND ANALYSIS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>The following discussion and analysis should be read in conjunction with the "Summary Compensation Table" and related tables that are
presented immediately below.</I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Introduction and Summary  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The purpose of this compensation discussion and analysis ("CD&amp;A") is to provide information about each material element of compensation that we pay or award to,
or that is earned by, our NEOs. For our 2007 fiscal year, our named executive officers were: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Steven
J. Hilton, our Chairman and Chief Executive Officer;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Larry
W. Seay, our Executive Vice President and Chief Financial Officer;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>C.
Timothy White, our Executive Vice President, General Counsel and Secretary; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Steven
Davis, our Executive Vice President&#151;National Homebuilding Operations. </FONT></DD></DL>
</UL>
<BR>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sandra
R. A. Karrmann, our former Executive Vice-President and Chief Human Resources Officer, is also an NEO because she served in the above-described capacities until
mid-2007. This CD&amp;A addresses and explains the numerical and related information contained in the summary compensation tables and includes actions regarding executive compensation that
occurred after the end of our 2007 fiscal year, including the award of bonuses related to 2007 performance, and the adoption of any new, or the modification of any existing, compensation programs. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I>The Executive Compensation Committee  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee of Meritage's Board of Directors is currently comprised of three members of the Board, each of whom is designated to be "independent"
under the Corporate Governance Standards of the NYSE, a "non-employee director" under Section&nbsp;16 of the Exchange Act and an "outside director" for purposes of Section&nbsp;162(m)
of the Code. The members of the Committee are Raymond Oppel (Chairman), Peter L. Ax and Gerald W. Haddock. Generally, the Compensation Committee Chairman is in charge of setting the Compensation
Committee's meetings and calendar, as well as the agenda of each meeting. For additional information regarding the Compensation Committee, please see "The Board and Board Committees" information
contained under the heading "Corporate Governance Principles and Board Matters" in this proxy statement. In addition, we also refer you to the Executive Compensation Committee Report included in this
proxy statement at page&nbsp;48. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B><I>Significant Compensation Events in 2007  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As discussed in more detail in this CD&amp;A section, Sandra R. A. Karrmann, the Company's former Executive Vice President and Chief Human Resources Officer, resigned
in August 2007. As provided for in the employment agreement between the Company and Ms.&nbsp;Karrmann, this action triggered the re-payment of $100,000 of her hiring bonus paid in 2005. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, we amended and restated our employment and change of control agreements with Steven J. Hilton and Larry W. Seay, our CEO and CFO, respectively, in early January 2007. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Overview  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Compensation Philosophy and Objectives  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our executive compensation program is designed to drive and reward superior corporate performance both annually and over the long term while simultaneously
striving to be externally competitive. We continually review our executive compensation program to ensure it reflects good </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>26</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>governance
practices and is in the best interests of stockholders, while meeting the following core objectives: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Pay for Performance</I></FONT><FONT SIZE=2>&#151;A substantial portion of the total compensation for each NEO is intended to be variable and
delivered on a pay-for-performance basis. The terms of the performance-based compensation contemplated in each NEO's employment agreement is first based upon an assessment of
external market data to ensure that the compensation formula is competitive relative to the compensation paid by companies with which we compete for executive talent. This compensation is derived
based on (i)&nbsp;the performance of the Company as a whole, as measured against our peer group and (ii)&nbsp;the officer's role in the attainment of the Company's performance.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Stock Ownership</I></FONT><FONT SIZE=2>&#151;We are committed to utilizing our compensation program to increase executive stock ownership over
time. We believe that equity ownership directly aligns the interests of our executives with those of our stockholders and helps to focus our executives on long-term stockholder value
creation. Commencing in 2007, we have begun to award both stock options and restricted stock to our NEOs as we believe the use of restricted stock provides an incentive to continue to increase
long-term stockholder value, even during periods of declining stock prices. We believe the granting of both options and restricted stock are important retention tools and are widely used
in our industry.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2><I>Recruiting and Retention</I></FONT><FONT SIZE=2>&#151;Due to the competitive nature of our industry, we are committed to providing total
compensation opportunities that are competitive with, though not identical to, the practices of other large public homebuilders in our industry. We intend for our compensation program to be
sufficiently aligned with industry practices so that we can continue to attract and retain outstanding executives who are motivated to help us achieve our mission. </FONT></DD></DL>
</UL>
<BR>

<P style="font-family:times;"><FONT SIZE=2><B><I>Compensation Peer Group  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We compete with homebuilding companies of various sizes for executive talent, and therefore the Compensation Committee generally reviews composite market data
reflecting the market median compensation paid to similarly situated executives. While market data is an important factor considered by the Compensation Committee when setting compensation, it is only
one of multiple factors, and the amount paid to each executive may be more or less than the composite market median based on the performance of the Company and the executive, the roles and
responsibilities of the executive, experience level of the individual, internal equity and other factors that the Compensation Committee deems important. As collectively determined by the Compensation
Committee and Pearl Meyer&nbsp;&amp; Partners, for 2006, our compensation peer group for benchmarking the CEO and CFO compensation consisted of the following companies: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="76%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TD WIDTH="32%" style="font-family:times;"><FONT SIZE=2>Beazer Homes USA,&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="32%" style="font-family:times;"><FONT SIZE=2>KB Home</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="32%" style="font-family:times;"><FONT SIZE=2>Pulte Homes,&nbsp;Inc.</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="32%" style="font-family:times;"><FONT SIZE=2>Brookfield Homes Corporation</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="32%" style="font-family:times;"><FONT SIZE=2>Lennar Corporation</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="32%" style="font-family:times;"><FONT SIZE=2>The Ryland Group,&nbsp;Inc.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="32%" style="font-family:times;"><FONT SIZE=2>Centex Corporation</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="32%" style="font-family:times;"><FONT SIZE=2>M.D.C. Holdings,&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="32%" style="font-family:times;"><FONT SIZE=2>Standard Pacific Corp.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="32%" style="font-family:times;"><FONT SIZE=2>Dominion Homes,&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="32%" style="font-family:times;"><FONT SIZE=2>M/I Homes,&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="32%" style="font-family:times;"><FONT SIZE=2>Technical Olympic USA,&nbsp;Inc.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="32%" style="font-family:times;"><FONT SIZE=2>D.R. Horton,&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="32%" style="font-family:times;"><FONT SIZE=2>NVR,&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="32%" style="font-family:times;"><FONT SIZE=2>Toll Brothers,&nbsp;Inc.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="32%" style="font-family:times;"><FONT SIZE=2>Hovnanian Enterprises,&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="32%" style="font-family:times;"><FONT SIZE=2>Orleans Homebuilders,&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="32%" style="font-family:times;"><FONT SIZE=2>WCI Communities,&nbsp;Inc.</FONT></TD>
</TR>
</TABLE>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, in 2006 we considered the CEO's and CFO's compensation when compared against the compensation of CEOs and CFOs across all industries for companies with annual revenues
between $2.5&nbsp;billion and $3.5&nbsp;billion, which resulted in 135 companies for CEO data and 119 companies for CFO data. We also used market data and other available information for the
benchmarking of our other NEOs. We have not revised our CEO and CFO compensation packages since early 2007. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>27</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B>Compensation Program and Payments  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The key components of our executive compensation program are base salary, annual incentive compensation and long-term incentive compensation. In
addition, our NEOs have the opportunity to participate in our company-wide 401(k) plan and to receive certain personal benefits, as described below. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B><I>Base Salary  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The purpose of the base salary is to provide a fixed amount of cash compensation that is not variable and is generally competitive with market practices.
Consistent with industry practice and our pay-for-performance objective, the base salary for each of our NEOs accounts for a relatively small portion of their overall
compensation. As compared to our compensation peer group, we target our NEO salaries to be in the 40<SUP>th</SUP>&#150;60<SUP>th</SUP>&nbsp;percentile. We believe the NEO base salaries
are appropriate based on the officers' roles, responsibilities, experience and contributions to the company, as well as market data. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B><I>Annual Incentive Compensation  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with the terms of each NEO's employment agreement, each NEO is eligible for additional annual incentive compensation. As compared to our peer group,
we target our NEO incentive compensation to be in the 60<SUP>th</SUP>&#150;75<SUP>th</SUP>&nbsp;percentile. The incentive compensation is designed to comply with the requirements of
Section&nbsp;162(m) of the Code to ensure the tax deductibility of incentive compensation paid to our named executive officers. Under Section&nbsp;162(m), we cannot deduct compensation in excess
of $1&nbsp;million that is paid to an NEO in any year unless the compensation qualifies as "performance-based" compensation under Section&nbsp;162(m). </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
believe investors within the public homebuilder industry look to several key financial metrics when valuing companies. These metrics include EBITDA, return on assets and return on
equity. For our CEO and CFO, we have structured the cash incentive component of their compensation to result in the possible award of a percentage of EBITDA, as defined below. The level of the cash
incentive award is based upon our financial performance compared to other public homebuilders in multiple metrics. If
the Company compares favorably (e.g.,&nbsp;the top half) in each metric (i.e.,&nbsp;return on assets and return on equity), the executive is eligible for the maximum award, subject to formal
Compensation Committee approval. Where the Company's performance falls in the lower levels of the metric, the executive is entitled to a lower, or no, bonus, also subject to formal Compensation
Committee approval. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
our other NEOs, we have structured the cash incentive component of the executive's compensation to provide for a bonus generally based on our financial performance and the
executive's achievement of selected function area/individual performance goals. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
specific details of each NEO's 2007 incentive compensation are further detailed in this proxy under the section "Compensation Discussion and Analysis&#151;Employment
Agreements." </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
Meritage did not generate net income or EBITDA as defined for compensation calculation purposes during 2007, the Compensation Committee concluded that no annual incentive payments
should be made to Messrs.&nbsp;Hilton and Seay in accordance with the terms of their respective employment agreements. Following discussions with the CEO, the Compensation Committee assessed the
contributions of Mr.&nbsp;Davis and Mr.&nbsp;White, and a discretionary bonus was approved for each by the Compensation Committee in January 2008, as governed by their employment agreements. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>28</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><I>Compensation Determinations and Relevant Factors  </I></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When determining the amount (or exclusion of) bonus and incentive compensation to be paid for 2007, the Compensation Committee reviewed and considered the
following information: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Feedback
from the full Board of Directors (excluding the CEO) regarding the performance of the CEO for 2007;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
financial and stock performance of the Company, comparable public companies and other companies in our industry with which we compete, including the total relative
stockholder return of our Company and our competitors; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
recommendations of the CEO regarding the bonus and incentive compensation to be paid to each NEO for 2007, which the Compensation Committee discussed with the CEO. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B><I>Long-Term Incentive Awards  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term incentives are intended to provide compensation opportunities based on the creation of stockholder value and an increase in our stock price.
The upside potential of stock option awards will be realized by the NEOs only if our stock price performance improves over the vesting period and/or the term of the awards. Stock options granted to
our NEOs generally have a five-year pro-rata vesting schedule and a seven-year term. Commencing in 2007, we also awarded our NEOs restricted stock, which have a
either a three-year pro-rata or cliff vesting schedule. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
connection with our equity awards, we have also adopted equity ownership requirements as further discussed below in the section "Compensation Discussion and
Analysis&#151;Compensation Program and Payments&#151;Security Ownership Requirements." </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Compensation Committee believes that stock options and/or restricted stock awards provide a strong long-term incentive for our NEOs (and other officers and employees)
that, along with their security ownership, help to align the interests of management with our investors. Accordingly, competitive equity-based awards are provided for in the employment agreements with
our NEOs. The Compensation Committee believes that these equity-based awards provide the opportunity for our executives to benefit from strong equity performance and, particularly in the case of stock
options, subjects the executives to downside risk from weak equity performance as compensation provided in the form of stock options will have no value if the market price of our stock is not in
excess of the strike price of the stock options. The Company and the Compensation Committee also believe that an appropriate mix of cash compensation and non-cash compensation in the form
of stock options and restricted stock awards benefits us because these non-cash compensation awards do not require the use of our working capital. The Compensation Committee is mindful of
the fact that stock options and restricted stock awards represent an expense under generally accepted accounting principles and a cost to the Company and its stockholders in the form of dilution.
Accordingly, we seeks to achieve an appropriate balance between cash and non-cash compensation such that management is appropriately incentivized, our working capital is minimally affected
and our stockholders do not experience undue dilution. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I>Other Compensation  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee does not believe in the extensive use of perquisites as a component of executive compensation. Under the CEO's existing employment
agreement, the Company eliminated all benefits relating to personal use of charter aircraft. The Compensation Committee believes that the perquisites provided to our NEOs (above those received by all
employees or officers in general) are limited, but help maintain the competitiveness of our compensation package as compared to our peer companies. The types of perquisites we provide to our NEOs
generally consists of car allowances, enhanced life and disability insurance and annual physicals. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>29</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B><I>Taxation Considerations  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;162(m) of the Code limits the deductibility of executive compensation paid by publicly held corporations to $1&nbsp;million for each NEO named in
this proxy statement. The $1&nbsp;million limitation generally does not apply to compensation that is pursuant to a performance-based plan approved by stockholders. Our policy is to comply with the
requirements of Section&nbsp;162(m) and generally maintain deductibility for all executive compensation, although we reserve the right, as do most public companies, to make
non-deductible payments where we determine it is in the best interests of Meritage and its stockholders. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
the 2006 Annual Meeting of Stockholders, our stockholders approved the 2006 Stock Incentive Plan. The purpose of the 2006 Incentive Plan is to provide for annual incentive awards to
the Company's key executives, including the NEOs, and it is the vehicle through which we pay our cash performance bonuses. The 2006 Stock Incentive Plan is administered by the Compensation Committee
and provides for cash awards payable to executives upon the attainment of certain predetermined performance goals for the Company. It is our intent that awards made pursuant to the 2006 Stock
Incentive Plan qualify as deductible compensation under Section&nbsp;162(m) of the Code. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
current employment agreement for our CEO contemplates the payment of a base salary and benefits that will likely exceed the limitations provided for under Section&nbsp;162(m). The
Compensation Committee believes that the excess non-deductible amounts that will be paid to our CEO over the $1&nbsp;million limitation will primarily be due to the value assigned to
perquisites, and not due to the granting of additional awards at the Compensation Committee's discretion. It is expected that the Section&nbsp;162(m) excess will be less than $100,000 for 2007 for
all NEOs, resulting in a lost tax deduction that is not material. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I>Security Ownership Requirements  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2006, we adopted security ownership requirements for our directors and certain executive officers. The Board of Directors believes that these guidelines align
the interests of our directors and executive officers with those of stockholders. Our directors and executive officers are required to comply with the following ownership guidelines: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Directors,
two times annual director fees (exclusive of committee or lead director fees);
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>CEO,
four times base salary;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>CFO,
two times base salary;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>General
Counsel, two times base salary; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Other
executive officers, as required by the Board of Directors. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
policy provides for a reasonable transition period such that each director and covered officer needs to comply with the guidelines by April&nbsp;30, 2008. In the case of the
appointment of a new officer or director, such person is expected to comply with the requirements within three years of the date of appointment. In order to enable our directors and officers to
prudently manage their personal financial matters, our policy provides that once compliance is obtained, subsequent changes in stock price will not affect the person's compliance with the guidelines.
For purposes of the security ownership requirement, stock options and non-vested restricted stock are not considered owned. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I>Stock Options and Other Equity-Based Awards  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Meritage has traditionally granted stock options to directors, senior executive officers and other employees to provide a means for incentive compensation and to
align the interests of management with the interest of Meritage's stockholders. Prior to 2006, the Company did not traditionally make </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>30</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>other
equity-based awards, such as restricted stock. At the 2006 Annual Meeting of Stockholders, the Company's stockholders approved the 2006 Stock Incentive Plan. The 2006 Stock Incentive Plan
contemplates and allows for a variety of equity-based awards, including stock options, restricted stock, stock appreciation rights and other performance-based awards. Since the approval of the 2006
Stock Incentive Plan, the Company has made a limited number of restricted stock awards. Management and the Compensation Committee believe that, in the future, the Company may expand the use of
restricted stock awards as a means of providing incentive compensation and reduce the Company's sole reliance on stock options, bringing it more in line with industry trends. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior
to 2006, Meritage did not have a formal policy with respect to the timing of stock option awards, although our general practice was to make one main grant on an annual basis. This
annual grant usually occurred during the first half of the year and generally covered awards to the existing directors, executive officers and other officers and employees selected to receive an
award. It was also our practice to make awards during the year from time to time in situations involving newly hired executives and employees, or the promotion of existing executives or employees. In
response to the new executive compensation disclosure rules adopted by the SEC and other well-publicized stock option dating concerns, the Board of Directors of Meritage in 2006 approved
comprehensive policies relating to the granting of stock options and other equity-based awards. Following is a summary of key aspects of our new policies: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>All
stock option grants, restricted stock awards and other equity based awards ("stock-based grants") must be approved by the Compensation Committee.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>All
stock-based grants will be approved at formal meetings (including telephonic) of the Compensation Committee.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
date for determining the strike price and similar measurements will be the date of the meeting (or a date shortly after the meeting) or, in the case of an employee,
director or consultant not yet hired, appointed or retained, respectively, the subsequent date of hire, appointment or retention, as the case may be.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
annual stock-based grant shall be approved at a regularly scheduled meeting of the Compensation Committee during the first part of the year, but after the annual
earnings release. We believe that coordinating the main annual award grant after our annual earnings release will generally result in this grant being made at a time when the public is in possession
of all material information about us.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
customary annual grant to executive officers and directors shall occur at the same time as the customary annual grant to other employees.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
Company shall not intentionally grant stock-based awards before the anticipated announcement of materially favorable news or delay the grant of stock-based awards until
after the announcement of materially unfavorable news.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
Compensation Committee will approve stock-based grants only for persons specifically identified at the meeting by management. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition to our 2007 annual grant completed January&nbsp;29, 2007, we elected to accelerate our 2008 annual grant to December 2007 to provide additional long term incentives to our
employees and management team in anticipation of lower cash bonus payments. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Tender Offer  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In October 2007, we announced a Company-wide stock option tender offer to purchase, for a one-time cash payment of $1.50 per option, all
stock options granted to employees and directors between January&nbsp;1, 2005 and December&nbsp;31, 2006 with a strike price in excess of $45.00. A total of </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>31</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>665,000
options were eligible for repurchase. The tender offer expired October&nbsp;29, 2007 with all 665,000 options tendered for an aggregate cash payment of $997,500. We have noted below under
the heading "Other Benefits" in each discussion of CEO and NEO compensation what payments were made in connection with the tender offer. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Employment Agreements  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have entered into an employment agreement with the CEO and each NEO, and the Compensation Committee reviewed and approved the terms of each agreement. The key
compensation elements within each agreement are discussed below. In addition to these compensation elements, these employment agreements also provide severance benefits to each executive upon certain
termination events. These severance provisions are discussed later in this proxy statement under the heading "Compensation Discussion and Analysis&#151;Potential Payments Upon Termination or
Change-of-Control." </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I>Steven J. Hilton, CEO  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective January&nbsp;1, 2007, the Company and Steven J. Hilton entered into an amended and restated employment agreement. The new employment agreement expires
on December&nbsp;31, 2008 and is subject to automatic one year renewal provisions, unless on or before September&nbsp;15<SUP>th</SUP>&nbsp;prior to any expiration, either Mr.&nbsp;Hilton or
the Company notifies the other that it wishes to terminate the agreement. The employment agreement provides Mr.&nbsp;Hilton with a base salary of $1,017,500 per year, which may be adjusted from time
to time, provided that it may not be reduced without Mr.&nbsp;Hilton's consent. The employment agreement also provides that Mr.&nbsp;Hilton is entitled to reimbursement of reasonable and customary
business expenses, payments to purchase a $5&nbsp;million term life insurance policy, payments to purchase disability insurance providing for monthly benefit payments of approximately $20,000,
participation in our Executive Supplemental Savings Plan (which enables deferred compensation in excess of 401(k) limitations), and use of a Company-provided automobile. Although Mr.&nbsp;Hilton's
employment agreement provides that he is entitled to use of charter aircraft for business purposes, Mr.&nbsp;Hilton was not granted any personal use of charter aircraft. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
the employment agreement, Mr.&nbsp;Hilton will receive an option to acquire 90,000 shares of Meritage common stock at an exercise price equal to the closing price on the date of
grant. This option shall have a seven year term and shall vest ratably over five years from the date of grant. In addition, Mr.&nbsp;Hilton will be granted 18,000 restricted shares in 2007. These
shares will vest in equal increments over the three-year period beginning on the anniversary of the date of grant. After 2007, Mr.&nbsp;Hilton may receive equity-based awards in such
amounts and forms as the Committee determines in its sole discretion. All options or other equity-based awards granted to Mr.&nbsp;Hilton will be made pursuant to our policies governing stock-based
grants, as discussed elsewhere in this proxy statement. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Hilton's
employment agreement also provides for an annual cash incentive bonus based on the Company's attainment of defined performance objectives. In 2007, Mr.&nbsp;Hilton
is entitled to a bonus equal to 0.825% of EBITDA if the Company's return on assets is in the top half of public homebuilders having revenues of $500&nbsp;million or more, and an additional 0.825% of
EBITDA if the Company's return on equity is in the top half of these public homebuilders. If either measurement falls within the 33<SUP>rd</SUP>&nbsp;to 49<SUP>th</SUP>&nbsp;percentile, the
bonus shall be 0.5363% of EBITDA for the applicable measurement,
and if either measurement falls below the 33% threshold, then there will not be any formula bonus paid with respect to such measurement. The Compensation Committee has complete discretion to act
reasonably to increase or reduce the amount of this bonus component (including reducing the bonus to zero) or provide separate supplemental awards, regardless if the Company meets the goals discussed
above. The cash incentive bonus component shall be paid no later than March&nbsp;15 of the following year, and it shall be paid pursuant to the 2006 Stock Incentive Plan to the extent possible. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>32</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
employment agreement also includes a claw-back provision requiring the recovery by the Company of all or part of prior bonuses in the event the performance measure used
to calculate the bonus is restated downward as a result of Mr.&nbsp;Hilton's willful misconduct or gross negligence. We may recover any such claw-backs through an offset to future awards
payable under the employment agreement, or from Mr.&nbsp;Hilton directly. The agreement also includes non-compete and non-solicit covenants as well as a requirement for
Mr.&nbsp;Hilton to provide post-termination consulting services to us at our request. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I>Larry W. Seay, Executive Vice President and Chief Financial Officer  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective January&nbsp;1, 2007, the Company and Larry W. Seay entered into an amended and restated employment agreement. The employment agreement expires on
December&nbsp;31, 2008 and is subject to automatic one year renewal provisions, unless on or before September&nbsp;15<SUP>th</SUP>&nbsp;prior to any expiration, either Mr.&nbsp;Seay or the
Company notifies the other that it wishes to terminate the agreement. The employment agreement provides Mr.&nbsp;Seay with a base salary of $450,000 per year, which may be adjusted from time to
time, provided that it may not be reduced without Mr.&nbsp;Seay's consent. The employment agreement also provides that Mr.&nbsp;Seay is entitled to reimbursement of reasonable and customary
business expenses, a $1,200 per month automobile allowance and an annual benefit of up to $20,000 to provide Mr.&nbsp;Seay with a $3&nbsp;million term life insurance policy, consistent with our
practice for other NEOs. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
the employment agreement, Mr.&nbsp;Seay will receive an option to acquire 36,667 shares of Meritage common stock at an exercise price equal to the closing price on the date of
grant. This option shall have a seven year term and shall vest ratably over five years from the date of grant. In addition, Mr.&nbsp;Seay will be granted 7,333 restricted shares in 2007. These
shares will vest in equal increments over the three-year period beginning on the anniversary of the date of grant. After 2007, Mr.&nbsp;Seay may receive equity-based awards in such
amounts and forms as the Board of Directors determines in its sole discretion. All options or other equity-based awards granted to Mr.&nbsp;Seay will be made pursuant to our policies governing
stock-based grants, as discussed elsewhere in this proxy statement. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Seay's
employment agreement also provides for an annual cash incentive bonus based on the Company's attainment of defined performance objectives. In 2007, Mr.&nbsp;Seay is
entitled to a bonus equal to 0.20% of EBITDA is the Company's return on assets is in the top half of public homebuilders having revenues of $500&nbsp;million or more, and an additional 0.20% of
EBITDA if the Company's return on equity is in the top half of these public homebuilders. If either measurement falls within the 33<SUP>rd</SUP>&nbsp;to 49<SUP>th</SUP>&nbsp;percentile, the
bonus shall be 0.13% of EBITDA for the applicable measurement, and if either measurement falls below the 33% threshold, then there will not be any formula bonus paid with respect to such measurement.
The Compensation Committee has complete discretion to act reasonably to increase or reduce the amount of this bonus component (including reducing the bonus to zero) or provide separate supplemental
awards, regardless if the Company meets the goals discussed above. The cash incentive bonus component shall be paid no later than March&nbsp;15 of the following year, and it shall be paid pursuant
to the 2006 Stock Incentive Plan to the extent possible. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
employment agreement also includes a claw-back provision requiring the recovery by the Company of all or part of prior bonuses in the event the performance measure used
to calculate the bonus is restated downward as a result of Mr.&nbsp;Seay's willful misconduct or gross negligence. The Company may recover any such claw-backs through an offset to future
awards payable under the employment agreement, or from Mr.&nbsp;Seay directly. The agreement also includes non-compete and non-solicit covenants as well as a requirement for
Mr.&nbsp;Seay to provide post-termination consulting services to us at our request. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>33</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B><I>C. Timothy White, Executive Vice President, General Counsel and Secretary  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has an employment agreement with C. Timothy White that expired on December&nbsp;31, 2007 and was renewed through December&nbsp;31, 2008 under an
automatic one year renewal option. The agreement provides for a base salary for 2007 of $525,000 with an increase of 5% on January&nbsp;1 of any renewal term. Mr.&nbsp;White is entitled to an
annual cash incentive bonus for 2006 and 2007 equal to 0.1125% of EBITDA. Mr.&nbsp;White's employment agreement also contemplates that he will receive an annual option grant to acquire 15,000 shares
of common stock at an exercise price equal to the fair market value on the date of grant. In addition, Mr.&nbsp;White is entitled to a $1,200 per month automobile allowance, $3&nbsp;million of
term life insurance coverage and such other benefits as are regularly provided by the Company to its senior management. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B><I>Steven M. Davis, Executive Vice President&#151;National Homebuilding Operations  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In October 2006, the Company entered into an employment agreement with Steven M. Davis. This agreement has a two-year term and expires on
October&nbsp;16, 2008, subject to automatic one-year renewal options. The agreement provides for a base salary of $400,000 with an increase of 5% on November&nbsp;1, 2007 and
November&nbsp;1 of any renewal term. Mr.&nbsp;Davis was entitled to a bonus in 2006 of $400,000, subject to full or partial repayment if Mr.&nbsp;Davis is terminated prior to
September&nbsp;16, 2009. For 2007 and forward, Mr.&nbsp;Davis is entitled to a performance-based incentive bonus, which is targeted to be between 0.25% and 0.33% of EBITDA. The payout range will
be based on Mr.&nbsp;Davis' achievement of specific goals to be mutually agreed upon between Mr.&nbsp;Davis and the Company's CEO, subject to approval by the Compensation Committee.
Mr.&nbsp;Davis' employment agreement also contemplates that he will receive an annual option grant to acquire 15,000 shares of common stock at an exercise price equal to the fair market value on the
date of grant. In addition, Mr.&nbsp;Davis is entitled to a $1,250 per month automobile allowance and a Company-paid annual physical at a first class facility. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I>Sandra R.A. Karrmann, Executive Vice President and Chief Human Resources Officer  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In September 2006, the Company entered into an employment agreement with Sandra R.A. Karrmann, with a two year term scheduled to expire on September&nbsp;26,
2008. Ms.&nbsp;Karrmann resigned in August 2007, triggering a repayment of $100,000 of her hiring bonus paid in 2005. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Discussion of CEO and NEO Compensation  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following is a discussion of the compensation paid in 2007 to the Company's CEO and NEOs. The cash incentive performance-based bonus component for our CEO, CFO
and General Counsel is based on percentage of "EBITDA." For purposes of determining the cash incentive performance-based bonuses for our executive officers discussed below, the Compensation Committee
has defined EBITDA as earnings before interest (comprised of interest expense and interest amortized to cost of sales), income taxes, depreciation, amortization and non-recurring financing
charges. The Compensation Committee believes that EBITDA is an appropriate measure for measuring financial performance because EBITDA is used by management to analyze and compare Meritage with other
homebuilding companies on the basis of operating performance and the Compensation Committee believes it is a financial measure widely used by investors and analysts in the homebuilding industry. Thus,
the Compensation Committee believes that motivating management to achieve high levels of EBITDA aligns management's interest with the interest of our stockholders. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>CEO Compensation  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Meritage's CEO, Steven J. Hilton, was compensated in 2007 pursuant to the terms of his employment agreement, which provides for a base salary, a bonus based on
Company performance, stock options, and other customary executive benefits. Under this agreement, a substantial portion of Mr.&nbsp;Hilton's potential compensation is performance-based to align his
goals and efforts with the interests of our stockholders. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Salary.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Hilton was paid a base salary of $1,017,500 in 2007. </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Options.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In 2007, Mr.&nbsp;Hilton was granted options to acquire 75,160 shares of our common stock at an exercise price
equal to the closing price of our common stock on the date of grant. Additionally, Mr.&nbsp;Hilton was granted 18,000 restricted shares. These grants were consistent with the terms of his employment
agreement. The total options granted were less than the 90,000 contemplated in his employment agreement due to annual granting limit maximums established by the 2006 Stock Incentive Plan documents. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Performance-Based Bonus.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;For 2007, the Compensation Committee determined that no performance-based bonus should be paid to
Mr.&nbsp;Hilton based on the parameters and formula reflected in his employment agreement. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Benefits.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company also provided to Mr.&nbsp;Hilton other benefits consistent with our normal executive employment
arrangements. These benefits are detailed in the All Other Compensation Table included in this proxy statement and in 2007 totaled less than $210,000, and include $150,000 Mr.&nbsp;Hilton was also
paid in connection with the Company-wide stock option tender offer discussed above. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
January&nbsp;2, 2008, Mr.&nbsp;Hilton was granted options to acquire 100,000 shares of our common stock at an exercise price equal to the closing price of our common stock on the
date of grant. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Other NEO Compensation  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following is a discussion of compensation paid during 2007 to the other NEOs named in this proxy statement. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Larry W. Seay, Executive Vice President and Chief Financial Officer.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Seay was compensated in 2007 pursuant to the
terms of his employment agreement, which provides for a base salary, a bonus based on Company performance, stock options, and other customary executive benefits. Under this agreement, a substantial
portion of Mr.&nbsp;Seay's potential compensation is performance-based to align his goals and efforts with the interests of our stockholders. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Salary.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Seay was paid a base salary of $450,000 in 2007. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Options.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In 2007, Mr.&nbsp;Seay was granted options to acquire 36,667 shares of our common stock at an exercise price equal
to the closing price of our common stock on the date of grant. Additionally, Mr.&nbsp;Seay was granted 7,333 restricted shares. These grants were consistent with the terms of his employment
agreement. In December 2007, the Compensation Committee approved a second 2007 grant to all eligible employees under which Mr.&nbsp;Seay was also granted 53,214 options to acquire shares of our
common stock at an exercise price equal to the closing price of our stock on the date of grant. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Performance-Based Bonus.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;For 2007, the Compensation Committee determined that no performance-based bonus for Mr.&nbsp;Seay
should be paid based on the parameters and formula reflected in his employment agreement. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Benefits.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We also provided to Mr.&nbsp;Seay other benefits consistent with our normal executive employment
arrangements and his previous employment agreement. These benefits are detailed in the All Other Compensation Table included in this proxy statement and in 2007 totaled less than $115,000, and include
$60,000 Mr.&nbsp;Seay was paid in connection with the Company-wide stock option tender offer discussed above. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
January&nbsp;2, 2008, Mr.&nbsp;Seay was granted options to acquire 36,786 shares of our common stock at an exercise price equal to the closing price of our common stock on the
date of grant. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Timothy White, Executive Vice President, General Counsel and Secretary.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;White was compensated in 2007 pursuant
to the terms of his employment agreement, which provides for a base </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>35</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=40,EFW="2184391",CP="MERITAGE HOMES CORP.",DN="1",CHK=75157,FOLIO='35',FILE='DISK133:[08ZAH1.08ZAH77301]DM77301A.;51',USER='RKING',CD='31-MAR-2008;13:47' -->
<A NAME="page_dm77301_1_36"> </A>
<BR>

<P style="font-family:times;"><FONT SIZE=2>salary,
a bonus based on Company performance, stock options and other customary executive benefits. Under this agreement, a portion of Mr.&nbsp;White's compensation was performance-based to align
his goals and efforts with the interests of our stockholders. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Salary.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;White was paid a base salary of $525,000 in 2007. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Options.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In 2007, Mr.&nbsp;White was granted options to acquire 15,000 shares of our common stock at an exercise price
equal to the closing price of our common stock on the date of grant. This grant was in accordance with his employment agreement. Additionally, Mr.&nbsp;White was granted 7,500 restricted shares. In
connection with the Company-wide December 2007 grant discussed above,
Mr.&nbsp;White was also granted 50,000 additional options to purchase our common stock, with an exercise price equal to the closing price of our stock on the date of grant. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Performance-Based Bonus.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;For 2007, the Compensation Committee approved a $450,000 discretionary bonus for Mr.&nbsp;White
based on recommendations from management, his performance evaluation and as a retention tool based on actions of other companies in our industry. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Benefits.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company also provided to Mr.&nbsp;White other benefits consistent with our normal executive employment
arrangements. These benefits are detailed in the All Other Compensation Table included in this proxy statement and in 2007 totaled less than $95,000, and include $52,500 Mr.&nbsp;White was paid in
connection with the Company-wide stock option tender offer discussed above. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Steven M. Davis, Executive Vice President&#151;National Homebuilding Operations.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Davis was compensated in
2007 pursuant to the terms of his employment agreement, which provides for a base salary, a bonus based on Company performance, stock options and other customary executive benefits. Under this
agreement, a portion of Mr.&nbsp;Davis's compensation was performance-based to align his goals and efforts with the interests of our stockholders. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Salary.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Davis was paid a base salary of $400,000 in 2007. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Options.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In 2007, Mr.&nbsp;Davis was granted options to acquire 15,000 shares of our common stock at an exercise price
equal to the closing price of our common stock on the date of grant. This grant was in accordance with his employment agreement. In connection with the Company-wide December 2007 grant
discussed above, Mr.&nbsp;Davis was granted 40,000 additional options to purchase our common stock, with an exercise price equal to the closing price of our stock on the date of grant. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Performance-Based Bonus.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;For 2007, the Compensation Committee approved a $250,000 discretionary bonus for Mr.&nbsp;Davis
based on recommendations from management, his performance evaluation and as a retention tool based on actions of other companies in our industry. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Benefits.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company also provided to Mr.&nbsp;Davis other benefits consistent with our normal executive employment
arrangements. These benefits are detailed in the All Other Compensation Table included in this proxy statement and in 2007 totaled less than $135,000, and include $22,500 Mr.&nbsp;Davis was paid in
connection with the Company-wide stock option tender offer discussed above. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sandra R.A. Karrmann, Former Executive Vice President and Chief Human Resources Officer.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Ms.&nbsp;Karrmann was compensated
during 2007 pursuant to the terms of her employment letter agreement, which provided for a base salary, a bonus based on the achievement of specified goals, a hiring bonus, stock options and other
customary executive benefits. Under this agreement, a portion of Ms.&nbsp;Karrmann's potential compensation was performance-based to align her goals and efforts with the interests of our
stockholders. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>36</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=41,EFW="2184391",CP="MERITAGE HOMES CORP.",DN="1",CHK=994308,FOLIO='36',FILE='DISK133:[08ZAH1.08ZAH77301]DM77301A.;51',USER='RKING',CD='31-MAR-2008;13:47' -->
<A NAME="page_dm77301_1_37"> </A>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Salary.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Ms.&nbsp;Karrmann was paid a base salary of $213,328 through her termination date in August 2007. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Options.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Under her employment agreement, in 2007 Ms.&nbsp;Karrmann was granted options to acquire 15,000 shares of our
common stock at an exercise price equal to the closing price of our common stock on the date of grant. She was also granted 3,500 restricted shares. All equity awards were terminated upon her
resignation. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hiring Bonus.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the terms of her employment letter agreement, Ms.&nbsp;Karrmann repaid $100,000 of her hiring
bonus upon her resignation. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Benefits.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Through the date of her resignation, the Company also provided to Ms.&nbsp;Karrmann other benefits
consistent with our normal executive employment arrangements. These benefits are detailed in the All Other Compensation Table included in this proxy statement and in 2007 totaled less than $30,000. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dm77301_2007_summary_compensation_table"> </A>
<A NAME="toc_dm77301_1"> </A>
<BR>

  </FONT>

<FONT SIZE=2><B>2007 Summary Compensation Table

    <BR>    </B></FONT>

</P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="14%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name and Principal Position<BR> </B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="4%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Year</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Salary<BR>
($)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="6%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Bonus<BR>
($)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="6%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Stock<BR>
Awards<BR>
($)(3)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Option<BR>
Awards<BR>
($)(5)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Non-Equity<BR>
Incentive<BR>
Plan<BR>
Compensation<BR>
($)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Changes in<BR>
Pension Value<BR>
and<BR>
Nonqualified<BR>
Deferred<BR>
Compensation<BR>
Earnings($)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>All<BR>
Other<BR>
Compensation<BR>
($)(7)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Total($)</B></FONT><BR></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=1>Steven J Hilton,<BR>
Chairman and CEO(1)</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2007<BR>
2006</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,017,500<BR>
1,017,500</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>205,233<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2,880,731<BR>
1,196,481</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&#151;<BR>
7,296,282</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>206,848<BR>
229,942</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>4,310,312<BR>
9,740,205</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=1><BR>
Larry W. Seay,<BR>
EVP and CFO(2)</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
2007<BR>
2006</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
450,000<BR>
303,877</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
83,610<BR>
10,449</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
1,207,531<BR>
451,734</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
1,768,796</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
2,210<BR>
3,574</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR><BR>(6)</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
113,735<BR>
40,137</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
1,857,086<BR>
2,578,567</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=1><BR>
C. Timothy White, EVP,<BR>
General Counsel and Secretary</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
2007<BR>
2006</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
525,000<BR>
500,000</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
450,000<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
64,877<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
884,612<BR>
290,596</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
597,474</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
92,420<BR>
36,768</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
2,016,909<BR>
1,424,838</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=1><BR>
Steven M. Davis,<BR>
EVP&#151;National Homebuilding Operations</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
2007<BR>
2006</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
400,000<BR>
83,333</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
250,000<BR>
400,000</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
155,929<BR>
27,624</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
364,560<BR>
13,903</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
218,985<BR>
5,524</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
1,389,474<BR>
530,384</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=1><BR>
Sandra R.A. Karrmann,<BR>
Former EVP and Chief Human Resources Officer(4)</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
2007<BR>
2006</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
213,328<BR>
303,296</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
157,000</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
30,276<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
78,743<BR>
111,324</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
250,000</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
27,397<BR>
38,526</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
349,744<BR>
860,146</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>All
compensation is for Mr.&nbsp;Hilton's services in his capacity as the Chairman and Chief Executive Officer of the Company. Mr.&nbsp;Hilton did not receive any separate
compensation for his services as a director.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>The
$10,449 of stock awarded to Mr.&nbsp;Seay in 2006 was pursuant to our Company-wide longevity award program available to all employees.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>The
non-vested shares (restricted stock) grants have a fair value equal to the closing price of our stock on the date of the grant, in accordance with the requirements of
Statement of Financial Accounting Standard No.&nbsp;123(R), </FONT><FONT SIZE=1><I>Share-Based Payment</I></FONT><FONT SIZE=1> ("SFAS No.&nbsp;123R"). See additional detail "Grant of
Plan-Based Awards" table.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(4)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>Bonus
in 2006 represents a sign-on bonus of $157,000, of which $125,000 was paid in 2006 and $32,000 was paid in 2007.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(5)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>See
Note&nbsp;9 "Incentive Awards and Retirement Plan" of our consolidated financial statements included in our 2007 Annual Report on Form&nbsp;10-K for a discussion
of the Black-Scholes assumptions used for computing the fair value of options granted. The balances for 2007 include $2,206,937, $882,775, $503,017 and $315,546 of non-cash charges related
to the Company's stock option tender offer program for Messrs.&nbsp;Hilton, Seay, White and Davis, respectively.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(6)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>Amount
represents above-market earnings on deferred compensation that is not tax-qualified. See Non-qualified Deferred Compensation table below for more detail
on Mr.&nbsp;Seay's deferred compensation earnings.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(7)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>See
following table for more detail: </FONT></DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>37</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=42,EFW="2184391",CP="MERITAGE HOMES CORP.",DN="1",CHK=633346,FOLIO='37',FILE='DISK133:[08ZAH1.08ZAH77301]DM77301A.;51',USER='RKING',CD='31-MAR-2008;13:47' -->
<A NAME="page_dm77301_1_38"> </A>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><A
NAME="dm77301_all_other_compensation__dm701885"> </A>
<A NAME="toc_dm77301_2"> </A>
<BR></FONT><FONT SIZE=2><B>All Other Compensation Table<BR>  Year Ended December&nbsp;31, 2007    <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="30%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name and Principal Position<BR> </B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="5%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Health and<BR>
Insurance<BR>
Premiums<BR>
($)(1)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="6%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>401(k)<BR>
Match</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Car<BR>
Allowance</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Plane<BR>
Travel(2)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Other<BR>
(3)(4)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="16%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>All Other<BR>
Compensation($)</B></FONT><BR></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="30%" style="font-family:times;"><FONT SIZE=2>Steven J Hilton,<BR>
Chairman and CEO</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2007<BR>
2006</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>29,557<BR>
29,505</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,132<BR>
5,280</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;<BR>
17,835</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,855<BR>
131,165</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>167,304<BR>
46,157</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>206,848<BR>
229,942</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="30%" style="font-family:times;"><FONT SIZE=2>Larry W. Seay,<BR>
EVP and CFO</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2007<BR>
2006</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>16,840<BR>
7,555</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>8,200<BR>
5,280</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>14,400<BR>
14,400</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>74,295<BR>
12,902</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>113,735<BR>
40,137</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="30%" style="font-family:times;"><FONT SIZE=2>C. Timothy White,<BR>
EVP, General Counsel and Secretary</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2007<BR>
2006</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>21,338<BR>
16,772</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>14,400<BR>
14,400</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>56,682<BR>
5,596</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>92,420<BR>
36,768</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="30%" style="font-family:times;"><FONT SIZE=2>Steven M. Davis,<BR>
EVP&#151;National Homebuilding Operations</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2007<BR>
2006</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>13,408<BR>
1,399</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15,000<BR>
3,125</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>190,577<BR>
1,000</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>218,985<BR>
5,524</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="30%" style="font-family:times;"><FONT SIZE=2>Sandra R.A. Karrmann,<BR>
Former EVP and Chief Human Resources Officer</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2007<BR>
2006</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>11,773<BR>
16,314</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,249<BR>
3,396</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>11,375<BR>
18,000</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;<BR>
816</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>27,397<BR>
38,526</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Includes:
(i)&nbsp;employer portion of benefits provided to all employees and (ii)&nbsp;life and disability insurance premiums as contemplated in each NEO's employment agreement
if such elections were made.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>In
accordance with Mr.&nbsp;Hilton's employment agreement in effect during 2006, he was granted the right to personal use of a chartered aircraft for a pre-determined
number of annual flight hours. The amounts in the table above reflect these travel benefits, which were computed as out-of-pocket costs paid to the respective aircraft charter
companies for these personal-use flights. The balance also reflects any tax gross-up paid to Mr.&nbsp;Hilton in connection with the taxable income associated with these
flights. As noted elsewhere in this proxy statement, Mr.&nbsp;Hilton's amended and restated employment agreement removed the benefit for reimbursement for the right to personal use of a charter
aircraft as of its effective date.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Other
includes the following for 2007: (i)&nbsp;spousal travel of $6,217, $1,182, $1,182 and $1,182 for Messrs.&nbsp;Hilton, Seay, White and Davis, respectively;
(ii)&nbsp;relocation costs of $119,012 for Mr.&nbsp;Davis; (iii)&nbsp;stock option tender offer payment of $1.50 per option totaling $150,000, $60,000, $52,500 and $22,500 for
Messrs.&nbsp;Hilton, Seay, White and Davis, respectively; and (iv)&nbsp;income gross-up to reflect tax consequences, as applicable, of $11,087, $13,113, $3,000 and $47,883 for
Messrs.&nbsp;Hilton, Seay, White and Davis, respectively. Spousal travel is determined as either the actual ticket price for commercial airline travel or the equivalent of a first-class comparable
ticket on a major air travel carrier for private plane travel.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Other
includes the following for 2006: (i)&nbsp;spousal travel of $7,700, $1,550, $2,100, $1,000 and $0 for Mr.&nbsp;Hilton, Mr.&nbsp;Seay, Mr.&nbsp;White, Mr.&nbsp;Davis
and Ms.&nbsp;Karrmann, respectively; (ii)&nbsp;gift certificates of $1,000 each to Messrs.&nbsp;Hilton, Seay and White; (iii)&nbsp;income gross-up to reflect tax consequences, as
applicable, of $37,457, $10,352, $2,496, $0 and $816 for Mr.&nbsp;Hilton, Mr.&nbsp;Seay, Mr.&nbsp;White, Mr.&nbsp;Davis and Ms.&nbsp;Karrmann, respectively. Spousal travel is determined as
either the actual ticket price for commercial airline travel or the equivalent of a first-class comparable ticket on a major air travel carrier for private plane travel. </FONT></DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>38</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=43,EFW="2184391",CP="MERITAGE HOMES CORP.",DN="1",CHK=1025547,FOLIO='38',FILE='DISK133:[08ZAH1.08ZAH77301]DM77301A.;51',USER='RKING',CD='31-MAR-2008;13:47' -->
<A NAME="page_dm77301_1_39"> </A>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dm77301_2007_grant_of_plan-based_awards"> </A>
<A NAME="toc_dm77301_3"> </A>
<BR>

</FONT>

<FONT SIZE=2><B>2007 Grant of Plan-Based Awards

    <BR>    </B></FONT>

</P>

<!-- User-specified TAGGED TABLE -->
<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="13%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="7%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Estimated Future Payout(s)<BR>
Under Non-Equity Incentive Plan Awards</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="11%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="13%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name<BR> </B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="7%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Grant<BR>
Date</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Compensation<BR>
Committee<BR>
Approval<BR>
Date(1)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Threshold<BR>
($)</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="6%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Target<BR>
($)</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Maximum<BR>
($)</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>All Other<BR>
Stock Awards:<BR>
Number<BR>
of<BR>
Shares<BR>
of<BR>
Stock<BR>
or Units<BR>
($)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="11%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>All Other<BR>
Option<BR>
Awards:<BR>
Number<BR>
of Securities<BR>
Underlying<BR>
Options(#)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Exercise or<BR>
Base Price<BR>
of Option<BR>
Awards<BR>
($/sh)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Grant Date<BR>
Fair Value<BR>
of Stock<BR>
and Option<BR>
Awards<BR>
($)(2)</B></FONT><BR></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="13%" style="font-family:times;"><FONT SIZE=1>Steven J Hilton,<BR>
Chairman and CEO</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1/29/07<BR>
1/29/07</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1/18/07<BR>
1/18/07</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>(3)<BR>(3)</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>(3)<BR>(3)</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>(3)<BR>(3)</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&#151;<BR>
18,000</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>75,160<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>42.82<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>1,468,717<BR>
770,760</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="13%" style="font-family:times;"><FONT SIZE=1><BR>
Larry W. Seay,<BR>
EVP and CFO</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
1/29/07<BR>
1/29/07<BR>
12/11/07</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
1/18/07<BR>
1/18/07<BR>
12/11/07</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>(4)<BR>(4)<BR>(4)</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>(4)<BR>(4)<BR>(4)</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>(4)<BR>(4)<BR>(4)</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
7,333<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
36,667<BR>
&#151;<BR>
53,214</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
42.82<BR>
&#151;<BR>
15.98</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
716,517<BR>
313,999<BR>
406,566</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="13%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="13%" style="font-family:times;"><FONT SIZE=1><BR>
C. Timothy White,<BR>
EVP, General Counsel and Secretary</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
1/29/07<BR>
1/29/07<BR>
12/11/07</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
1/18/07<BR>
1/18/07<BR>
12/11/07</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>(5)<BR>(5)<BR>(5)</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>(5)<BR>(5)<BR>(5)</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>(5)<BR>(5)<BR>(5)</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
7,500<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
15,000<BR>
&#151;<BR>
50,000</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
42.82<BR>
&#151;<BR>
15.98</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
293,118<BR>
321,150<BR>
382,010</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="13%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="13%" style="font-family:times;"><FONT SIZE=1><BR>
Steven M. Davis,<BR>
EVP&#151;National Homebuilding Operations</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
1/29/07<BR>
12/11/07</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
1/18/07<BR>
12/11/07</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>(6)<BR>(6)</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>(6)<BR>(6)</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>(6)<BR>(6)</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
15,000<BR>
40,000</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
42.82<BR>
15.98</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
293,118<BR>
305,608</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="13%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="13%" style="font-family:times;"><FONT SIZE=1><BR>
Sandra R.A. Karrmann,<BR>
Former EVP and Chief Human Resources Officer</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
1/29/07<BR>
1/29/07</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
1/18/07<BR>
12/11/07</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
<BR>
3,500</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
15,000<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
42.82<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
293,118<BR>
149,870</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="13%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>The
Compensation Committee approved grants on January&nbsp;18, 2007, effective as of January&nbsp;29, 2007 and December&nbsp;11, 2007, effective as of December&nbsp;11, 2007,
respectively. The grants noted in the table above were included as part of the annual grant, but in accordance with the respective NEO's existing employment agreement. See "Discussion of 2007 CEO and
NEO Compensation" in this proxy statement for further discussion.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>Fair
value is computed as the Black-Scholes option value calculated in accordance with the provisions of SFAS No.&nbsp;123R multiplied by the number of options/restricted stock
granted for all grants. See Note&nbsp;9 "Incentive Awards and Retirement Plan" of our consolidated financial statements included in our 2007 Annual Report on Form&nbsp;10-K for a
discussion of the Black-Scholes assumptions used for computing the fair value of options granted.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>As
discussed in this proxy statement under the heading "Compensation Discussion and Analysis&#151;Employment Agreements&#151;Steven J. Hilton, CEO", pursuant to the
terms of his employment agreement, Mr.&nbsp;Hilton is entitled to a performance-based bonus equal to 0.825% of EBITDA if the Company's return on assets is in the top half of public homebuilders
having revenues of $500&nbsp;million or more per year, and an additional 0.825% of EBITDA if the Company's return on equity is in the top half of these public builders. If either measurement falls
within the 33<SUP>rd</SUP>&nbsp;to 49<SUP>th</SUP>&nbsp;percentile, the bonus is 0.5363% of EBITDA for the applicable measurement. If either measurement falls below the 33% threshold, then
there would not be any formula bonus paid with respect to such measurement. There is no target award and there is no dollar maximum bonus that can be earned. As discussed above under the heading
"Compensation Discussion and Analysis&#151;Discussion of CEO and NEO Compensation&#151;CEO Compensation," the Compensation Committee determined that no performance-based bonus should be
paid to Mr.&nbsp;Hilton for 2007, in accordance with the terms of his employment agreement.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(4)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>As
discussed in this proxy statement under the heading "Compensation Discussion and Analysis&#151;Employment Agreements&#151;Larry W. Seay, Executive Vice President and
Chief Financial Officer", pursuant to the terms of his employment agreement, Mr.&nbsp;Seay is entitled to a performance-based bonus equal to 0.20% of EBITDA if the Company's return on assets is in
the top half of public homebuilders having revenues of $500&nbsp;million or more per year, and an </FONT></DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>39</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=44,EFW="2184391",CP="MERITAGE HOMES CORP.",DN="1",CHK=599290,FOLIO='39',FILE='DISK133:[08ZAH1.08ZAH77301]DM77301A.;51',USER='RKING',CD='31-MAR-2008;13:47' -->
<A NAME="page_dm77301_1_40"> </A>
<UL>

<P style="font-family:times;"><FONT SIZE=1>additional
0.20% of EBITDA if the Company's return on equity is in the top half of these public builders. If either measurement falls within the 33<SUP>rd</SUP>&nbsp;to
49<SUP>th</SUP>&nbsp;percentile, the bonus is 0.13% of EBITDA for the applicable measurement. If either measurement falls below the 33% threshold, then there would not be any formula bonus paid
with respect to such measurement. There is no target award and there is no dollar maximum bonus that can be earned. As discussed above under the heading "Compensation Discussion and
Analysis&#151;Discussion of CEO and NEO Compensation&#151;Other NEO Compensation&#151;Larry W. Seay, Executive Vice President and Chief Financial Officer," the Compensation
Committee determined that no performance-based bonus should be paid to Mr.&nbsp;Seay for 2007, in accordance with the terms of his employment agreement. </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(5)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>As
discussed in this proxy statement under the heading "Compensation Discussion and Analysis&#151;Employment Agreements&#151;C. Timothy White&#151;Executive Vice
President, General Counsel and Secretary", pursuant to the terms of his employment agreement, Mr.&nbsp;White is entitled to a performance-based bonus equal to 0.1125% of EBITDA. There is no target
award and there is no dollar maximum bonus that can be earned. In 2007, the Committee approved a discretionary bonus of $450,000 for Mr.&nbsp;White, which is reflected in the Summary Compensation
Table under the column titled "Non-Equity Incentive Plan Compensation."
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(6)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>As
discussed in this proxy statement under the heading "Compensation Discussion and Analysis&#151;Employment Agreements&#151;Steven M. Davis&#151;Executive Vice
President, National Homebuilding Operations", pursuant to the terms of his employment agreement, Mr.&nbsp;Davis is entitled to a performance-based bonus targeted to be between 0.25% and 0.33% of
EBITDA. The payout will be based on Mr.&nbsp;Davis achieving specific goals mutually agreed upon between Mr.&nbsp;Davis and the Company. There is no target award and there is no dollar maximum
bonus that can be earned. In 2007, the Compensation Committee approved a discretionary bonus of $250,000 for Mr.&nbsp;Davis, which is reflected in the Summary Compensation Table under the column
titled "Non-Equity Incentive Plan Compensation." </FONT></DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>40</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=45,EFW="2184391",CP="MERITAGE HOMES CORP.",DN="1",CHK=506358,FOLIO='40',FILE='DISK133:[08ZAH1.08ZAH77301]DM77301A.;51',USER='RKING',CD='31-MAR-2008;13:47' -->
<A NAME="page_dm77301_1_41"> </A>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><A
NAME="dm77301_outstanding_equity_awards_at_2007_fiscal_year-end"> </A>
<A NAME="toc_dm77301_4"> </A>
<BR>

</FONT>

<FONT SIZE=2><B>Outstanding Equity Awards at 2007 Fiscal Year-End

    <BR>    </B></FONT>

</P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="18%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=7 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Option Awards</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=3 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Stock Awards</B></FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="18%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name<BR> </B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Number of<BR>
Securities<BR>
Underlying<BR>
Unexercised<BR>
Options<BR>
Exercisable(#)</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="14%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Number of<BR>
Securities<BR>
Underlying<BR>
Unexercised<BR>
Options<BR>
Unexercisable(#)</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="7%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Option<BR>
Exercise<BR>
Price($)</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Options<BR>
Expiration<BR>
Date</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="14%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Number of<BR>
Shares or Units<BR>
of Stock<BR>
that Have Not<BR>
Vested(#)</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="11%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Market Value<BR>
of Shares of<BR>
Units of<BR>
Stock that<BR>
Have Not<BR>
Vested($)</B></FONT><BR></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="18%" style="font-family:times;"><FONT SIZE=1>Steven J Hilton,<BR>
Chairman and CEO</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>75,290<BR>
74,320<BR>
5,680<BR>
48,000<BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&#151;<BR>
&#151;<BR>
&#151;<BR>
32,000<BR>
75,160<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>19.30<BR>
16.00<BR>
17.60<BR>
31.31<BR>
42.82<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>6/11/09<BR>
3/12/10<BR>
3/12/08<BR>
5/12/11<BR>
1/28/14</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR><BR><BR>(1)<BR>(2)</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&#151;<BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
18,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR><BR><BR><BR><BR>(3)</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&#151;<BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
262,260</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="18%" style="font-family:times;"><FONT SIZE=1><BR>
Larry W. Seay,<BR>
EVP and CFO</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
40,484<BR>
30,000<BR>
24,000<BR>
18,000<BR>
&#151;<BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;<BR>
6,000<BR>
12,000<BR>
36,667<BR>
53,214<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
7.22<BR>
19.30<BR>
16.00<BR>
31.31<BR>
42.82<BR>
15.98<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
3/13/08<BR>
6/11/09<BR>
3/12/10<BR>
5/12/11<BR>
1/28/14<BR>
12/10/14<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR><BR><BR>(4)<BR>(1)<BR>(2)<BR>(5)<BR></FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
7,333</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR><BR><BR><BR><BR><BR><BR>(3)</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
106,842</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="18%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="18%" style="font-family:times;"><FONT SIZE=1><BR>
C. Timothy White,<BR>
EVP, General Counsel and Secretary</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
20,000<BR>
5,000<BR>
5,000<BR>
10,000<BR>
&#151;<BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
15,000<BR>
50,000<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
7.22<BR>
19.30<BR>
16.00<BR>
31.31<BR>
42.82<BR>
15.98<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
3/13/08<BR>
6/11/09<BR>
3/12/10<BR>
5/12/11<BR>
1/28/14<BR>
12/10/14<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR><BR><BR><BR><BR>(2)<BR>(5)<BR></FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
7,500</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR><BR><BR><BR><BR><BR><BR>(6)</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
&#151;<BR>
109,275</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="18%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="18%" style="font-family:times;"><FONT SIZE=1><BR>
Steven M. Davis,<BR>
EVP&#151;Natl. Homebuilding Operations</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
15,000<BR>
40,000<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
42.82<BR>
15.98<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
1/28/14<BR>
12/10/14<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>(2)<BR>(5)<BR></FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;<BR>
25,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR><BR><BR>(7)</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;<BR>
364,250</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="18%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="18%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
Sandra R.A. Karrmann,<BR>
Former EVP and Chief Human Resources Officer</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
&#151;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
&#151;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
&#151;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
&#151;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
&#151;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=1><BR>
&#151;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="18%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>Remaining
unvested options vest in equal increments on May&nbsp;13, 2008 and 2009.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>Remaining
unvested options vest in equal increments on January&nbsp;29, 2008, 2009, 2010, 2011 and 2012.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>Remaining
unvested shares vest in equal increments on January&nbsp;29, 2008, 2009 and 2010.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(4)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>Remaining
unvested options vest on March&nbsp;13, 2008.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(5)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>Remaining
unvested options vest in equal increments on December&nbsp;11, 2008, 2009, 2010, 2011 and 2012.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(6)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>Remaining
unvested shares vest on January&nbsp;29, 2010.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(7)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>Remaining
unvested shares vest in equal increments on October&nbsp;16, 2009, 2010 and 2011. </FONT></DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>41</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=7,SEQ=46,EFW="2184391",CP="MERITAGE HOMES CORP.",DN="1",CHK=148440,FOLIO='41',FILE='DISK133:[08ZAH1.08ZAH77301]DM77301A.;51',USER='RKING',CD='31-MAR-2008;13:47' -->
<A NAME="page_dm77301_1_42"> </A>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><A
NAME="dm77301_2007_option_exercises_and_stock_vested"> </A>
<A NAME="toc_dm77301_5"> </A>
<BR>

</FONT>

<FONT SIZE=2><B>2007 Option Exercises and Stock Vested

    <BR>    </B></FONT>

</P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="44%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=3 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Option Awards</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=3 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Stock Awards</B></FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="44%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name<BR> </B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Number of<BR>
Shares<BR>
Acquired<BR>
on Exercise<BR>
(#)</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Value<BR>
Realized<BR>
on Exercise<BR>
($)</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="16%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Number of<BR>
Shares Acquired<BR>
on Vesting(#)</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Value<BR>
Realized<BR>
on Vesting($)</B></FONT><BR></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="44%" style="font-family:times;"><FONT SIZE=2>Steven J Hilton, Chairman and CEO</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,710</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>47,147</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="44%" style="font-family:times;"><FONT SIZE=2>Larry W. Seay&#151;EVP and CFO</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="44%" style="font-family:times;"><FONT SIZE=2>C. Timothy White&#151;EVP, General Counsel and Secretary</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="44%" style="font-family:times;"><FONT SIZE=2>Steven M. Davis&#151;EVP&#151;National Homebuilding Operations</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="44%" style="font-family:times;"><FONT SIZE=2>Sandra R.A. Karrmann&#151;Former EVP, Chief Human Resources Officer</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dm77301_2007_nonqualified_deferred_compensation"> </A>
<A NAME="toc_dm77301_6"> </A>
<BR>

  </FONT>

<FONT SIZE=2><B>2007 Nonqualified Deferred Compensation

    <BR>    </B></FONT>

</P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="96%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="24%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name<BR> </B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="4%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="13%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Executive<BR>
Contributions<BR>
in Last FY($)</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Registrant<BR>
Contributions<BR>
in Last FY ($)</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="11%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Aggregated<BR>
Earnings in<BR>
Last FY($)</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Aggregate<BR>
Withdrawals/<BR>
Distributions<BR>
($)</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Aggregate<BR>
Balance at<BR>
Last FYE<BR>
($)</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="24%" style="font-family:times;"><FONT SIZE=1>Steven J Hilton, Chairman and CEO</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>2007<BR>
2006</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="24%" style="font-family:times;"><FONT SIZE=1><BR>
Larry W. Seay, EVP and CFO</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
2007<BR>
2006<BR>
2006</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
5,320<BR>
4,533<BR>
4,390</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>(1)(3)<BR>(2)(3)<BR>(1)(3)</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
59,883<BR>
56,339<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>(1)<BR>(2)<BR></FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
<BR>
&#151;<BR>
54,563</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR><BR><BR>(1)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="24%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="13%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="24%" style="font-family:times;"><FONT SIZE=1><BR>
C. Timothy White, EVP, General Counsel and Secretary</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
2007<BR>
2006</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="24%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="13%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="24%" style="font-family:times;"><FONT SIZE=1><BR>
Steven M. Davis, EVP&#151;National Homebuilding Operations</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
2007<BR>
2006</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="24%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="13%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="24%" style="font-family:times;"><FONT SIZE=1><BR>
Sandra R.A. Karrmann&#151;Former EVP, Chief Human Resources Officer</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
2007<BR>
2006</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="24%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="13%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>The
original amount of this award ($47,000) was reported as compensation to Mr.&nbsp;Seay in 2004. The award was made under a previous bonus program that has since been
discontinued. In 2008, Mr.&nbsp;Seay was paid the full balance of his deferred bonus agreement&#151;2004 Award Year. Mr.&nbsp;Seay became fully vested in such amount on December&nbsp;31,
2007.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>The
original amount of this award ($46,000) was reported as compensation to Mr.&nbsp;Seay in 2003. The award was made under a previous bonus program that has since been
discontinued. In 2007, Mr.&nbsp;Seay was paid in full the balance of his deferred bonus agreement&#151;2003 Award Year. Mr.&nbsp;Seay became fully vested in such amount on
December&nbsp;31, 2006.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>Interest
accrues on the aggregate deferred balance annually and is computed as the prime rate reported as of the first day of the year plus 150 basis points. </FONT></DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>42</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=8,SEQ=47,EFW="2184391",CP="MERITAGE HOMES CORP.",DN="1",CHK=702961,FOLIO='42',FILE='DISK133:[08ZAH1.08ZAH77301]DM77301A.;51',USER='RKING',CD='31-MAR-2008;13:47' -->
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<P style="font-family:times;"><FONT SIZE=2><A
NAME="page_do77301_1_43"> </A>


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<!-- COMMAND=ADD_DEFAULTFONT,"font-family:times;" -->


 </FONT></P>

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<P style="font-family:times;"><FONT SIZE=2><B>Potential Payments upon Termination or Change-of-Control  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I>Summary  </I></B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have entered into an employment agreement and change of control agreement with our CEO and each of our other NEOs. Under the terms of these agreements, our CEO
and other NEOs are entitled to severance payments and other benefits in the event of certain types of terminations. These benefits can include cash payments, continuation of insurance benefits and the
acceleration of outstanding stock options and restricted shares. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following
is a summary of the severance provisions contained in the employment agreements and change of control agreements between the Company and its NEOs. The table includes an
estimate of the benefits that would accrue for each executive if the triggering event occurred on December&nbsp;31, 2007 and is based on each executive's compensation on that date. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information
is not included for Sandra R. A. Karrmann, our former EVP, Chief Human Resources Officer, because Ms.&nbsp;Karrmann's severance benefits expired upon her resignation in
August 2007. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="12%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>NEO<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="15%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Triggering Events(1)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="22%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Payments/Benefits</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="15%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Payment Terms</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="17%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Material Conditions</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Potential<BR>
Value of<BR>
Benefits(2)</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1>Steven J. Hilton, Chairman and CEO</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1>Voluntary resignation by the executive without good reason</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=1>In the case of voluntary resignation without good reason, Mr.&nbsp;Hilton will be entitled to (i)&nbsp;his base salary through the date of termination, (ii)&nbsp;reimbursement of COBRA premiums, and (iii)&nbsp;a severance
payment equal to $5&nbsp;million.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1>The severance payment<BR>
will&nbsp;be&nbsp;paid&nbsp;over&nbsp;a&nbsp;period<BR>
of one year following<BR>
termination, except that<BR></FONT> <FONT SIZE=1>&nbsp;<BR></FONT> <FONT SIZE=1>1. In the event of a<BR>
termination&nbsp;resulting&nbsp;from<BR>
a change of control, the</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="17%" style="font-family:times;"><FONT SIZE=1>Mr.&nbsp;Hilton is obligated to<BR>
provide reasonable<BR>
consulting services to the<BR>
Company for a period of<BR>
two years following<BR>
termination.<BR></FONT> <FONT SIZE=1>&nbsp;&nbsp;<BR></FONT> <FONT SIZE=1>In addition, Mr.&nbsp;Hilton</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>5,069,318</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1>Voluntary resignation by the executive with good reason</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=1>In the case of voluntary resignation with good reason, Mr.&nbsp;Hilton will be entitled to (i)&nbsp;his base salary through the date of termination, (ii)&nbsp;reimbursement of COBRA premiums, and (iii)&nbsp;a severance
payment equal to (1)&nbsp;two times Mr.&nbsp;Hilton's base salary on the date of termination and (2)&nbsp;the actual bonuses earned by Mr.&nbsp;Hilton in the two years prior to his termination (provided such severance payment shall not be less than
$5&nbsp;million nor more than $10&nbsp;million).</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1>severance payment will be<BR>
paid in one lump sum<BR>
within 30&nbsp;days of<BR>
termination subject to<BR>
409A requirements.<BR></FONT> <FONT SIZE=1>&nbsp;&nbsp;<BR></FONT> <FONT SIZE=1>2. The pro rata bonus to<BR>
be paid upon a<BR>
termination by the<BR>
Company without cause<BR>
will&nbsp;be&nbsp;paid&nbsp;as&nbsp;set&nbsp;forth&nbsp;in<BR>
the employment<BR>
agreement (after<BR>
year end).</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="17%" style="font-family:times;"><FONT SIZE=1>must comply with<BR>
extensive non-compete<BR>
non-solicitation&nbsp;covenants<BR>
for a period of two years<BR>
following termination.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>12,104,318</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1><BR>
Termination by the Company without cause</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=1><BR>
In the case of termination by the Company without cause, Mr.&nbsp;Hilton will be entitled to (i)&nbsp;his base salary through the date of termination, (ii)&nbsp;reimbursement of COBRA premiums, (iii)&nbsp;acceleration and vesting of all outstanding
stock options and restricted stock awards granted after January&nbsp;1, 2007, (iv)&nbsp;a severance payment equal to (1)&nbsp;two times Mr.&nbsp;Hilton's base salary on the date of termination and (2)&nbsp;the actual bonuses earned by Mr.&nbsp;Hilton
in the two years prior to his termination (provided such severance payment shall not be less than $5&nbsp;million nor more than $10&nbsp;million), and (v)&nbsp;if the termination occurs during the final three months of the fiscal year, a pro rata
bonus for that year based on the bonus criteria then in effect.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1><BR>
3. The severance payment<BR>
to be paid upon a<BR>
resignation without good<BR>
reason&nbsp;will&nbsp;be&nbsp;paid&nbsp;over&nbsp;a<BR>
period of two years.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="17%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
12,366,578</FONT></TD>
</TR>
</TABLE>
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<BR>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>43</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1><BR>
Death or disability</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=1><BR>
In the case of a termination due to death or disability, Mr.&nbsp;Hilton (or his heirs and estate) will receive (i)&nbsp;his base salary through the date of termination, (ii)&nbsp;a pro rata portion of Mr.&nbsp;Hilton's bonus for the year based on
the criteria then in effect, (iii)&nbsp;reimbursement of COBRA premiums, and (iv)&nbsp;acceleration and vesting of all outstanding stock options and restricted stock awards granted after January&nbsp;1, 2007.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="17%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
331,578</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1><BR>
Change of control</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=1><BR>
In the case of a termination as a result of a change of control, Mr.&nbsp;Hilton will be entitled to a severance payment equal to (1)&nbsp;three times the higher of (i)&nbsp;his annual base salary on the date of termination or (ii)&nbsp;his annual
base salary on the date preceding the change of control plus (2)&nbsp;three times the highest of (i)&nbsp;his average annual incentive compensation for the two years prior to termination or (ii)&nbsp;his annual incentive compensation for the year
preceding the change of control. The change of control severance payment is capped at the lesser of the amount that could be paid that is not subject to the imposition of a federal excise income tax, or $15&nbsp;million. Mr.&nbsp;Hilton will also be
entitled to continuation of his life, disability and group health insurance benefits for a period of two years following termination and acceleration and immediate vesting of all stock options and restricted stock awards.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="17%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
18,355,004</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
Larry W. Seay, EVP and CFO</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1><BR>
Voluntary resignation by the executive with good reason</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=1><BR>
In the case of voluntary resignation with good reason, Mr.&nbsp;Seay will be entitled to (i)&nbsp;his base salary through the date of termination, (ii)&nbsp;reimbursement of COBRA premiums, and (iii)&nbsp;a severance payment equal to Mr.&nbsp;Seay's
base salary on the date of termination plus the actual bonus earned by Mr.&nbsp;Seay in the two years prior to his termination (provided such severance payment shall not be more than $3.0&nbsp;million).</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1><BR>
The severance payment<BR>
will&nbsp;be&nbsp;paid&nbsp;over&nbsp;a&nbsp;period<BR>
of one year following<BR>
termination, except that:<BR></FONT> <FONT SIZE=1>&nbsp;&nbsp;<BR></FONT> <FONT SIZE=1>1. In the event of a<BR>
termination&nbsp;resulting&nbsp;from<BR>
a change of control, the<BR>
severance payment will be<BR>
paid in one lump sum<BR>
within 30&nbsp;days<BR>
of termination subject to<BR>
409A requirements.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="17%" style="font-family:times;"><FONT SIZE=1><BR>
Mr.&nbsp;Seay is obligated to<BR>
provide reasonable<BR>
consulting services to the<BR>
Company for a period of<BR>
one year following<BR>
termination.<BR></FONT> <FONT SIZE=1>&nbsp;<BR></FONT> <FONT SIZE=1>In addition, Mr.&nbsp;Seay<BR>
must comply with a<BR>
non-compete covenant for<BR>
a period of six months<BR>
following&nbsp;termination&nbsp;and<BR>
non-solicitation covenant<BR>
for a period of one year</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
3,487,973</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1>Termination by the Company without cause</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=1>In the case of termination by the Company without cause, Mr.&nbsp;Seay will be entitled to (i)&nbsp;his base salary through the date of termination, (ii)&nbsp;reimbursement of COBRA premiums, (iii)&nbsp;acceleration and
vesting of all outstanding stock options and restricted stock awards granted after January&nbsp;1, 2007, (iv)&nbsp;a severance payment equal to Mr.&nbsp;Seay's base salary on the date of termination and the actual bonus earned in the two years prior
to his termination (provided such severance payment shall not be more than $3.0&nbsp;million), and (v)&nbsp;if the termination occurs during the final three months of the fiscal year, a pro rata bonus for that year based on the bonus criteria then in
effect.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1>2. The pro rata bonus to<BR>
be paid upon a<BR>
termination by the<BR>
Company without cause<BR>
will&nbsp;be&nbsp;paid&nbsp;as&nbsp;set&nbsp;forth&nbsp;in<BR>
the employment<BR>
agreement (after year<BR>
end).</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="17%" style="font-family:times;"><FONT SIZE=1>following termination.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>3,594,815</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>44</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1><BR>
Death or disability</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=1><BR>
In the case of a termination due to death or disability, Mr.&nbsp;Seay (or his heirs and estate) will receive (i)&nbsp;his base salary through the date of termination, (ii)&nbsp;a pro rata portion of Mr.&nbsp;Seay's bonus for the year based on the
criteria then in effect, (iii)&nbsp;reimbursement of COBRA premiums, and (iv)&nbsp;acceleration and vesting of all outstanding stock options and restricted stock awards granted after January&nbsp;1, 2007.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="17%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
144,815</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1><BR>
Change of control</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=1><BR>
In the case of a termination as a result of a change of control, Mr.&nbsp;Seay will be entitled to a severance payment equal to (1)&nbsp;two times the higher of (i)&nbsp;his annual base salary on the date of termination or (ii)&nbsp;his annual base
salary on the date preceding the change of control plus (2)&nbsp;two times the highest of (i)&nbsp;his average annual incentive compensation for the two years prior to termination or (ii)&nbsp;his annual incentive compensation for the year preceding
the change of control. The change of control severance payment is capped at the lesser of the amount that could be paid that is not subject to the imposition of a federal excise income tax, or $6&nbsp;million. Mr.&nbsp;Seay will also be entitled to
continuation of his life, disability and group health insurance benefits for a period of two years following termination and acceleration and immediate vesting of all stock options and restricted stock awards.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="17%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
4,890,156</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
C.&nbsp;Timothy&nbsp;White, EVP, General Counsel and Secretary</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1><BR>
Voluntary resignation by the executive with good reason<BR></FONT> <FONT SIZE=1>&nbsp;&nbsp;<BR></FONT> <FONT SIZE=1>Termination by Company without cause<BR></FONT> <FONT SIZE=1>&nbsp;&nbsp;<BR></FONT> <FONT SIZE=1>Change of control</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=1><BR>
In case of voluntary resignation with good reason, termination by the Company without cause or as the result of a change of control, Mr.&nbsp;White will receive (i)&nbsp;his base salary through the date of termination, (ii)&nbsp;any unpaid bonus for
the prior year and a pro rated portion of his bonus for the year in which the termination occurs, (iii)&nbsp;a severance payment equal to two times Mr.&nbsp;White's base salary and two times his bonus for the previous year (the severance payment is
capped at $2.5&nbsp;million in the case of a termination resulting from a change of control), (iv)&nbsp;reimbursement of COBRA premiums, and (v)&nbsp;acceleration and vesting of all outstanding stock options.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1><BR>
The severance payment<BR>
will be paid within<BR>
15&nbsp;days of the date of<BR>
termination&nbsp;in&nbsp;the&nbsp;case&nbsp;of<BR>
a voluntary resignation<BR>
with good reason or a<BR>
termination by the<BR>
Company without cause.<BR></FONT> <FONT SIZE=1>&nbsp;&nbsp;<BR></FONT> <FONT SIZE=1>The severance payment<BR>
will be paid within<BR>
30&nbsp;days following a<BR>
termination&nbsp;resulting&nbsp;from<BR>
a change of control.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="17%" style="font-family:times;"><FONT SIZE=1><BR>
Mr.&nbsp;White must comply<BR>
with a non-compete<BR>
covenant for six months<BR>
following termination and<BR>
a non-solicitation<BR>
covenant for a period of<BR>
one year following<BR>
termination. Mr.&nbsp;White<BR>
may, within 60&nbsp;days of the<BR>
date of termination, waive<BR>
compliance with these<BR>
provisions, provided that<BR>
in doing so, he would<BR>
relinquish his rights to the<BR>
severance payment<BR>
described in this table.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
2,741,200</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1><BR>
Death or disability</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=1><BR>
In the case of death or disability, Mr.&nbsp;White (or his heirs and estate) will receive (i)&nbsp;his base salary through the date of termination, (ii)&nbsp;any unpaid bonus for the prior year and a pro rated amount of Mr.&nbsp;White's bonus for the
year in which the termination occurs, (iii)&nbsp;reimbursement of COBRA premiums, and (iv)&nbsp;acceleration and vesting of all outstanding stock options.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="17%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
496,252</FONT></TD>
</TR>
</TABLE>
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<BR>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>45</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
Steven M. Davis, EVP&#151;National Homebuilding Operations</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1><BR>
Voluntary resignation by the executive with good reason<BR></FONT> <FONT SIZE=1>&nbsp;&nbsp;<BR></FONT> <FONT SIZE=1>Termination by Company without cause<BR></FONT> <FONT SIZE=1>&nbsp;&nbsp;<BR></FONT> <FONT SIZE=1>Change of control</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=1><BR>
In case of voluntary resignation with good reason, termination by the Company without cause or as the result of a change of control, Mr.&nbsp;Davis will receive (i)&nbsp;his base salary through the date of termination, (ii)&nbsp;any unpaid bonus for
the prior year (iii)&nbsp;a severance payment equal to Mr.&nbsp;Davis' base salary on the date of termination plus his bonus for the year preceding the date of termination, (iv)&nbsp;reimbursement of COBRA premiums, (v)&nbsp;acceleration and vesting
of all outstanding stock options, and (vi)&nbsp;for a qualifying termination after September&nbsp;16, 2007, any restrictions on Mr.&nbsp;Davis' outstanding restricted stock awards will lapse.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1><BR>
The&nbsp;severance&nbsp;payment<BR>
will be paid within<BR>
15&nbsp;days of the date of<BR>
termination.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="17%" style="font-family:times;"><FONT SIZE=1><BR>
Mr.&nbsp;Davis must comply<BR>
with a non-solicitation<BR>
covenant for a period of<BR>
18&nbsp;months following<BR>
termination.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
1,457,913</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1><BR>
Death or disability</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="22%" style="font-family:times;"><FONT SIZE=1><BR>
In the case of death or disability, Mr.&nbsp;Davis (or his heirs and estate) will receive (i)&nbsp;his base salary through the date of termination, (ii)&nbsp;any unpaid bonus for the prior year and a pro rated amount of Mr.&nbsp;Davis' bonus for the
year in which the termination occurs, (iii)&nbsp;reimbursement of COBRA premiums, (iv)&nbsp;acceleration and vesting of all outstanding stock options and (v)&nbsp;any restrictions on Mr.&nbsp;Davis' outstanding restricted stock awards will
lapse.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="17%" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1><BR>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1><BR>
657,913</FONT></TD>
</TR>
</TABLE>
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<HR NOSHADE ALIGN="LEFT" WIDTH="120">
<DL compact>
<DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>The
terms "cause," "good reason," "change of control" and "disability" are defined in each executive's employment and change of control agreements. The determination of whether a
triggering event has occurred is determined by the Board of Directors and/or Compensation Committee based on the occurrence or presence of events that might constitute a triggering event, provided,
however, the agreements generally provide for a process for the resolution of a dispute between an executive and the Company with respect to the occurrence or existence of a triggering event.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-9pt;'><FONT SIZE=1>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=1>Consistent
with the SEC's rules and regulations concerning executive compensation disclosure, the potential value of each executive's benefits assumes that that the termination
occurred on December&nbsp;31, 2007, and with a closing stock price of $14.57 on the last business day of 2007. Balances include the full 2007 bonus paid in 2008, where applicable. The benefit
derived from the acceleration of options was computed as the difference between the strike price and the closing price of our stock on the last day of 2007 for each option grant affected. Total
termination benefits represent payments for severance, non-compete and non-disclosure covenants. </FONT></DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>46</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_do77301_1_47"> </A>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><A
NAME="do77301_director_compensation"> </A>
<A NAME="toc_do77301_1"> </A>
<BR></FONT><FONT SIZE=2><B>DIRECTOR COMPENSATION    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2007, our non-employee directors received an annual retainer of $50,000; committee chairmen received an additional annual payment of $15,000; and
committee members received an additional payment of $10,000. The lead director received an additional $40,000 annually. Also in 2007, our non-employee directors each received an annual
stock option grant to acquire 4,000 shares of Meritage common stock, which vests in equal increments on the first two anniversary dates of the grant and has an exercise price equal to the closing
price of our common stock on the date of grant. In addition, the non-employee directors each received a grant of 12,000 shares of restricted stock. The restricted stock vests in equal
increments on the first three anniversaries of the date of grant. In connection with the Company-wide grant in December 2007, as previously discussed, each non-employee
director received an additional grant of 7,500 options to purchase our common stock, which vest in equal increments on the first two anniversaries of the grant date and have an exercise price equal to
our stock closing price on the date of grant. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
2007 director compensation is set forth below: </FONT></P>

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<TABLE WIDTH="79%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="37%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="15%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Fees Earned or Paid in Cash ($)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="11%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Option Awards ($) (1)&nbsp;(2)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="16%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>All Other Compensation ($) (3)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Total ($)</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2>Robert G. Sarver</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>50,000</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>292,197</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15,000</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>357,197</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2>Raymond Oppel</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>85,000</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>292,197</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15,000</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>392,197</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2>Peter L. Ax</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>125,000</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>292,197</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15,000</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>432,197</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2>Richard T. Burke, Sr.&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>60,000</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>292,197</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15,000</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>367,197</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2>Gerald W. Haddock</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>75,000</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>303,762</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>22,500</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>401,262</FONT></TD>
</TR>
</TABLE>
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<HR NOSHADE ALIGN="LEFT" WIDTH="120">
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>As
of December&nbsp;31, 2007, the outstanding number of options held by the non-employee directors was 21,500, 41,500, 21,500, 21,500 and 11,500 for
Messrs.&nbsp;Sarver, Oppel, Ax, Burke and Haddock, respectively.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>See
Note&nbsp;9 "Incentive Awards and Retirement Plan" of our consolidated financial statements included in our 2007 Annual Report on Form&nbsp;10-K for a discussion
of the Black-Scholes assumptions used for computing the fair value of options granted. Each director's balance includes $88,513 of non-cash charges related to the Company's stock option
tender offer discussed above.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Amount
represents a cash payment of $1.50 per tendered option in connection with the Company-wide stock option tender offer discussed above. Additionally, as part of the
reimbursement to directors for out-of-pocket expenses incurred in attending Board and committee meetings, we reimburse certain directors for charter aircraft service or other
travel and lodging-related expenses. During 2007, we made reimbursements of approximately $18,000 and $4,900 and $2,600, to Messrs.&nbsp;Burke, Haddock and Oppel, respectively. </FONT></DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>47</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_do77301_1_48"> </A>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>The following Executive Compensation Committee Report does not constitute soliciting material and should not be deemed filed or incorporated by reference into any
Company filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except to the extent the Company specifically incorporates this report.</I></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="do77301_executive_compensation_committee_report"> </A>
<A NAME="toc_do77301_2"> </A>
<BR></FONT><FONT SIZE=2><B>EXECUTIVE COMPENSATION COMMITTEE REPORT    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Executive Compensation Committee of the Board of Directors of the Company has reviewed and discussed the Compensation Discussion and Analysis required by
Item&nbsp;402(b) of Regulation&nbsp;S-K with management and, based on such review and discussions, the Executive Compensation Committee recommended to the Board of Directors that the
Compensation Discussion and Analysis be included in this proxy statement. </FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="49%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%" style="font-family:times;"><FONT SIZE=2>THE EXECUTIVE COMPENSATION COMMITTEE</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="49%" style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="49%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%" style="font-family:times;"><FONT SIZE=2>Raymond Oppel&#151;Chairman<BR>
Gerald W. Haddock<BR>
Peter L. Ax<BR></FONT>
</TD>
</TR>
</TABLE>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>48</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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NAME="page_dq77301_1_49"> </A>


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 </FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dq77301_securities_authorized_for_issu__sec02789"> </A>
<A NAME="toc_dq77301_1"> </A>
<BR></FONT><FONT SIZE=2><B>SECURITIES AUTHORIZED FOR ISSUANCE<BR>  UNDER EQUITY COMPENSATION PLANS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes our equity compensation under all of our equity compensation plans as of December&nbsp;31, 2007: </FONT></P>

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<TABLE WIDTH="97%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="32%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Plan Category<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="19%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(a)<BR>
Number of Shares to<BR>
Be Issued Upon<BR>
Exercise of<BR>
Outstanding Options,<BR>
Warrants and Rights</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(b)<BR>
Weighted Average<BR>
Exercise Price of<BR>
Outstanding Options,<BR>
Warrants and Rights</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="20%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>(c)<BR>
Number of<BR>
Securities Remaining<BR>
Available for Future<BR>
Issuance under Equity<BR>
Compensation Plans<BR>
(Excluding Securities<BR>
Reflected in Column(a))</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="32%" style="font-family:times;"><FONT SIZE=2>Equity compensation plans approved by stockholders</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,253,155</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>24.71</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>471,650</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>(1)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="32%" style="font-family:times;"><FONT SIZE=2><BR>
Equity compensation plans not approved by stockholders</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
n/a</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="32%" style="font-family:times;"><FONT SIZE=2><BR>
Total</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
2,253,155</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
24.71</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
471,650</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>(1)</FONT></TD>
</TR>
</TABLE>
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<HR NOSHADE ALIGN="LEFT" WIDTH="120">
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
number of securities remaining available for issuance under existing or future grants includes 2,724,805 shares under our 2006 Stock Incentive Plan. In addition to stock options,
stock appreciation rights and performance share awards, the 2006 Stock Incentive Plan allows for the grant of restricted stock shares. Under the 2006 Stock Incentive Plan, awards other than stock
options and stock appreciation rights are counted against the shares available for grant as 1.38 shares for every one share issued in connection with such awards. </FONT></DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>49</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_dq77301_1_50"> </A>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dq77301_section_16(a)_benefici__dq702038"> </A>
<A NAME="toc_dq77301_2"> </A>
<BR></FONT><FONT SIZE=2><B>SECTION&nbsp;16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive officers, directors and "beneficial owners" of more than ten percent of our common stock must file initial reports of ownership and changes in ownership
with the SEC under Section&nbsp;16(a) of the Exchange Act. SEC regulations require these reporting persons to furnish us with copies of all Forms&nbsp;3, 4 and 5, and amendments thereto, that they
file with the SEC. Based solely on our review of the copies of such forms furnished to us, or representations that no forms were required, we believe that during 2007 all of our officers, directors
and greater than ten percent beneficial owners complied with all filing requirements of Section&nbsp;16(a) of the Exchange Act. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dq77301_certain_relationships_and_related_transactions"> </A>
<A NAME="toc_dq77301_3"> </A>
<BR></FONT><FONT SIZE=2><B>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Meritage maintains a written policy concerning conflict of interest transactions that generally applies to transactions between the Company and related persons,
including employees, officers and directors and applies to direct and indirect relationships and transactions. Because of the nature of our business, which involves the ownership, development,
construction and sale of real estate and single family homes, our policy was carefully constructed to capture transactions and relationships between the Company or its competitors, and related
persons. At the same time, we were mindful to not inadvertently create the potential for conflicts relating to transactions that are primarily of a personal nature and do not involve the Company, or
conflict with its business (for example, the construction of a vacation home or the purchase of a home from the Company pursuant to its home purchase policy that is available to most employees). </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
transactions not exempted from the policy, Meritage's policy requires that designated members of senior management must review and approve any transaction between a covered person
(e.g.,&nbsp;employees, officers and directors) and the Company. The policy provides that the Company legal and internal audit departments are to be involved in the review and approval process. For
transactions involving directors or senior executive officers (including the officers named in this proxy statement), the proposed transaction must be approved in advance by the Audit Committee of the
Board of Directors. Real estate transactions between the Company and related persons are subject to strict scrutiny. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
of the transactions listed below was approved by the Audit Committee of the Board of Directors pursuant to the policy, except that the payments made to the Phoenix Suns pursuant to
the advertising/sponsorship were not specifically approved by the Audit Committee in 2007 as the payments were made pursuant to a previously existing contractual arrangement. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
2004, we contracted with a landbanker to acquire property in the Tucson, Arizona area for $4.6&nbsp;million. Mr.&nbsp;Sarver has a 3.8% ownership interest in the entity that
sold this property to the landbanker. During 2006 and 2005, we had purchases totaling approximately $1.5&nbsp;million and $1.2&nbsp;million from the landbanker related to this property. In
addition, during 2007, 2006 and 2005, we made purchases of approximately $0.8&nbsp;million, $1.3&nbsp;million and $64,800 directly from the entity in which Mr.&nbsp;Sarver has the ownership
interest. We completed the full acquisition of this property during fiscal 2007. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
2004 the Company entered into an advertising/sponsorship agreement with the National Basketball Association's Phoenix Suns organization. Mr.&nbsp;Sarver is the Controlling Owner
and Vice Chairman of the Phoenix Suns, and Mr.&nbsp;Hilton is a minority owner of the team. In 2007, 2006 and 2005 we paid approximately $329,000, $714,000 and $329,000 in advertising/sponsorship
costs related to the agreement. We terminated our advertising/sponsorship agreement during 2007 and, based on a verbal agreement for future payment in the next fiscal year, we expect a significantly
reduced level of such
expenditures in 2008. These amounts are recorded as general and administrative expenses on our consolidated statements of operations. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
2007, 2006 and 2005, we chartered aircraft services from companies in which Mr.&nbsp;Hilton has a significant ownership interest. Such amounts were: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="75%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="51%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Year Ended December&nbsp;31</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="51%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>2007</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>2006</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>2005</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="51%" style="font-family:times;"><FONT SIZE=2>Steven J. Hilton</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>400,000</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>711,000</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>234,000</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
paid legal fees of approximately $1,643,000 to a law firm in 2005, of which C. Timothy White was a partner. Mr.&nbsp;White served on our Board of Directors until October&nbsp;1,
2005, at which time he joined the Company as our General Counsel. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>50</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_dq77301_1_51"> </A>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dq77301_independent_auditors"> </A>
<A NAME="toc_dq77301_4"> </A>
<BR></FONT><FONT SIZE=2><B>INDEPENDENT AUDITORS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deloitte&nbsp;&amp; Touche&nbsp;LLP serves as our principal independent registered public accounting firm. We expect representatives of Deloitte&nbsp;&amp;
Touche&nbsp;LLP to be present at our Annual Meeting of Stockholders to respond to appropriate questions, and they will be given an opportunity to make a statement if they desire to do so. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table presents fees for professional accounting services rendered by our principal accountant for the audit of our annual financial statements for 2007 and 2006, and fees
billed for other services rendered. </FONT></P>




<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="72%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>2007</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>2006</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2>Audit fees(1)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,311,400</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,379,748</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2>Audit-related fees(2)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>37,000</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>25,000</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Audit and audit-related fees</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,348,400</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,404,748</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2>Tax fees(3)</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>21,920</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="56%" style="font-family:times;"><FONT SIZE=2>Total fees</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,348,400</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,426,668</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE SIZE=4></TD>
</TR>
</TABLE></DIV>

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<HR NOSHADE ALIGN="LEFT" WIDTH="120">

<DL compact>

<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Audit
fees consisted principally of fees for audit and review services, services related to various SEC filings and related research. Audit fees in 2007 and 2006 include $303,397 and
$548,217 of fees for audit services related to Management's Annual Report on Internal Control over Financial Reporting.

<BR><BR></FONT></DD>

<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Audit-related
fees consisted of fees related to the audit of our 401(k) plan and financial accounting and reporting consultations.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Tax
fees consisted of fees for income tax consulting and tax (including state and local tax procurement) compliance, including preparation of original and amended state and federal
income tax returns, refund claims, and IRS tax audit assistance. </FONT></DD></DL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
year, the Audit Committee approves the annual audit engagement in advance. The Audit Committee also has established procedures to pre-approve all non-audit
services provided by the principal independent registered public accounting firm. All 2007 and 2006 non-audit services listed above were pre-approved. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>51</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_dq77301_1_52"> </A>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>The following report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any Company
filing under the Securities Act or the Exchange Act, except to the extent the Company specifically incorporates this report.</I></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dq77301_report_of_the_audit_committee"> </A>
<A NAME="toc_dq77301_5"> </A>
<BR></FONT><FONT SIZE=2><B>REPORT OF THE AUDIT COMMITTEE    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have reviewed Meritage's audited consolidated financial statements and met with both management and Deloitte&nbsp;&amp; Touche&nbsp;LLP, the Company's
independent registered public accounting firm, to discuss those consolidated financial statements. Management has represented to us that the consolidated financial statements were prepared in
accordance with accounting principles generally accepted in the United States of America. We have also reviewed, and discussed with management and Deloitte&nbsp;&amp; Touche&nbsp;LLP, management's
report and Deloitte&nbsp;&amp; Touche&nbsp;LLP's report and attestation on internal control over financial reporting in accordance with Section&nbsp;404 of the Sarbanes-Oxley Act. We have received
from and discussed with Deloitte&nbsp;&amp; Touche&nbsp;LLP the written disclosure and the letter required by Independence Standards Board Standard No.&nbsp;1 (Independence Discussions with Audit
Committees). These items related to that firm's independence from Meritage. We also discussed with Deloitte&nbsp;&amp; Touche&nbsp;LLP those matters required to be discussed by Statement on Auditing
Standards No.&nbsp;61 (Communication with Audit Committees, as amended). Based on these reviews and discussions, we recommended to the Board that Meritage's audited financial statements be included
in its Annual Report on Form&nbsp;10-K for the fiscal year ended December&nbsp;31, 2007. </FONT></P>

<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
<UL>

<P style="font-family:times;"><FONT SIZE=2>THE
AUDIT COMMITTEE<BR>
Peter L. Ax&#151;Chairman<BR>
Raymond Oppel<BR>
Richard T. Burke, Sr. </FONT></P>

</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>52</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_dq77301_1_53"> </A>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dq77301_stockholder_proposals"> </A>
<A NAME="toc_dq77301_6"> </A>
<BR></FONT><FONT SIZE=2><B>STOCKHOLDER PROPOSALS    <BR>    </B></FONT></P>

<P style="font-family:times;">


<FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors and Nominating/Governance Committee will consider nominations from stockholders for the class of directors whose terms expire at the year
2009 Annual Meeting. Nominations must be made in writing to our Secretary, not earlier than the 150th day nor later than the 120th day prior to the first anniversary date of mailing of this proxy
statement, which is expected to occur on or about April&nbsp;7, 2008; provided, however, that in the event that the date of the 2009&nbsp;Annual Meeting is advanced or delayed by more than
30&nbsp;days from the first anniversary of the date of this year's annual meeting, which is to be held on May&nbsp;15, 2008, notice by the stockholder must be delivered not earlier than the 150th
day prior to the date of such annual meeting and not later than the later of the 120th day prior to the date of such annual meeting or the tenth day following the date on which public announcement of
the date of such meeting is first made, and contain sufficient background information concerning the nominee's qualifications and such other information as specified in our bylaws. Our Corporate
Secretary must receive any other stockholder proposals for the 2009 Annual Meeting by the same date, or December&nbsp;9, 2008 to be considered for inclusion in our 2009 proxy statement.

 </FONT>

</P>

<P style="font-family:times;"><FONT SIZE=2>


&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proposals to be presented at the 2009 Annual Meeting that are not intended for inclusion in the proxy statement must be submitted in accordance with our bylaws. To be timely, a
stockholder's notice of such a proposal must be delivered to or mailed and received by the Secretary at the principal executive offices of the Company, not earlier than the 150th day nor later than
the 120th day prior to the first anniversary date of mailing of this proxy statement, which is expected to occur on or about April&nbsp;7, 2008, (or, with respect to a proposal required to be
included in Meritage's proxy statement pursuant to Rule&nbsp;14a-8 of the Securities Exchange Act of 1934, or its successor provision, the earlier date such proposal was received); provided,
however, that in the event that the date of the 2009&nbsp;Annual Meeting is advanced or delayed by more than 30&nbsp;days from the first anniversary of the date of this year's annual meeting,
which is to be held on May&nbsp;15, 2008, notice by the stockholder must be delivered not earlier than the 150th day prior to the date of such annual meeting and not later than the later of the
120th day prior to the date of such annual meeting or the tenth day following the date on which public announcement of the date of such meeting is first made.


</FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
nomination or other proposal will be disregarded if it does not comply with the above procedures. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dq77301_form_10-k_annual_report"> </A>
<A NAME="toc_dq77301_7"> </A>
<BR></FONT><FONT SIZE=2><B>FORM 10-K ANNUAL REPORT    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>Along with this proxy statement, we have provided each stockholder entitled to vote, a copy of our Annual Report to Stockholders and
Annual Report on Form&nbsp;10-K. The Company incorporates herein the information set forth in Part&nbsp;II, Item&nbsp;5 of our Form&nbsp;10-K relating to the executive
officers of the Company.</B></FONT><FONT SIZE=2> The Company will provide, without charge, an additional copy of its Annual Report on Form&nbsp;10-K for the year ended
December&nbsp;31, 2007 (without the exhibits thereto) and/or a copy of the exhibits to its 2007 Form&nbsp;10-K, upon the written or oral request of any stockholder or beneficial owner
of its common stock. Requests should be directed to the Secretary of the Company at the address listed on page&nbsp;24. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dq77301_other_matters"> </A>
<A NAME="toc_dq77301_8"> </A>
<BR></FONT><FONT SIZE=2><B>OTHER MATTERS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors is not aware of any other matters to be presented at the meeting. If any other business should properly come before the meeting, the proxy
holders will vote according to their best judgment. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>53</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_dq77301_1_54"> </A>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dq77301_forward_looking_statements"> </A>
<A NAME="toc_dq77301_9"> </A>
<BR></FONT><FONT SIZE=2><B>FORWARD LOOKING STATEMENTS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This proxy statement contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are
based on management's current expectations and involve substantial risks and uncertainties, which may cause results to differ materially from those set forth in the statements. The forward-looking
statements may include, but are not limited to, statements made in the CD&amp;A section of this proxy statement regarding the anticipated effects of our compensation structure and programs and our
intentions with respect to the grant of equity-based awards in the future. Meritage undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information,
future events, or otherwise. Forward-looking statements should be evaluated together with the many uncertainties that affect Meritage's business, particularly those mentioned under the heading "Risk
Factors" in Meritage's Annual Report on Form&nbsp;10-K, and in the periodic reports that Meritage files with the SEC on Form&nbsp;10-Q and Form&nbsp;8-K. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="dq77301_electronic_delivery_of__dq702264"> </A>
<A NAME="toc_dq77301_10"> </A>
<BR></FONT><FONT SIZE=2><B>ELECTRONIC DELIVERY OF FUTURE ANNUAL MEETING MATERIALS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are offering our stockholders the opportunity to consent to receiving our future proxy materials and annual reports electronically by providing the appropriate
information when voting via the Internet. Electronic delivery could save us a significant portion of the costs associated with printing and mailing annual meeting materials, and we hope that our
stockholders find this service convenient and useful. If you consent and Meritage elects to deliver future proxy materials and/or annual reports to you electronically, then we will send you a notice
(either by electronic mail or regular mail) explaining how to access these materials but will not send you paper copies of these materials unless you request them. We may also choose to send one or
more items to you in paper form despite your consent to receive them electronically. Your consent will be effective until you revoke it by terminating your registration at the website </FONT> <FONT SIZE=2><I>www.InvestorDelivery.com</I></FONT><FONT
SIZE=2> if you hold shares at a brokerage firm or bank participating in the ADP program, or by contacting Mellon Investor Services if
you hold shares in your own name. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By
consenting to electronic delivery, you are stating to Meritage that you currently have access to the Internet and expect to have access in the future. If you do not have access to the
Internet, or do not expect to have access in the future, please do not consent to electronic delivery because we may rely on your consent and not deliver paper copies of future annual meeting
materials. In addition, if you consent to electronic delivery, you will be responsible for your usual Internet charges (e.g.,&nbsp;online fees) in connection with the electronic delivery of the
proxy materials and annual report. </FONT></P>




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<TD WIDTH="50%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="50%" style="font-family:times;"><FONT SIZE=2>Meritage Homes Corporation</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="50%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="50%" style="font-family:times;"><BR><FONT SIZE=2><B>
<IMG SRC="g257477.jpg" ALT="SIG" WIDTH="267" HEIGHT="82">
 </B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="50%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="50%" style="font-family:times;"><FONT SIZE=2><BR>
C. Timothy White<BR>
Executive Vice President, General Counsel<BR>
&nbsp;&nbsp;&nbsp;&nbsp;and Secretary<BR>
April&nbsp;1, 2008</FONT></TD>
</TR>
</TABLE>

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<BR></FONT><FONT SIZE=2><B>Appendix&nbsp;A    <BR>    </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>MERITAGE HOMES CORPORATION<BR>
2006 STOCK INCENTIVE PLAN  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>EFFECTIVE DATE: MAY 17, 2006<BR>
APPROVED BY STOCKHOLDERS: MAY 17, 2006<BR>
TERMINATION DATE: MAY 16, 2016  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>ARTICLE 1<BR>
PURPOSE  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1</FONT><FONT
SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;GENERAL</I></B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The purpose of the Meritage Homes Corporation 2006 Stock Incentive Plan
(the "</FONT><FONT SIZE=2><I>Plan</I></FONT><FONT SIZE=2>") is to promote the success and enhance the value of Meritage Homes Corporation (the
"</FONT><FONT SIZE=2><I>Company</I></FONT><FONT SIZE=2>") by linking the personal interests of the members of the Board, employees, officers, executives, consultants and advisors to those of Company
stockholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to Company stockholders. The Plan is further intended to provide flexibility
to the Company in its ability to motivate, attract, and retain the services of Board members, employees, officers, executives, consultants and advisors upon whose judgment, interest, and special
effort the successful conduct of the Company's operation is largely dependent. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>ARTICLE 2<BR>
EFFECTIVE AND EXPIRATION DATE  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>EFFECTIVE DATE.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Plan is effective as of the date the Plan is approved by the
Company's stockholders (the "</FONT><FONT SIZE=2><I>Effective Date</I></FONT><FONT SIZE=2>"). </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>EXPIRATION DATE.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Plan will expire on, and no Award may be granted under the Plan
after, the tenth anniversary of the Effective Date. Any Awards that are outstanding on the tenth anniversary of the Effective Date shall remain in force according to the terms of the Plan and the
Award Agreement. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>ARTICLE 3<BR>
DEFINITIONS AND CONSTRUCTION  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>DEFINITIONS.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The following words and phrases shall have the following meanings: </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Award</I></FONT><FONT SIZE=2>" means any Option, Stock Appreciation Right, Restricted Stock Award, Performance Share Award, or Performance-Based
Award granted to a Participant under the Plan. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Award Agreement</I></FONT><FONT SIZE=2>" means any written agreement, contract, or other instrument or document evidencing an Award. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Board</I></FONT><FONT SIZE=2>" means the Board of Directors of the Company. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Cause</I></FONT><FONT SIZE=2>" means and will exist in the following circumstances in which the Participant: (i)&nbsp;is convicted of a
felony, (ii)&nbsp;engages in any fraudulent or other dishonest act to the detriment of the Company, (iii)&nbsp;fails to report for work on a regular basis, except for periods of authorized absence
or bona fide illness, (iv)&nbsp;misappropriates trade secrets, customer lists, or other proprietary information belonging to the Company for his or her own benefit or for the benefit of a
competitor, (v)&nbsp;engages in any willful
misconduct designed to harm the Company or its stockholders, or (vi)&nbsp;fails to perform properly his or her assigned duties. </FONT></P>

</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>A-1</FONT></P>

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<UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Change of Control</I></FONT><FONT SIZE=2>" means and includes each of the following: </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;A
sale, transfer, or other disposition by the Company through a single transaction or a series of transactions of securities of the Company representing 50% or more of
the combined voting power of the Company's then outstanding securities to any "Unrelated Person" or "Unrelated Persons" acting in concert with one another. For purposes of this definition, the term
"Person" shall mean and include any individual, partnership, joint venture, association, trust, corporation, or other entity (including a "group" as referred to in Section&nbsp;13(d)(3) of the
Exchange Act). For purposes of this definition, the term "Unrelated Person" shall mean and include any Person other than the Company, or an employee benefit plan of the Company; or </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;A
sale, transfer, or other disposition through a single transaction or a series of related transactions of all or substantially all of the assets of the Company to an
Unrelated Person or Unrelated Persons acting in concert with one another; or </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;Any
consolidation or merger of the Company with or into an Unrelated Person, unless immediately after the consolidation or merger the holders of the common stock of the
Company immediately prior to the consolidation or merger are the beneficial owners of securities of the surviving corporation representing at least 50% of the combined voting power of the surviving
corporation's then outstanding securities. </FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Code</I></FONT><FONT SIZE=2>" means the Internal Revenue Code of 1986, as amended. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Committee</I></FONT><FONT SIZE=2>" means the committee of the Board described in Section&nbsp;4.1. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Covered Employee</I></FONT><FONT SIZE=2>" means an employee who is, or could be, a "covered employee" within the meaning of
Section&nbsp;162(m) of the Code. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Disability</I></FONT><FONT SIZE=2>" means, for purposes of this Plan, that the Participant qualifies to receive long term disability payments
under the Company's long term disability insurance program, as it may be amended from time to time. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Exchange Act</I></FONT><FONT SIZE=2>" means the Securities Exchange Act of 1934, as amended. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Fair Market Value</I></FONT><FONT SIZE=2>" means, as of any given date, the fair market value of Stock on a particular date determined by such
methods or procedures as may be established from time to time by the Committee. Unless otherwise determined by the Committee, the Fair Market Value of Stock as of any date shall be the closing price
for the Stock as reported on the New York Stock Exchange (or on any national securities exchange on which the Stock is then listed) for that date or, if no such prices are reported for that date, the
average of the high and low trading prices on the next preceding date for which such prices were reported. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Incentive Stock Option</I></FONT><FONT SIZE=2>" means an Option that is intended to meet the requirements of Section&nbsp;422 of the Code or
any successor provision thereto. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Non-Employee Director</I></FONT><FONT SIZE=2>" means a member of the Board who qualifies as a "Non-Employee Director" as
defined in Rule&nbsp;16b-3(b)(3) of the Exchange Act, or any successor definition adopted by the Board. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Non-Qualified Stock Option</I></FONT><FONT SIZE=2>" means an Option that is not intended to be an Incentive Stock Option. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Option</I></FONT><FONT SIZE=2>" means a right granted to a Participant pursuant to Article&nbsp;7 of the Plan to purchase Stock at a specified
price during specified time periods. An Option may be either an Incentive Stock Option or a Non-Qualified Stock Option. </FONT></P>

</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>A-2</FONT></P>

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<UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Participant</I></FONT><FONT SIZE=2>" means a person who, as a member of the Board, employee, officer, or executive of, or consultant or advisor
to, the Company or any Subsidiary, has been granted an Award pursuant to the Plan. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Performance-Based Awards</I></FONT><FONT SIZE=2>" means the Performance Share Awards and Restricted Stock Awards granted to select Covered
Employees pursuant to Articles&nbsp;9 and 10, respectively, but which are subject to the terms and conditions set forth in Article&nbsp;11. All Performance-Based Awards are intended to qualify as
"performance-based compensation" pursuant to Section&nbsp;162(m) of the Code. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Performance Criteria</I></FONT><FONT SIZE=2>" means the criteria that the Committee selects for purposes of establishing the Performance Goal or
Performance Goals for a Participant for a Performance Period. The Performance Criteria that will be used to establish Performance Goals are limited to the following: pre- or
after-tax net earnings, earnings before interest expense (including interest amortized to cost of sales) and income taxes ("EBIT"), earnings before interest expense (including interest
amortized to cost of sales), income taxes, depreciation and amortization ("EBITDA"), revenue growth, operating income, operating cash flow, return on net assets, return on shareholders' equity, return
on assets, return on capital, share price growth, shareholder returns, gross or net profit margin, earnings per share, price per share, and market share, any of which may be measured either in
absolute terms or as compared to any incremental increase or as compared to results of a peer group. The Committee shall, within the time prescribed by Section&nbsp;162(m) of the Code, define in an
objective fashion the manner of calculating the Performance Criteria it selects to use for such Performance Period for such Participant. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s)&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Performance Goals</I></FONT><FONT SIZE=2>" means, for a Performance Period, the goals established in writing by the Committee for the
Performance Period based upon the Performance Criteria. Depending on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms of overall
Company performance or the performance of a division, business unit, or an individual. The Committee, in its discretion, may, within the time prescribed by Section&nbsp;162(m) of the Code, adjust or
modify the calculation of Performance Goals for such Performance Period in order to prevent the dilution or enlargement of the rights of Participants (i)&nbsp;in the event of, or in anticipation of,
any unusual or extraordinary corporate item, transaction, event, or development, or (ii)&nbsp;in recognition of, or in anticipation of, any other unusual or nonrecurring events affecting the
Company, or the financial statements of the Company, or in response to, or in anticipation of, changes in applicable laws, regulations, accounting principles, or business conditions. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t)&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Performance Period</I></FONT><FONT SIZE=2>" means the one or more periods of time, which may be of varying and overlapping durations, as the
Committee may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant's right to, and the payment of, a Performance-Based
Award. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u)&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Performance Share Award</I></FONT><FONT SIZE=2>" means a right granted to a Participant pursuant to Article&nbsp;9, to receive cash, Stock, or
other Awards, the payment of which is contingent upon achieving certain performance goals established by the Committee. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Plan</I></FONT><FONT SIZE=2>" means this Meritage Homes Corporation 2006 Stock Incentive Plan, as amended. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w)&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Restricted Stock Award</I></FONT><FONT SIZE=2>" means Stock granted to a Participant pursuant to Article&nbsp;10 that is subject to certain
restrictions and to risk of forfeiture. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Stock</I></FONT><FONT SIZE=2>" means the common stock of the Company and such other securities of the Company that may be substituted for Stock
pursuant to Article&nbsp;13. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y)&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Stock Appreciation Right</I></FONT><FONT SIZE=2>" or "</FONT><FONT SIZE=2><I>SAR</I></FONT><FONT SIZE=2>" means a right granted to a
Participant under Article&nbsp;8 to receive the appreciation on Stock. </FONT></P>

</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>A-3</FONT></P>

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<UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z)&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Subsidiary</I></FONT><FONT SIZE=2>" means any corporation or other entity of which a majority of the outstanding voting stock or voting power is
beneficially owned directly or indirectly by the Company. </FONT></P>

</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>ARTICLE 4<BR>
ADMINISTRATION  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>COMMITTEE.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Plan shall be administered by the Executive Compensation Committee of
the Board. The Committee (or subcommittee thereof) shall consist of at least two individuals, each of whom qualifies as (i)&nbsp;a Non-Employee Director, and (ii)&nbsp;an "outside
director" pursuant to Section&nbsp;162(m) of the Code and the regulations issued thereunder. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>ACTION BY THE COMMITTEE.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;A majority of the Committee shall constitute a quorum. The
acts of a majority of the members present at any meeting at which a quorum is present, and acts approved in writing by a majority of the Committee in lieu of a meeting, shall be deemed the acts of the
Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any
Subsidiary, the Company's independent registered public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>AUTHORITY OF COMMITTEE.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Subject to any specific designation in the Plan, the
Committee has the exclusive power, authority and discretion to: </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;designate
Participants to receive Awards; </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;determine
the type or types of Awards to be granted to each Participant; </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;determine
the number of Awards to be granted and the number of shares of Stock to which an Award will relate; </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;determine
the terms and conditions of any Award granted pursuant to the Plan, including, but not limited to, the exercise price, grant price, or purchase price, any
restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof, based in each case
on such considerations as the Committee in its sole discretion determines; provided, however, that the Committee shall not (i)&nbsp;have the authority to accelerate the vesting or waive the
forfeiture of any Performance-Based Awards, or (ii)&nbsp;take any action or fail to take any action with respect to the operation of the Plan that would cause all or part of the payment under any
Award to be subject to the additional tax under Section&nbsp;409A of the Code; </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;determine
whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price of an Award may be paid in, cash, Stock, other
Awards, or other property, or an Award may be canceled, forfeited, or surrendered; </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;prescribe
the form of each Award Agreement, which need not be identical for each Participant; </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;decide
all other matters that must be determined in connection with an Award; </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;establish,
adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan; </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;interpret
the terms of, and any matter arising pursuant to, the Plan or any Award Agreement; and </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;make
all other decisions and determinations that may be required pursuant to the Plan or as the Committee deems necessary or advisable to administer the Plan. </FONT></P>

</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>A-4</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>DECISIONS BINDING.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Committee's interpretation of the Plan, any Awards granted
pursuant to the Plan, any Award Agreement and all decisions and determinations by the Committee with respect to the Plan are final, binding, and conclusive on all parties. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>ARTICLE 5<BR>
SHARES SUBJECT TO THE PLAN  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>NUMBER OF SHARES.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>Subject to adjustment provided in
Article&nbsp;13, the aggregate number of shares of Stock reserved and available for grant pursuant to the Plan shall be 1,600,000, plus (i)&nbsp;the number of shares of Stock available for grant
pursuant to the Meritage Homes Corporation Stock Option Plan ("Prior Plan") as of the Effective Date, and (ii)&nbsp;the number of shares of Stock that were previously granted pursuant to the Prior
Plan and that either terminate, expire, or lapse for any reason after the Effective Date.</B></FONT><FONT SIZE=2> Any shares of Stock issued in connection with Awards other than Options and Stock
Appreciation Rights shall be counted against the shares available for grant pursuant to the previous sentence as 1.38 shares for every one share issued in connection with such Award or by which the
Award is valued by reference. Notwithstanding the above, the maximum number of shares of Stock that may be awarded as Incentive Stock Options under the Plan is 1,200,000. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>LAPSED OR ASSUMED AWARDS.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;To the extent that an Award terminates, expires, or lapses
for any reason, any shares of Stock subject to the Award will again be available for the grant of an Award pursuant to the Plan. Additionally, to the maximum extent permitted by applicable law or any
securities exchange rule, shares of Stock issued in assumption of, or in substitution for, any outstanding awards of any entity acquired in any form of combination by the Company or any Subsidiary
shall not be counted against shares of Stock available for grant pursuant to this Plan. However, for avoidance of doubt, the exercise of a stock-settled SAR or net-cashless exercise of an
Option (or a portion thereof) will reduce the number of shares of Stock available for issuance hereunder by the entire number of shares of Stock subject to that SAR or Option (or applicable portion
thereof), even though a smaller number of shares of Stock will be issued upon such an exercise. Also, shares of Stock tendered to pay the exercise price of an Option or to satisfy a tax withholding
obligation arising in connection with an Award will not become available for grant or sale under the Plan. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>STOCK DISTRIBUTED.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Any Stock distributed pursuant to an Award may consist, in whole
or in part, of authorized and unissued Stock, treasury Stock or Stock purchased on the open market. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>LIMITATION ON NUMBER OF SHARES SUBJECT TO
AWARDS.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>Notwithstanding any provision in the Plan to the contrary, and subject to the adjustment in Article&nbsp;13, the maximum number
of shares (counted, as described in Section&nbsp;5.1 above, as 1.38 shares awarded for every one share issued in connection with such Award or by which the Award is valued by reference) of Stock
with respect to one or more Awards that may be granted to any one Participant during a calendar year shall be 250,000</B></FONT><FONT SIZE=2>. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>ARTICLE 6<BR>
ELIGIBILITY AND PARTICIPATION  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>ELIGIBILITY.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>General.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Persons eligible to participate in this Plan include all members of the
Board, employees, officers, and executives of, and consultants and advisors providing services to, the Company or a Subsidiary, as determined by the Committee. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>Foreign Participants.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In order to assure the viability of Awards granted to
Participants employed in foreign countries, the Committee may provide for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy, or custom.
Moreover, the Committee may approve such supplements to, or amendments, restatements, or </FONT></P>

</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>A-5</FONT></P>

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<UL>
<BR>

<P style="font-family:times;"><FONT SIZE=2>alternative
versions of, the Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of the Plan as in effect for any other purpose; provided, however,
that no such supplements, amendments, restatements, or alternative versions shall increase the share limitations contained in Article&nbsp;5 of the Plan. </FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>ACTUAL PARTICIPATION.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Subject to the provisions of the Plan, the Committee may, from
time to time, select from among all eligible individuals, those to whom Awards shall be granted and shall determine the nature and amount of each Award. No individual shall have any right to be
granted an Award pursuant to this Plan. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>ARTICLE 7<BR>
STOCK OPTIONS  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>GENERAL.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Committee is authorized to grant Options to Participants on the
following terms and conditions: </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>Exercise Price.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The exercise price per share of Stock pursuant to an Option shall be
determined by the Committee and set forth in the Award Agreement; provided that the exercise price for any Option shall not be less than the Fair Market Value as of the date of grant. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>Time and Conditions of Exercise.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall determine the time or times at
which an Option may be exercised in whole or in part provided that the term of any Option granted under the Plan shall not exceed ten years. The Committee shall also determine the performance or other
conditions, if any, that must be satisfied before all or part of an Option may be exercised. Unless otherwise provided in an Award Agreement, an Option will lapse immediately if a Participant's
employment is terminated for Cause. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>Payment.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall determine the methods by which the exercise price of an
Option may be paid, the form of payment, including, without limitation, cash, promissory note, shares of Stock held for longer than six months (through actual tender or by attestation), or other
property acceptable to the Committee (including broker-assisted "cashless exercise" arrangements), and the methods by which shares of Stock shall be delivered or deemed to be delivered to
Participants. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>Evidence of Grant.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;All Options shall be evidenced by a written Award Agreement
between the Company and the Participant in the form attached to this Plan as Exhibit&nbsp;A. The Award Agreement shall include such additional provisions as may be specified by the Committee. </FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2</FONT><FONT
SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;INCENTIVE STOCK OPTIONS</I></B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Incentive Stock Options shall be granted only to employees
and the terms of any Incentive Stock Options granted pursuant to the Plan must comply with the following additional provisions of this Section&nbsp;7.2: </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>Exercise Price.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Subject to Section&nbsp;7.2(d), the exercise price per share of
Stock shall be set by the Committee, provided that the exercise price for any Incentive Stock Option may not be less than the Fair Market Value as of the date of the grant. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>Exercise.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In no event, may any Incentive Stock Option be exercisable for more than
ten years from the date of its grant. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>Lapse of Option.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;An Incentive Stock Option shall lapse pursuant to the following
circumstances. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;The
Incentive Stock Option shall lapse ten years from the date it is granted, unless an earlier time is set in the Award Agreement. </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>A-6</FONT></P>

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<UL>
<UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;The
Incentive Stock Option shall lapse upon termination of employment for Cause or for any other reason other than the Participant's death or Disability, unless
otherwise provided in the Award Agreement. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;If
the Participant terminates employment on account of Disability or death before the Option lapses pursuant to paragraph&nbsp;(1) or (2)&nbsp;above, the Incentive
Stock Option shall lapse, unless it is previously exercised, on the earlier of (i)&nbsp;the scheduled termination date of the Option; or (ii)&nbsp;12&nbsp;months after the date of the
Participant's termination of employment on account of Disability or death. Upon the Participant's Disability or death, any Incentive Stock Options exercisable at the Participant's Disability or death
may be exercised by the Participant's legal representative or representatives, by the person or persons entitled to do so pursuant to the Participant's last will and testament, or, if the Participant
fails to make testamentary disposition of such Incentive Stock Option or dies intestate, by the person or persons entitled to receive the Incentive Stock Option pursuant to the applicable laws of
descent and distribution. </FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>Individual Dollar Limitation.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The aggregate Fair Market Value (determined as of the
time an Award is made) of all shares of Stock with respect to which Incentive Stock Options are first exercisable by a Participant in any calendar year may not exceed $100,000.00 or such other
limitation as imposed by Section&nbsp;422(d) of the Code, or any successor provision. To the extent that Incentive Stock Options are first exercisable by a Participant in excess of such limitation,
the excess shall be considered Non-Qualified Stock Options. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>Ten Percent Owners.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;An Incentive Stock Option shall be granted to any individual
who, at the date of grant, owns stock possessing more than ten percent of the total combined voting power of all classes of Stock of the Company only if such Option is granted at a price that is not
less than 110% of Fair Market Value on the date of grant and the Option is exercisable for no more than five years from the date of grant. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>Expiration of Incentive Stock Options.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No Award of an Incentive Stock Option may be
made pursuant to this Plan after the tenth anniversary of the Effective Date. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>Right to Exercise.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Except as provided in Section&nbsp;12.5, during a Participant's
lifetime, an Incentive Stock Option may be exercised only by the Participant. </FONT></P>

</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>ARTICLE 8<BR>
STOCK APPRECIATION RIGHTS  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Grant Of SARs.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Committee is authorized to grant SARs to Participants on the
following terms and conditions: </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>Right to Payment.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Upon the exercise of a SAR, the Participant to whom it is granted
has the right to receive the excess, if any, of: </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;the
Fair Market Value of a share of Stock on the date of exercise; over </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;the
grant price of the SAR as determined by the Committee, which shall not be less than the Fair Market Value of a share of Stock on the date of grant. </FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>Term.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The term of each SAR shall not exceed ten years from the date of grant. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>Other Terms.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;All SARs grants will be evidenced by an Award Agreement. The terms,
methods of exercise, methods of settlement, and any other terms and conditions of any SAR will be determined by the Committee at the time of the grant of the Award and as set forth in the Award
Agreement; provided that the form of consideration payable in settlement of a SAR shall be Stock. </FONT></P>

</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>A-7</FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>ARTICLE 9<BR>
PERFORMANCE SHARES  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>GRANT OF PERFORMANCE SHARES.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Committee is authorized to grant Performance Shares
to Participants on such terms and conditions as may be selected by the Committee. The Committee shall have the complete discretion to determine the number of Performance Shares granted to each
Participant. All Awards of Performance Shares shall be evidenced by an Award Agreement. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>RIGHT TO PAYMENT.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;A grant of Performance Shares gives the Participant rights, valued
as determined by the Committee, and payable to, or exercisable by, the Participant to whom the Performance Shares are granted, in whole or in part, as the Committee shall establish at grant or
thereafter. Subject to the terms of the Plan, the Committee shall set performance goals and other terms or conditions to payment of the Performance Shares in its discretion which, depending on the
extent to which they are met, will determine the number and value of Performance Shares that will be paid to the Participant. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>OTHER TERMS.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Performance Shares may be payable in cash, Stock, or other property,
and have such other terms and conditions as determined by the Committee and reflected in a written Performance Share Award Agreement. Unless otherwise provided in an Award Agreement, Performance
Shares will lapse immediately if a Participant's employment is terminated for Cause. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>ARTICLE 10<BR>
RESTRICTED STOCK AWARDS  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>GRANT OF RESTRICTED STOCK.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Committee is authorized to make Awards of Restricted
Stock to Participants in such amounts and subject to such terms and conditions as determined by the Committee. All Awards of Restricted Stock shall be evidenced by a written Restricted Stock Award
Agreement. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>ISSUANCE AND RESTRICTIONS.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Restricted Stock shall be subject to such restrictions
on transferability and other restrictions as the Committee may impose (including, without limitation, limitations on the right to vote Restricted Stock or the right to receive dividends on the
Restricted Stock). These restrictions may lapse separately or in combination at such times, pursuant to such circumstances, in such installments, or otherwise, as the Committee determines at the time
of the grant of the Award or thereafter. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>FORFEITURE.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Except as otherwise determined by the Committee at the time of the
grant of the Award or thereafter, upon termination of employment during the applicable restriction period, Restricted Stock that is at that time subject to restrictions shall be forfeited; provided,
however, that the Committee may provide in any Restricted Stock Award Agreement that restrictions or forfeiture conditions relating to Restricted Stock will be waived in whole or in part in the event
of terminations resulting from specified causes, and the Committee may in other cases waive in whole or in part restrictions or forfeiture conditions relating to Restricted Stock. Unless otherwise
provided in an Award Agreement, Restricted Stock will be forfeited immediately if a Participant's employment is terminated for Cause. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.4</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>CERTIFICATES FOR RESTRICTED STOCK.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Restricted Stock granted pursuant to the Plan
may be evidenced in such manner as the Committee shall determine. If certificates representing shares of Restricted Stock are registered in the name of the Participant, certificates must bear an
appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock, and the Company may, at its discretion, retain physical possession of the certificate until
such time as all applicable restrictions lapse. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>A-8</FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>ARTICLE 11<BR>
PERFORMANCE-BASED AWARDS  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>PURPOSE.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The purpose of this Article&nbsp;11 is to provide the Committee the
ability to qualify the Performance Share Awards pursuant to Article&nbsp;9 and the Restricted Stock Awards pursuant to Article&nbsp;10 as "performance-based compensation" pursuant to
Section&nbsp;162(m) of the Code. If the Committee, in its discretion, decides to grant a Performance-Based Award to a Covered Employee, the provisions of this Article&nbsp;11 shall control over
any contrary provision contained in Articles&nbsp;9 or 10. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>APPLICABILITY.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This Article&nbsp;11 shall apply only to those Covered Employees
selected by the Committee to receive Performance-Based Awards. The Committee may, in its discretion, grant Restricted Stock Awards or Performance Share Awards to Covered Employees that do not satisfy
the requirements of this Article&nbsp;11. The designation of a Covered Employee as a Participant for a Performance Period shall not in any manner entitle the Participant to receive an Award for the
period. Moreover, designation of a Covered Employee as a Participant for a particular Performance Period shall not require designation of such Covered Employee as a Participant in any subsequent
Performance Period and designation of one Covered Employee as a Participant shall not require designation of any other Covered Employees as a Participant in such period or in any other period. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>DISCRETION OF COMMITTEE WITH RESPECT TO PERFORMANCE AWARDS.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;With regard to a
particular Performance Period, the Committee shall have full discretion to select the length of such Performance Period, the type of Performance-Based Awards to be issued, the kind and/or level of the
Performance Goal, and whether the Performance Goal is to apply to the Company, a Subsidiary or any division or business unit thereof. Unless otherwise provided in an Award Agreement, Performance-
Based Awards will be forfeited if a Participant's employment is terminated for Cause. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.4</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>PAYMENT OF PERFORMANCE AWARDS.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Unless otherwise provided in the relevant Award
Agreement, a Participant must be employed by the Company or a Subsidiary on the day a Performance Award for such Performance Period is paid to the Participant. Furthermore, a Participant shall be
eligible to receive payment pursuant to a Performance-Based Award for a Performance Period only if the Performance Goals for such period are achieved. In determining the actual size of an individual
Performance-Based Award, the Committee may reduce or eliminate the amount of the Performance-Based Award earned for the Performance Period, if in its sole and absolute discretion, such reduction or
elimination is appropriate. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.5</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>MAXIMUM AWARD PAYABLE.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>The maximum Performance-Based Award
payable to any one Participant pursuant to the Plan for a Performance Period is 250,000 shares (counted, as described in Section&nbsp;5.1 above, as 1.38 shares awarded for every one share issued in
connection with such Award or by which the Award is valued by reference) of Stock.</B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>ARTICLE 12<BR>
PROVISIONS APPLICABLE TO AWARDS  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>STAND-ALONE AND TANDEM AWARDS.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Awards granted pursuant to the Plan may, in the
discretion of the Committee, be granted either alone, in addition to, or in tandem with, any other Award granted pursuant to the Plan. Awards granted in addition to or in tandem with other Awards may
be granted either at the same time as or at a different time from the grant of such other Awards. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>TERM OF AWARD.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The term of each Award shall be for the period as determined by the
Committee, provided that in no event shall the term of any Option or Stock Appreciation Right granted in tandem with the Incentive Stock Option exceed a period of ten years from the date of its grant. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>FORM OF PAYMENT FOR AWARDS.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Subject to the terms of the Plan and any applicable law
or Award Agreement, payments or transfers to be made by the Company or a Subsidiary on the </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>A-9</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2>grant
or exercise of an Award may be made in such forms as the Committee determines at or after the time of grant, including, without limitation, cash, promissory note, Stock held for more than six
months, other Awards, or other property, or any combination, and may be made in a single payment or transfer, in installments, or on a deferred basis, in each case determined in accordance with rules
adopted by, and at the discretion of, the Committee. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>LIMITS ON TRANSFER.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>General.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Except as provided in Section&nbsp;12.4(b) or Section&nbsp;12.5, no
right or interest of a Participant in any Award may be pledged, encumbered, or hypothecated to, or in favor of, any party other than the Company or a Subsidiary, or shall be subject to any lien,
obligation, or liability of such Participant to any other party other than the Company or a Subsidiary. Except as provided in Section&nbsp;12.4(b) or Section&nbsp;12.5, and except as otherwise
provided by the Committee, no Award shall be assigned, transferred, or otherwise disposed of by a Participant other than by will or the laws of descent and distribution. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>Transfers to Family Members.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall have the authority, in its
discretion, to grant (or to sanction by way of amendment to an existing Award) Awards which may be transferred by the Participant during his or her lifetime to any Family Member (as defined below).
Unless transfers for the Participant have been previously approved by the Committee, a transfer of an Award pursuant hereto may only be affected by the Company at the written request of the
Participant. In the event an Award is transferred as contemplated herein, such transferred Award may not be subsequently transferred by the transferee (other than another transfer meeting the
conditions herein) except by will or the laws of descent and distribution. A transferred Award shall continue to be governed by and subject to the terms and limitations of the Plan and relevant Award
Agreement, and the transferee shall be entitled to the same rights as the Participant, as if the transfer had not taken place. For purposes of this Section&nbsp;12.4(b), the term "Family Member"
means spouse and any parent, stepparent, grandparent, child, stepchild, or grandchild, including adoptive relationships or a trust or any other entity in which these persons (or the Participant) have
more than 50% of the beneficial interest. </FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>BENEFICIARIES.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding Section&nbsp;12.4, a Participant may, in the
manner determined by the Committee, designate a beneficiary to exercise the rights of the Participant and to receive any distribution with respect to any Award upon the Participant's death. A
beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and conditions of the Plan and any Award Agreement applicable to the
Participant, except to the extent the Plan and Award Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Committee. If the Participant is married and
resides in a community property state, a designation of a person other than the Participant's spouse as his beneficiary with respect to more than 50% of the Participant's interest in the Award shall
not be effective without the prior written consent of the Participant's spouse. If no beneficiary has been designated or survives the Participant, payment shall be made to the person entitled thereto
pursuant to the Participant's will or the laws of
descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Participant at any time provided the change or revocation is provided to the Committee. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.6</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>STOCK CERTIFICATES.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything herein to the contrary, the Company
shall not be required to issue or deliver any certificates evidencing shares of Stock pursuant to the exercise of any Award, unless and until the Board has determined, with advice of counsel, that the
issuance and delivery of such certificates is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the shares
of Stock are listed or traded. All Stock certificates delivered pursuant to the Plan are subject to any stop-transfer orders and other restrictions as the Committee deems necessary or
advisable to comply with Federal, state, or foreign jurisdiction, securities or other laws, rules and regulations and the rules </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>A-10</FONT></P>

<HR NOSHADE>
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<BR>

<P style="font-family:times;"><FONT SIZE=2>of
any national securities exchange or automated quotation system on which the Stock is listed, quoted, or traded. The Committee may place legends on any Stock certificate to reference restrictions
applicable to the Stock. In addition to the terms and conditions provided herein, the Board may require that a Participant make such reasonable covenants, agreements, and representations as the Board,
in its discretion, deems advisable in order to comply with any such laws, regulations, or requirements. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.7</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>ACCELERATION UPON A CHANGE OF CONTROL.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If a Change of Control occurs and Awards are
converted, assumed, or replaced by a successor, the Committee shall have the discretion to cause all outstanding Awards to become fully exercisable and all restrictions on outstanding Awards to lapse.
If a Change of Control occurs and Awards are not converted, assumed, or replaced by a successor, all outstanding Awards shall automatically become fully exercisable and all restrictions on outstanding
Awards shall lapse. To the extent that this provision causes Incentive Stock Options to exceed the dollar limitation set forth in Section&nbsp;7.2(d), the excess Options shall be deemed to be
Non-Qualified Stock Options. Upon, or in anticipation of, such an event, the Committee may cause every Award outstanding hereunder to terminate at a specific time in the future and shall
give each Participant the right to exercise Awards during a period of time as the Committee, in its sole and absolute discretion, shall determine. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>ARTICLE 13<BR>
CHANGES IN CAPITAL STRUCTURE  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>SHARES AVAILABLE FOR GRANT.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In the event of any change in the number of shares of
Stock outstanding by reason of any stock dividend or split, recapitalization, merger, consolidation, combination or exchange of shares or similar corporate change, the maximum aggregate number of
shares of Stock with respect to which the Committee may grant Awards, the number of shares of Stock
subject to any Award, and any numeric limitation expressed in the Plan shall be appropriately adjusted by the Committee. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.2</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>OUTSTANDING AWARDS&#151;INCREASE OR DECREASE IN ISSUED SHARES WITHOUT
CONSIDERATION.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Subject to any required action by the stockholders of the Company, in the event of any increase or decrease in the number of issued shares of Stock
resulting from a subdivision or consolidation of shares of Stock or the payment of a stock dividend (but only on the shares of Stock), or any other increase or decrease in the number of such shares
effected without receipt or payment of consideration by the Company, the Committee shall proportionally adjust the number of shares of Stock subject to each outstanding Award and the exercise price
per share of Stock of each such Award. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.3</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>OUTSTANDING AWARDS&#151;CERTAIN MERGERS.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Subject to any required action by
the stockholders of the Company, in the event that the Company shall be the surviving corporation in any merger or consolidation (except a merger or consolidation as a result of which the holders of
shares of Stock receive securities of another corporation), each Award outstanding on the date of such merger or consolidation shall pertain to and apply to the securities that a holder of the number
of shares of Stock subject to such Award would have received in such merger or consolidation. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.4</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>OUTSTANDING AWARDS&#151;OTHER CHANGES.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In the event of any other change in
the capitalization of the Company or corporate change other than those specifically referred to in Article&nbsp;13, the Committee may, in its absolute discretion, make such adjustments in the number
and class of shares subject to Awards outstanding on the date on which such change occurs and in the per share exercise price of each Award as the Committee may consider appropriate to prevent the
dilution or enlargement of rights relating to Awards granted under the Plan. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.5</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>NO OTHER RIGHTS.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Except as expressly provided in the Plan, no Participant shall
have any rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend, any increase or decrease in the number of shares of stock of any class or
any dissolution, </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>A-11</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2>liquidation,
merger, or consolidation of the Company or any other corporation. Except as expressly provided in the Plan, no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of shares of Stock subject to an Award or the exercise price
of any Award. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>ARTICLE 14<BR>
AMENDMENT, MODIFICATION, AND TERMINATION  </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.1</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>AMENDMENT, MODIFICATION, AND TERMINATION.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;With the approval of the Board, at any
time and from time to time, the Committee may terminate, amend or modify the Plan; provided, however, that (i)&nbsp;to the extent necessary and desirable to comply with any applicable law,
regulation, or stock exchange rule, the Company shall obtain stockholder approval of any Plan amendment in such a manner and to such a degree as required, (ii)&nbsp;shareholder approval is required
for any amendment to the Plan that (A)&nbsp;increases the number of shares available under the Plan (other than any adjustment as provided by Article&nbsp;13), (B)&nbsp;permits the Committee to
grant Options with an exercise price that is below Fair Market Value on the date of grant, (C)&nbsp;permits the Committee to extend the exercise period for an Option beyond ten years from the date
of grant, or (D)&nbsp;permits the Committee to reprice previously granted Options, and (iii)&nbsp;no such action shall be taken that would cause all or part of the payment under any Award to be
subject to the additional tax under Section&nbsp;409A of the Code. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.2</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>AWARDS PREVIOUSLY GRANTED.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No termination, amendment, or modification of the Plan
shall adversely affect in any material way any Award previously granted pursuant to the Plan without the prior written consent of the Participant. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>ARTICLE 15<BR>
GENERAL PROVISIONS  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.1</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>NO RIGHTS TO AWARDS.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No Participant, employee, or other person shall have any claim
to be granted any Award pursuant to the Plan, and neither the Company nor the Committee is obligated to treat Participants, employees, and other persons uniformly. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.2</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>NO STOCKHOLDERS RIGHTS.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No Award gives the Participant any of the rights of a
stockholder of the Company unless and until shares of Stock are in fact issued to such person in connection with such Award. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.3</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>WITHHOLDING.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company or any Subsidiary shall have the authority and the right
to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy Federal, state, and local taxes (including the Participant's FICA obligation) required by law
to be withheld with respect to any taxable event concerning a Participant arising as a result of this Plan. With the Committee's consent, a Participant may elect to (i)&nbsp;have the Company
withhold from those shares of Stock that would otherwise be received upon the exercise of any Option, a number of shares having a
Fair Market Value equal to the minimum statutory amount necessary to satisfy the Company's applicable federal, state, local or foreign income and employment tax withholding obligations with respect to
such Participant, or (ii)&nbsp;tender previously-owned shares of Stock held by the Participant for six months or longer to satisfy the Company's applicable federal, state, local, or foreign income
and employment tax withholding obligations with respect to the Participant. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.4</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>NO RIGHT TO EMPLOYMENT OR SERVICES.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Nothing in the Plan or any Award Agreement
shall interfere with or limit in any way the right of the Company or any Subsidiary to terminate any Participant's employment or services at any time, nor confer upon any Participant any right to
continue in the employ or service of the Company or any Subsidiary. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>A-12</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.5</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>UNFUNDED STATUS OF AWARDS.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Plan is intended to be an "unfunded" plan for
incentive compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give the Participant any rights that
are greater than those of a general creditor of the Company or any Subsidiary. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.6</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>INDEMNIFICATION.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;To the extent allowable pursuant to applicable law, each member of
the Committee or of the Board shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in
connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to
the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her provided he or she gives the Company an
opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Company's Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any power
that the Company may have to indemnify them or hold them harmless. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.7</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>RELATIONSHIP TO OTHER BENEFITS.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No payment pursuant to the Plan shall be taken into
account in determining any benefits pursuant to any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.8</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>EXPENSES.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The expenses of administering the Plan shall be borne by the Company and
its Subsidiaries. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.9</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>TITLES AND HEADINGS.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The titles and headings of the Sections in the Plan are for
convenience of reference only and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.10</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>FRACTIONAL SHARES.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No fractional shares of Stock shall be issued and the Committee
shall determine, in its discretion, whether cash shall be given in lieu of fractional shares or whether such fractional shares shall be eliminated by rounding up or down as appropriate. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.11</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>SECURITIES LAW COMPLIANCE.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;With respect to any person who is, on the relevant
date, obligated to file reports pursuant to Section&nbsp;16 of the Exchange Act, transactions pursuant to this Plan are intended to comply with all applicable conditions of
Rule&nbsp;16b-3 or its successors pursuant to the Exchange Act. To the extent any provision of the Plan or action by the Committee fails to so comply, it shall be void to the extent
permitted by law and voidable as deemed advisable by the Committee. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.12</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>GOVERNMENT AND OTHER REGULATIONS.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The obligation of the Company to make payment of
awards in Stock or otherwise shall be subject to all applicable laws, rules, and regulations, and to such approvals by government agencies as may be required. The Company shall be under no obligation
to register pursuant to the Securities Act of 1933, as amended, any of the shares of Stock paid pursuant to the Plan. If the shares paid pursuant to the Plan may in certain circumstances be exempt
from registration pursuant to the Securities Act of 1933, as amended, the Company may restrict the transfer of such shares in such manner as it deems advisable to ensure the availability of any such
exemption. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.13</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>GOVERNING LAW.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Plan and all Award Agreements shall be construed in accordance
with and governed by the laws of the State of Maryland. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.14</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>SECTION&nbsp;409A.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If any payments under this Plan are subject to the provisions
of Section&nbsp;409A of the Code, it is intended that the terms of this Plan will comply fully with and meet all the requirements of Section&nbsp;409A of the Code. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>A-13</FONT></P>

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 </FONT></P>

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<P ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><A
NAME="du77301_appendix_b"> </A>
<A NAME="toc_du77301_1"> </A>
<BR></FONT><FONT SIZE=2><B>Appendix&nbsp;B    <BR>    </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>PROPOSED AMENDMENT TO CERTIFICATE OF INCORPORATION  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article&nbsp;V of the charter of the Corporation is hereby amended to read as follows: </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"The
Corporation shall have authority to issue One Hundred Thirty-Five Million (135,000,000) shares of capital stock of which One Hundred Twenty-Five Million
(125,000,000) shares shall be designated "Common Stock," par value one cent ($0.01) per share, and Ten Million 10,000,000 shares shall be designated "Preferred Stock," par value one cent ($0.01) per
share, amounting in aggregate par value to One Million Three Hundred Fifty Thousand Dollars ($1,350,000). </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;Common
Stock </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;Each
share of Common Stock shall entitle the owner thereof to vote at the rate of one (1)&nbsp;vote for each share held. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;The
Corporation shall not issue fractional shares of its Common Stock. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;All
persons who acquire shares of Common Stock in the Corporation shall acquire such shares subject to the provisions of these Articles of Incorporation and the Bylaws
of the Corporation. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;&nbsp;Simultaneously
with the effective date of the merger (December&nbsp;31, 1996, the "Effective Date"), of Monterey Homes Construction II,&nbsp;Inc., an Arizona
corporation and Monterey Homes Arizona II,&nbsp;Inc., an Arizona corporation with and into the corporation (the "Merger") and immediately after the Merger, each share of Common Stock, par value
$0.01 per share, issued and outstanding following the Merger (the "Old Common Stock") shall automatically and without any action on the part of the holder thereof be reclassified and changed into
one-third (<SUP>1</SUP>/<SMALL>3</SMALL>) of a share of the Corporation's Common Stock, par value equal to the par value of the Old Common Stock (the "New Common Stock"), subject to the treatment of
fractional share interests as described below (the "Stock Change"). Each holder of a certificate or certificates which immediately following the Merger represented outstanding shares of Old Common
Stock (the "Old Certificates," whether one or more) shall be entitled to receive upon surrender of such Old Certificates to the Corporation's Transfer Agent for cancellation, a certificate or
certificates (the "New Certificates," whether one or more) representing the number of whole shares of the New Common Stock into which and for which the shares of the Old Common Stock formerly
represented by such Old Certificates so surrendered, are reclassified and changed under the terms hereof. From and after the Effective Date and immediately following the Merger, Old Certificates shall
represent only the right to the number of shares of New Common Stock into which the Old Common Stock shall have been reclassified and changed and the right to receive New Certificates therefor
pursuant to the provisions hereof. No certificates or scrip representing fractional share interests in New Common Stock will be issued, and no such fractional share interest will entitle the holder
thereof to vote, or to any rights of a shareholder of the Corporation. All fractional shares for one share or more shall be increased to the next higher whole number of shares and all fractional
shares of less than one-half (<SUP>1</SUP>/<SMALL>2</SMALL>) share shall be decreased to the next lower whole number of shares, respectively. If more than one Old Certificate shall be surrendered at
one time for the account of the same stockholder, the number of full shares of New Common Stock for which New Certificates shall be issued shall be computed on the basis of the aggregate number of
shares represented by the Old Certificates so surrendered. In the event that the Corporation's Transfer Agent determines that a holder of Old Certificates has not tendered all his certificates for
exchange, the Transfer Agent shall carry forward any fractional share until all certificates of that holder have been presented for exchange such that rounding </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>B-1</FONT></P>

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<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_du77301_1_2"> </A>
<UL>
<UL>
<BR>

<P style="font-family:times;"><FONT SIZE=2>for
fractional shares to any one person shall not exceed one share. If any New Certificate is to be issued in a name other than that in which the Old Certificates surrendered for exchange are issued,
the Old Certificates so surrendered shall be properly endorsed and otherwise be in proper form for transfer, and the person or persons requesting such exchange shall affix any requisite stock transfer
tax stamps to the Old Certificates surrendered, or provide funds for their purchase, or establish to the satisfaction of the Transfer Agent that such taxes are not payable. From and after the
Effective Date and immediately following the Merger, the amount of capital represented by the shares of the New Common Stock into which and for which the shares of the Old Common Stock are
reclassified and changed under the terms hereof shall be the same as the amount of capital represented by the shares of Old Common Stock so reclassified and changed, until thereafter reduced or
increased in accordance with applicable law. </FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Preferred
Stock.&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors is hereby expressly authorized to provide for, designate and issue out of the authorized but unissued shares of
Preferred Stock, one or more series of Preferred Stock, subject to the terms and conditions set forth herein. Before any shares of any such series are issued, the Board of Directors shall fix, and
hereby is expressly empowered to fix, by resolution or resolutions, the following provisions of the shares of any such series: </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;the
designation of such series, the number of shares to constitute such series and the stated value thereof, if different from the par value thereof; </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;whether
the shares of such series shall have voting rights or powers, in addition to any voting rights required by law, and, if so, the terms of such voting rights or
powers, which may be full or limited; </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;the
dividends, if any, payable on such series, whether any such dividends shall be cumulative, and, if so, from what dates, the conditions and dates upon which such
dividends shall be payable, the preference or relation which such dividends shall bear to the dividends payable on any other series of Preferred Stock or on any other class of stock of the Corporation
or any series of such class; </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;&nbsp;whether
the shares of such series shall be subject to redemption by the Corporation, and, if so, the times, prices and other conditions of such redemption; </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)&nbsp;&nbsp;&nbsp;the
amount or amounts payable upon shares of such series upon, and the rights of the holders of such series in, the voluntary or involuntary liquidation, dissolution or
winding up, or upon any distribution of the assets of the Corporation and the preference or relation which such amount or amounts shall bear to the amount or amounts payable on any other series of
Preferred Stock or on any other class of stock of the Corporation or any series of such class; </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)&nbsp;&nbsp;&nbsp;whether
the shares of such series shall be subject to the operation of a retirement or sinking fund and, if so, the extent to and manner in which any such retirement or
sinking fund shall be applied to the purchase or redemption of the shares of such series for retirement or other corporate purposes and the terms and provisions relative to the operation thereof; </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7)&nbsp;&nbsp;&nbsp;whether
the shares of such series shall be convertible into, or exchangeable for, shares of Preferred Stock of any other series or any other class of stock of the
Corporation or any series of such class or any other securities and, if so, the price or prices or the rate or rates of conversion or exchange and the method, if any, of adjusting the same, and any
other terms and conditions of such conversion or exchange; </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8)&nbsp;&nbsp;&nbsp;the
limitations and restrictions, if any, to be effective while any shares of such series are outstanding upon the payment of dividends or the making of other
distributions on, and </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>B-2</FONT></P>

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<UL>
<UL>
<BR>

<P style="font-family:times;"><FONT SIZE=2>upon
the purchase, redemption or other acquisition by the Corporation of, the Common Stock or shares of Preferred Stock of any other series or any other class of stock of the Corporation or any series
of such class; </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9)&nbsp;&nbsp;&nbsp;the
conditions or restrictions, if any, to be effective while any shares of such series are outstanding upon the creation of indebtedness of the Corporation or upon the
issuance of any additional stock, including additional shares of such series or of any other series of the Preferred Stock or of any class of stock of the Corporation or any series of such class; and </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10)&nbsp;any
other powers, designations, preferences and relative, participating, optional or other special rights, and any qualifications, limitations or restrictions thereof. </FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred
Stock redeemed or otherwise acquired by the Corporation shall assume the status of authorized but unissued Preferred Stock and shall be unclassified as to series and may
thereafter, subject to the provisions of this Article&nbsp;V, as it may be amended, be reissued in the same manner as other authorized but unissued Preferred Stock." </FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
Article&nbsp;VII(a) of the charter of the Corporation, the phrase "Common Stock" is replaced with the phrase "Common Stock or Preferred Stock" in each place where it appears. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>B-3</FONT></P>

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<P style='font-family:times;page-break-before:always'></p>
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 </FONT> <FONT SIZE=2><B>MERITAGE HOMES CORPORATION  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B> ANNUAL MEETING OF STOCKHOLDERS - May 15, 2008  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned hereby appoints each of Steven J. Hilton, C. Timothy White or Larry W. Seay as proxies with full power of substitution acting unanimously and
voting or if only one is present and voting then that one, to vote the shares of stock of Meritage Homes Corporation, which the undersigned is entitled to vote, at the Annual Meeting of Stockholders
to be held at the The Scottsdale Marriott at McDowell Mountains, 16770 North Perimeter Drive, Scottsdale, Arizona 85260 on Wednesday, May&nbsp;15, 2008 at 10:00&nbsp;a.m. local time, and at any
adjournment or adjournments thereof, with all the powers the undersigned would possess if present. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IF
YOU RETURN YOUR PROPERLY EXECUTED PROXY, WE WILL VOTE YOUR SHARES AS YOU DIRECT. IF YOU DO NOT SPECIFY ON YOUR PROXY CARD HOW YOU WANT TO VOTE YOUR SHARES, WE WILL VOTE THEM FOR THE
ELECTION OF THE DIRECTOR NOMINEES LISTED IN PROPOSAL 1, FOR THE RATIFICATION OF THE SELECTION OF THE COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM IN PROPOSAL 2 AND FOR PROPOSALS 3, 4 AND 5
AND IN THE DISCRETION OF THE PROXIES ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS THEREOF. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>Please mark, sign and date the reverse side and<BR>
return the proxy card promptly using the enclosed envelope.<BR>
(Continued on reverse side)  </B></FONT></P>

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</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>Address Change/Comments (Mark the corresponding box on the reverse side)</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%" ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%" ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TD>
</TR>
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<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>Please Mark Here for Address Change or Comments</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
</TR>
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<TD WIDTH="73%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>SEE REVERSE SIDE</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
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<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>1.</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="77%" style="font-family:times;"><FONT SIZE=1>ELECTION OF DIRECTORS:<BR>
VOTE FOR nominees listed below</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>FOR</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>WITHHELD<BR>
FOR ALL</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="77%" style="font-family:times;"><FONT SIZE=1>01&nbsp;&nbsp;&nbsp;&nbsp;Steven J. Hilton<BR>
02&nbsp;&nbsp;&nbsp;&nbsp;Raymond Oppel<BR>
03&nbsp;&nbsp;&nbsp;&nbsp;Richard T. Burke, Sr.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=7 style="font-family:times;"><FONT SIZE=1><BR>
WITHHELD FOR: (Write that nominee's name in the space provided below.)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=7 style="font-family:times;"><BR><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=7 style="font-family:times;"><BR><HR NOSHADE></TD>
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<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>2.</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=1>To ratify the selection of the Company's independent registered public accounting firm.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>FOR<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>AGAINST<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>ABSTAIN<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>3.</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=1>To approve the amendment to the 2006 Stock Incentive Plan to increase the number of shares authorized for issuance.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>FOR<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>AGAINST<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>ABSTAIN<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>4.</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=1>To approve the amendment to the 2006 Stock Incentive Plan to increase the limit on the number of shares that may be granted to a participant during a calendar year.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>FOR<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>AGAINST<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>ABSTAIN<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>5.</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=1>To approve authorization of Preferred Stock.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>FOR<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>AGAINST<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>ABSTAIN<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=1>THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED AS YOU SPECIFY ABOVE. IF NO SPECIFIC VOTING DIRECTIONS ARE GIVEN BY YOU, THIS PROXY WILL BE VOTED FOR THE DIRECTOR NOMINEES LISTED IN PROPOSAL 1 AND FOR THE RATIFICATION OF
THE SELECTION OF THE COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM IN PROPOSAL 2 AND FOR PROPOSALS 3, 4 AND 5 AND WITH RESPECT TO SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING, IN ACCORDANCE WITH THE DISCRETION OF THE
APPOINTED PROXY. PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<TR VALIGN="TOP">
<TD WIDTH="100%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1>Signature</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="24%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1>Signature</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="24%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>Date</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="24%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="24%" ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="24%" ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="24%" ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TD>
</TR>
</TABLE>
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<P style="font-family:times;"><FONT SIZE=1>Please sign exactly as name(s) appear herein. If acting as an executor, administrator, trustee, custodian, guardian,
etc., you should so indicate in signing. If the stockholder is a corporation, please sign the full corporate name, by a duly authorized officer. If shares are held jointly, each stockholder named
should sign. </FONT></P>

<HR NOSHADE>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>/*\ FOLD AND DETACH HERE /*\  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B> WE ENCOURAGE YOU TO TAKE ADVANTAGE OF INTERNET OR TELEPHONE VOTING,<BR>
BOTH ARE AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK.  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B> Internet and telephone voting is available through 11:59 PM Eastern Time<BR>
the day prior to annual meeting day. Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy
card.</B></FONT></P>

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<TR VALIGN="TOP">
<TD WIDTH="50%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>INTERNET<BR>
http://www.proxyvoting.com/mth</B></FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="39%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>TELEPHONE<BR>
1-866-540-5760</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="50%" style="font-family:times;"><FONT SIZE=1>Use the Internet to vote your proxy. Have your proxy card in hand when you access the web site.</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>OR</B></FONT></TD>
<TD WIDTH="3%" VALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="39%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call.</FONT></TD>
</TR>
</TABLE></DIV>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>If
you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy card.<BR>
To vote by mail, mark, sign and date your proxy card and return it in the enclosed postage-paid envelope. </FONT></P>

<UL>
<UL>
<UL>

<P style="font-family:times;"><FONT SIZE=1>Choose </FONT><FONT SIZE=1><B>MLink<SUP>SM</SUP></B></FONT><FONT SIZE=1> for fast, easy and secure 24/7 online access to your future proxy materials,
investment plan statements, tax documents and more. Simply log on to </FONT><FONT SIZE=1><B>Investor ServiceDirect&reg;</B></FONT><FONT SIZE=1> at www.bnymellon.com/shareowner/isd where
step-by-step instructions will prompt you through enrollment. </FONT></P>

</UL>
</UL>
</UL>
<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=77,EFW="2184391",CP="MERITAGE HOMES CORP.",DN="1",CHK=777155,FOLIO='blank',FILE='DISK134:[08ZAH2.08ZAH77302]MA77302A.;23',USER='RKING',CD='31-MAR-2008;17:18' -->
<UL>
<UL>
<UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>MERITAGE HOMES CORPORATION  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B> 401 (k) Retirement Plan<BR>
TO: Wells Fargo Retirement Plan Services  </B></FONT></P>

</UL>
</UL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You are hereby directed to vote, with respect to the proposals listed on the other side of this Direction Card, the number of shares of MERITAGE Homes common
stock held in my account in the MERITAGE Homes 401 (k) Retirement Plan at the Annual Meeting of Stockholders to be held on May 15, 2008 and any postponements or adjournments thereof. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>Please mark, sign and date the reverse side and<BR>
return the proxy card promptly using the enclosed envelope.<BR>
(Continued on reverse side)  </B></FONT></P>

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<TR VALIGN="TOP">
<TD WIDTH="100%" ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="100%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>Address Change/Comments (Mark the corresponding box on the reverse side)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="100%" ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="100%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="100%" ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TD>
</TR>
</TABLE></DIV>
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<HR NOSHADE>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>/*\ FOLD AND DETACH HERE /*\  </B></FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=78,EFW="2184391",CP="MERITAGE HOMES CORP.",DN="1",CHK=815032,FOLIO='blank',FILE='DISK134:[08ZAH2.08ZAH77302]MA77302B.;23',USER='RKING',CD='31-MAR-2008;17:18' -->

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<TD WIDTH="73%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>Please Mark Here for Address Change or Comments</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="73%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=1>SEE REVERSE SIDE</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
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<TR VALIGN="TOP">
<TD WIDTH="100%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>1.</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="77%" style="font-family:times;"><FONT SIZE=1>ELECTION OF DIRECTORS:<BR>
VOTE FOR nominees listed below</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>FOR</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>WITHHELD<BR>
FOR ALL</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="77%" style="font-family:times;"><FONT SIZE=1>01&nbsp;&nbsp;&nbsp;&nbsp;Steven J. Hilton<BR>
02&nbsp;&nbsp;&nbsp;&nbsp;Raymond Oppel<BR>
03&nbsp;&nbsp;&nbsp;&nbsp;Richard T. Burke, Sr.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=7 style="font-family:times;"><FONT SIZE=1><BR>
WITHHELD FOR: (Write that nominee's name in the space provided below.)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=7 style="font-family:times;"><BR><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=7 style="font-family:times;"><BR><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=7 style="font-family:times;"><BR><HR NOSHADE></TD>
</TR>
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<TR VALIGN="TOP">
<TD WIDTH="100%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>2.</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=1>To ratify the selection of the Company's independent registered public accounting firm.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>FOR<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>AGAINST<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>ABSTAIN<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>3.</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=1>To approve the amendment to the 2006 Stock Incentive Plan to increase the number of shares authorized for issuance.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>FOR<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>AGAINST<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>ABSTAIN<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>4.</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=1>To approve the amendment to the 2006 Stock Incentive Plan to increase the limit on the number of shares that may be granted to a participant during a calendar year.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>FOR<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>AGAINST<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>ABSTAIN<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>5.</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=1>To approve authorization of Preferred Stock.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>FOR<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>AGAINST<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>ABSTAIN<BR>
<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="68%" style="font-family:times;"><FONT SIZE=1>THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED AS YOU SPECIFY ABOVE. IF NO SPECIFIC VOTING DIRECTIONS ARE GIVEN BY YOU, THIS PROXY WILL BE VOTED FOR THE DIRECTOR NOMINEES LISTED IN PROPOSAL 1 AND FOR THE RATIFICATION OF
THE SELECTION OF THE COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM IN PROPOSAL 2 AND FOR PROPOSALS 3, 4 AND 5 AND WITH RESPECT TO SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING, IN ACCORDANCE WITH THE DISCRETION OF THE
APPOINTED PROXY. PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY.</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<TABLE WIDTH="80%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="100%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1>Signature</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="24%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1>Signature</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="24%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>Date</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="24%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="24%" ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="24%" ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="24%" ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TD>
</TR>
</TABLE>
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<P style="font-family:times;"><FONT SIZE=1>Please sign exactly as name(s) appear herein. If acting as an executor, administrator, trustee, custodian, guardian,
etc., you should so indicate in signing. If the stockholder is a corporation, please sign the full corporate name, by a duly authorized officer. If shares are held jointly, each stockholder named
should sign. </FONT></P>

<HR NOSHADE>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>/*\ FOLD AND DETACH HERE /*\  </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B>The undersigned, as a named fiduciary for voting purposes, hereby directs Wells Fargo Bank, N.A. as Trustee for Meritage Homes Corporation 401(k)
Savings Plan ("the Plan") to vote all shares of common stock of Meritage Homes Corporation allocated to my account as of March 31, 2008.</B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>I understand that I am to mail this confidential voting instruction card to BNY Mellon, acting as tabulation agent, or vote by PHONE OR INTERNET as described on the reverse
side of this card, and that my instructions must be received by BNY Mellon no later than midnight on May&nbsp;12, 2008. If my instructions are not received by that date, or if the voting
instructions are invalid because this form is not properly signed and dated, the shares in my account will be voted in accordance with the terms of the Plan document.</B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>WE ENCOURAGE YOU TO TAKE ADVANTAGE OF INTERNET OR TELEPHONE VOTING,<BR>
BOTH ARE AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK.  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B> Internet and telephone voting is available through 11:59 PM Eastern Time<BR>
the day prior to annual meeting day. Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy
card.</B></FONT></P>

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<DIV ALIGN="CENTER"><TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="50%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>INTERNET<BR>
http://www.proxyvoting.com/mth</B></FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="39%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>TELEPHONE<BR>
1-866-540-5760</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="50%" style="font-family:times;"><FONT SIZE=1>Use the Internet to vote your proxy. Have your proxy card in hand when you access the web site.</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>OR</B></FONT></TD>
<TD WIDTH="3%" VALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="39%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call.</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>If
you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy card.<BR>
To vote by mail, mark, sign and date your proxy card and return it in the enclosed postage-paid envelope. </FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=79,EFW="2184391",CP="MERITAGE HOMES CORP.",DN="1",CHK=437394,FOLIO='blank',FILE='DISK134:[08ZAH2.08ZAH77302]MA77302B.;23',USER='RKING',CD='31-MAR-2008;17:18' -->
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<BR>
<P><br><A NAME="08ZAH77301_1">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_be77301_1">NOTICE OF ANNUAL MEETING OF STOCKHOLDERS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_bf77301_1">PROXY STATEMENT</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_bf77301_2">VOTING SECURITIES OUTSTANDING</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_bf77301_3">VOTING PROXIES</A></FONT><BR>

<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_bg77301_1">TABLE OF CONTENTS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_ca77301_1">SUMMARY</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_de77301_1">ELECTION OF DIRECTORS (PROPOSAL NO. 1)</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_de77301_2">RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PROPOSAL NO. 2)</A></FONT><BR>

<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dg77301_1">AMENDMENTS TO THE 2006 STOCK INCENTIVE PLAN Information Relating to Proposals 3 and 4</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dg77301_2">PROPOSAL TO APPROVE AN AMENDMENT TO THE 2006 STOCK INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK AUTHORIZED FOR ISSUANCE THEREUNDER (PROPOSAL NO. 3)</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dg77301_3">PROPOSAL TO APPROVE AN AMENDMENT TO THE 2006 STOCK INCENTIVE PLAN TO INCREASE THE LIMIT ON THE NUMBER OF SHARES OF COMMON STOCK WITH RESPECT TO ONE OR MORE AWARDS THAT MAY BE GRANTED TO A PARTICIPANT DURING A
CALENDAR YEAR (PROPOSAL NO. 4)</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dg77301_4">PROPOSAL TO APPROVE AUTHORIZATION OF PREFERRED STOCK (PROPOSAL NO. 5)</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_di77301_1">SECURITY OWNERSHIP BY MANAGEMENT AND PRINCIPAL STOCKHOLDERS</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_di77301_2">CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_di77301_3">CONTINUING DIRECTOR INFORMATION</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dk77301_1">COMPENSATION DISCUSSION AND ANALYSIS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dm77301_1">2007 Summary Compensation Table</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dm77301_2">All Other Compensation Table Year Ended December 31, 2007</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dm77301_3">2007 Grant of Plan-Based Awards</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dm77301_4">Outstanding Equity Awards at 2007 Fiscal Year-End</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dm77301_5">2007 Option Exercises and Stock Vested</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dm77301_6">2007 Nonqualified Deferred Compensation</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_do77301_1">DIRECTOR COMPENSATION</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_do77301_2">EXECUTIVE COMPENSATION COMMITTEE REPORT</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dq77301_1">SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dq77301_2">SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dq77301_3">CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dq77301_4">INDEPENDENT AUDITORS</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dq77301_5">REPORT OF THE AUDIT COMMITTEE</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dq77301_6">STOCKHOLDER PROPOSALS</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dq77301_7">FORM 10-K ANNUAL REPORT</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dq77301_8">OTHER MATTERS</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dq77301_9">FORWARD LOOKING STATEMENTS</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_dq77301_10">ELECTRONIC DELIVERY OF FUTURE ANNUAL MEETING MATERIALS</A></FONT><BR>
<!-- TOC_BEGIN -->
<UL>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_ds77301_1">Appendix A</A></FONT><BR>
</UL>
<!-- TOC_BEGIN -->
<UL>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_du77301_1">Appendix B</A></FONT><BR>
</UL>
<!-- SEQ=,FILE='QUICKLINK',USER=BKYNARD,SEQ=,EFW="2184391",CP="MERITAGE HOMES CORP.",DN="1" -->
<!-- TOCEXISTFLAG -->
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
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end
</TEXT>
</DOCUMENT>
</SUBMISSION>
