<SUBMISSION>
<ACCESSION-NUMBER>0000950134-09-000313
<TYPE>DEF 14A
<PUBLIC-DOCUMENT-COUNT>4
<PERIOD>20090216
<FILING-DATE>20090109
<DATE-OF-FILING-DATE-CHANGE>20090109
<EFFECTIVENESS-DATE>20090109
<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>09516978
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>17851 NORTH 85TH STREET
<STREET2>SUITE 300
<CITY>SCOTTSDALE
<STATE>AZ
<ZIP>85255
<PHONE>480-515-8100
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>17851 NORTH 85TH STREET
<STREET2>SUITE 300
<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>p13800dedef14a.htm
<DESCRIPTION>DEF 14A
<TEXT>
<HTML>
<HEAD>
<TITLE>def14a</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>UNITED STATES</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Washington,&#160;D.C. 20549</B>
</DIV>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>SCHEDULE&#160;14A</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="white-space: nowrap">(Rule&#160;14a-101)</FONT></B>
</DIV>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>INFORMATION REQUIRED IN PROXY STATEMENT</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>SCHEDULE&#160;14A INFORMATION</B>
</DIV>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Proxy Statement Pursuant to Section&#160;14(a) of the</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Securities Exchange Act of 1934</B>
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Filed by the
    Registrant&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#254;
    </FONT>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Filed by a Party other than the
    Registrant&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Check the appropriate box:
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-family: Wingdings; font-variant: normal">&#111;</FONT>&#160;&#160;Preliminary
    Proxy Statement
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

    <FONT style="font-family: Wingdings; font-variant: normal">&#111;</FONT>&#160;&#160;Confidential,
    for Use of the Commission Only (as permitted by
    <FONT style="white-space: nowrap">Rule&#160;14a-6(e)(2))</FONT>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

    <FONT style="font-family: Wingdings; font-variant: normal">&#254;</FONT>&#160;&#160;Definitive
    Proxy Statement
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

    <FONT style="font-family: Wingdings; font-variant: normal">&#111;</FONT>&#160;&#160;Definitive
    Additional Materials
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-family: Wingdings; font-variant: normal">&#111;</FONT>&#160;&#160;Soliciting
    Material Pursuant to
    <FONT style="white-space: nowrap">Section&#160;240.14a-12</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    MERITAGE HOMES CORPORATION
</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=0 -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 8pt">(Name of Registrant as Specified In
    Its Charter)
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=0 -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 8pt">(Name of Person(s) Filing Proxy
    Statement, if Other Than the Registrant)
    </FONT>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Payment of Filing Fee (Check the appropriate box):
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    <FONT style="font-family: Wingdings; font-variant: normal">&#254;</FONT>&#160;&#160;
</TD>
    <TD align="left">    No fee required.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    <FONT style="font-family: Wingdings; font-variant: normal">&#111;</FONT>&#160;&#160;
</TD>
    <TD align="left">    Fee computed on table below per Exchange Act
    <FONT style="white-space: nowrap">Rules&#160;14a-6(i)(1)</FONT>
    and 0-11.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="4%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    1)&#160;&#160;
</TD>
    <TD align="left">
    Title of each class of securities to which transaction applies:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 8pt; margin-left: 7%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=0 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="4%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    2)&#160;&#160;
</TD>
    <TD align="left">
    Aggregate number of securities to which transaction applies:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 8pt; margin-left: 7%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=0 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="4%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    3)&#160;&#160;
</TD>
    <TD align="left">
    Per unit price or other underlying value of transaction computed
    pursuant to Exchange Act
    <FONT style="white-space: nowrap">Rule&#160;0-11</FONT>
    (set forth the amount on which the filing fee is calculated and
    state how it was determined):
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 8pt; margin-left: 7%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=0 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="4%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    4)&#160;&#160;
</TD>
    <TD align="left">
    Proposed maximum aggregate value of transaction:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 8pt; margin-left: 7%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=0 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="4%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    5)&#160;&#160;
</TD>
    <TD align="left">
    Total fee paid:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 8pt; margin-left: 7%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=0 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    <FONT style="font-family: Wingdings; font-variant: normal">&#111;</FONT>&#160;&#160;</TD>
    <TD align="left">
    Fee paid previously with preliminary materials:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 8pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=0 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    <FONT style="font-family: Wingdings; font-variant: normal">&#111;</FONT>&#160;&#160;</TD>
    <TD align="left">
    Check box if any part of the fee is offset as provided by
    Exchange Act
    <FONT style="white-space: nowrap">Rule&#160;0-11(a)(2)</FONT>
    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.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="4%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    1)&#160;&#160;
</TD>
    <TD align="left">
    Amount previously paid:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 8pt; margin-left: 7%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=0 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="4%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    2)&#160;&#160;
</TD>
    <TD align="left">
    Form, Schedule or Registration Statement No.:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 8pt; margin-left: 7%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=0 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="4%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    3)&#160;&#160;
</TD>
    <TD align="left">
    Filing Party:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 8pt; margin-left: 7%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=0 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="4%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    4)&#160;&#160;
</TD>
    <TD align="left">
    Date Filed:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 8pt; margin-left: 7%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=0 -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="p13800dep1380000.gif" alt="(MERITAGE HOMES LOGO)">
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Dear Stockholders:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You are cordially invited to join us for a special meeting of
    our stockholders, which will be held on Monday,
    February&#160;16, 2009, at 10:00&#160;a.m. local time at the
    Company&#146;s headquarters, 17851 North 85th&#160;Street,
    Suite&#160;100, Scottsdale, Arizona 85255. Holders of record of
    our common stock as of January&#160;5, 2009, are entitled to
    notice of and to vote at this special meeting.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Notice of Special Meeting of Stockholders and the proxy
    statement that follow describe the business to be conducted at
    the meeting.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We look forward to seeing you at the special meeting.
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Sincerely,
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="p13800dep1380001.gif" alt="">
</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Steven J. Hilton
</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Chairman and Chief Executive Officer
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">17851 North
    85<SUP style="font-size: 85%; vertical-align: top">th</SUP>

    Street&#160;&#149;&#160; Suite&#160;300&#160;&#149;&#160;
    Scottsdale, Arizona&#160;&#149;&#160; 85255&#160;&#149;&#160;
    Phone
    <FONT style="white-space: nowrap">480-515-8100</FONT>
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Listed on the New York Stock Exchange&#160;&#151; MTH</I>
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">NOTICE OF SPECIAL MEETING OF STOCKHOLDERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">PROXY STATEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">SUMMARY OF VOTING PROPOSALS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">VOTING SECURITIES OUTSTANDING</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">VOTING PROXIES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#005">AMENDMENT TO ARTICLES OF INCORPORATION TO PRESERVE VALUE OF NET OPERATING LOSSES (PROPOSAL NO. 1)</A></TD></TR>
<TR><TD colspan="9"><A HREF="#006">VOTING RIGHTS AND SECURITY OWNERSHIP BY MANAGEMENT AND  PRINCIPAL STOCKHOLDERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#007">OTHER MATTERS AT THE SPECIAL MEETING</A></TD></TR>
<TR><TD colspan="9"><A HREF="#008">STOCKHOLDER PROPOSALS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009">FORWARD LOOKING STATEMENTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#010">ELECTRONIC DELIVERY OF FUTURE MEETING MATERIALS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#011">Appendix A</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 14pt">Meritage Homes
    Corporation</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>17851 North
    85<SUP style="font-size: 85%; vertical-align: top">th</SUP>

    Street, Suite&#160;300</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Scottsdale, Arizona 85255</B>
</DIV>

<DIV style="margin-top: 14pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 18%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=84 -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<!-- link1 "NOTICE OF SPECIAL MEETING OF STOCKHOLDERS" -->
<DIV align="left"><A NAME="000"></A></DIV>
<B><FONT style="font-size: 12pt">
    NOTICE OF SPECIAL MEETING OF STOCKHOLDERS</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Date: Monday, February&#160;16, 2009</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Time: 10:00&#160;a.m. local time</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To Our Stockholders:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You are invited to attend this Special Meeting of the
    Stockholders of Meritage Homes Corporation for the following
    purposes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.&#160;Approve an amendment to the Company&#146;s Articles of
    Incorporation to restrict certain transfers of the
    Company&#146;s common stock in order to preserve the tax
    treatment of the Company&#146;s net operating losses and
    built-in losses,&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    2.&#160;To conduct any other business that may properly come
    before the meeting or any adjournment or postponement thereof.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These items are more fully described in the accompanying proxy.
    Only stockholders of record at the close of business on
    January&#160;5, 2009 are entitled to notice of, and to vote at,
    the special meeting or any adjournment or postponement thereof.
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    By Order of the Board of Directors,
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="p13800dep1380002.gif" alt="">
</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    C. Timothy White, Secretary
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Scottsdale, Arizona
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
     January&#160;15, 2009
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">


</DIV>
<DIV style="width: 100%; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>YOUR VOTE IS IMPORTANT.</B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>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>
</DIV>
</DIV><!-- End box 1 -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 14pt">MERITAGE HOMES
    CORPORATION</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>17851 NORTH
    85<SUP style="font-size: 85%; vertical-align: top">TH</SUP>

    STREET</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>SUITE&#160;300</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>SCOTTSDALE, ARIZONA 85255</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>www.meritagehomes.com</I></B>
</DIV>

<DIV style="margin-top: 14pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 18%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=84 -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<!-- link1 "PROXY STATEMENT" -->
<DIV align="left"><A NAME="001"></A></DIV>
<B><FONT style="font-size: 12pt">
    PROXY STATEMENT</FONT></B>
</DIV>

<DIV style="margin-top: 14pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 18%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=84 -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>



<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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 a Special Meeting of
    Stockholders on February&#160;16, 2009. The meeting will be held
    at 10:00&#160;a.m. local time at the Company&#146;s
    headquarters, 17851 North
    85<SUP style="font-size: 85%; vertical-align: top">th</SUP>&#160;Street,

    Suite&#160;100, Scottsdale, Arizona 85255. The proxy materials
    relating to the special meeting were mailed on or about
    January&#160;15, 2009 to stockholders of record at the close of
    business on January&#160;5, 2009 (the &#147;record date&#148;).
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If you submit a proxy, you are entitled to revoke your proxy at
    any time before it is exercised by attending the special 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&#146;s address located at
    the top of this page. Whether or not you plan to be present at
    the special 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 or mail.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>The Meritage Board of Directors is soliciting proxies.</B> 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, and have engaged
    Mellon Investor Services LLC (operating as BNY&#160;Mellon
    Shareowner Services) as proxy solicitor to assist us, at a cost
    of approximately $10,000.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY
    MATERIALS FOR THIS MEETING OF STOCKHOLDERS. Information about
    our company and communities is provided on our Internet website
    at <I>www.meritagehomes.com</I>. Our periodic and current
    reports and proxy materials filed or furnished pursuant to the
    Securities Exchange Act of 1934, including this proxy statement
    and related materials, are made available, free of charge, on
    our website as they are electronically filed with or furnished
    to the Securities and Exchange Commission. The non-proxy
    information contained on our website is not considered part of
    this proxy statement.</B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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.
</DIV>


<!-- link1 "SUMMARY OF VOTING PROPOSALS" -->
<DIV align="left"><A NAME="002"></A></DIV>


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SUMMARY
    OF VOTING PROPOSALS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are asking you to approve an amendment to our charter (the
    &#147;NOL Protective Amendment&#148;) that would restrict
    certain transfers of the Company&#146;s common stock in order to
    preserve the tax treatment of the Company&#146;s net operating
    losses and built-in losses (collectively, our NOLs.)
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The purpose of this amendment is to assist us in protecting
    long-term value to the Company of its accumulated NOLs, by
    limiting direct or indirect transfers of our common stock that
    would affect the percentage of stock that is treated as being
    owned by 4.9-percent stockholders. Changes in ownership of our
    5.0-percent stockholders and the creation of new 5.0-percent
    stockholders can result in limitations on our ability to use
    NOLs to reduce future income tax liability. The Board of
    Directors believes that the provisions of the NOL Protective
    Amendment would be an important tool in avoiding adverse
    consequences from applicable tax limitations.
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>The Board of Directors has approved this amendment and
    recommends a vote &#147;for&#148; this proposal. </B>The
    affirmative vote of holders of record of not less than a
    majority of the shares of common stock outstanding 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. So, please vote.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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, the proxy
    holders named in the proxy will vote in what they believe to be
    the best interests of the Company.
</DIV>


<!-- link1 "VOTING SECURITIES OUTSTANDING" -->
<DIV align="left"><A NAME="003"></A></DIV>


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">VOTING
    SECURITIES OUTSTANDING</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On the record date, there were 30,697,856&#160;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 special
    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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Stockholders representing a majority of the shares entitled to
    vote at this special meeting must be present, in person or by
    proxy, to constitute a quorum. Abstentions and broker non-votes
    are counted as present and entitled to vote for purposes of
    determining whether a quorum exits.
</DIV>


<!-- link1 "VOTING PROXIES" -->
<DIV align="left"><A NAME="004"></A></DIV>


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">VOTING
    PROXIES</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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 <B>FOR </B>the NOL
    Protective Amendment and, with respect to any other matter that
    may properly be brought before the special meeting, at the
    discretion of the proxy holders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If your shares are held in a brokerage account or by another
    nominee, you are considered the &#147;beneficial owner&#148; of
    shares held in &#147;street name&#148;, and these proxy
    materials are being forwarded to you by your broker or nominee
    (the &#147;record holder&#148;) 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 not be
    entitled to vote your shares in its discretion on the NOL
    Protective Amendment, and your shares will be counted as a
    &#147;broker non-vote&#148; on this proposal.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You are also invited to attend the special meeting as the
    beneficial owner of shares. Please note, however, that you may
    not vote your shares in person at the meeting unless you obtain
    a &#147;legal proxy&#148; from the record holder who holds your
    shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Rules of the New York Stock Exchange determine whether proposals
    presented at stockholder meetings are &#147;routine&#148; or
    &#147;non-routine.&#148; 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 &#147;broker non-vote&#148; 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.
</DIV>

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    <BR>
    2
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->


<!-- link1 "AMENDMENT TO ARTICLES OF INCORPORATION TO PRESERVE VALUE OF NET OPERATING LOSSES (PROPOSAL NO. 1)" -->
<DIV align="left"><A NAME="005"></A></DIV>


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">AMENDMENT
    TO ARTICLES&#160;OF INCORPORATION TO PRESERVE<BR>
    VALUE OF NET OPERATING LOSSES<BR>
    (PROPOSAL&#160;NO.&#160;1)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On December&#160;19, 2008, the Board of Directors declared
    advisable and approved, subject to the approval of the
    stockholders, an amendment to the Company&#146;s Articles of
    Incorporation to impose certain restrictions on the transfer of
    our common stock which could otherwise adversely affect our
    ability to use the Company&#146;s NOLs for income tax purposes.
    The proposed amendment to the Company&#146;s Articles of
    Incorporation is attached to this proxy statement as
    <I>Appendix&#160;A </I>(the &#147;NOL Protective Amendment).
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Background
    and Reasons for the Proposal</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of September&#160;30, 2008, we estimate that the Company had
    approximately $137&#160;million (before valuation allowances) of
    deferred tax assets generated by approximately $360&#160;million
    in NOLs. These NOLs do not fully expire until 2028. To the
    extent we have future taxable income, and until the NOLs expire,
    they can be used to offset any future ordinary tax on our
    income. Because the amount and timing of our future taxable
    income, if any, cannot be accurately predicted, we cannot
    estimate the exact amount of NOLs that can ultimately be used to
    reduce the Company&#146;s income tax liability. However, we
    believe the NOLs are a valuable asset and that it is in the
    Company&#146;s best interests to attempt to prevent the
    imposition of limitations on their use by adopting the proposed
    NOL Protective Amendment.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Limitations on our ability to use our NOLs would arise if we
    undergo an &#147;ownership change&#148; Under Section 382
    (&#147;Section 382&#148;) of the Internal Revenue Code (the
    &#147;Code&#148;). Calculating whether an &#147;ownership
    change&#148; has occurred is subject to inherent uncertainty.
    This uncertainty results from the complexity and ambiguity of
    the Section&#160;382 provisions, as well as limitations on the
    knowledge that any publicly traded company can have about the
    ownership of and transactions in its securities. Based upon the
    information available to us, along with our evaluation of
    various scenarios, we believe that we have not experienced an
    &#147;ownership change&#148;. However, if no action is taken it
    is possible that we could undergo a Section&#160;382
    &#147;ownership change.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have adopted a Bylaw provision that purports to restrict
    issuances or transfers of our stock that could impair our tax
    assets. There is no assurance that the Bylaw provision is
    enforceable against stock already outstanding, or at all, under
    applicable law. On the other hand, the Company believes that the
    NOL Protective Amendment, if adopted, would be enforceable.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because of the importance of this matter, if the NOL Protective
    Amendment is not adopted by the stockholders, the Board of
    Directors intends to consider implementation of a shareholder
    rights plan (or &#147;poison pill&#148;) for the purpose of
    facilitating preservation of our NOLs. If implemented, the
    rights plan would be put to a vote of stockholders at our next
    annual meeting.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Section&#160;382
    Ownership Calculations</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The benefit of our NOLs would be significantly reduced if we
    were to experience an &#147;ownership change&#148; as defined in
    Section&#160;382. In order to determine whether an
    &#147;ownership change&#148; has occurred, the Company must
    compare the percentage of stock owned by each 5.0-percent
    stockholder immediately after the close of the testing date to
    the lowest percentage of stock owned by such 5.0-percent
    stockholder at any time during the testing period (which is
    generally a three year rolling period). The amount of the
    increase in the percentage of Company stock owned by each
    5.0-percent stockholder whose stock ownership percentage has
    increased is added together with increases in stock ownership of
    other 5.0-percent stockholders, and an ownership change occurs
    if the aggregate increase in ownership by all such 5.0-percent
    stockholders exceeds 50%.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For example, if a single investor acquired 50.1% of our stock in
    a three-year period, an &#147;ownership change&#148; would
    occur. Similarly, if ten persons, none of whom owned our stock,
    each acquired slightly over 5.0% of our stock within a
    three-year period (so that such persons owned, in the aggregate,
    more than 50%), an &#147;ownership change&#148; would occur.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the event of an &#147;ownership change&#148;, we would only
    be allowed to use a limited amount of NOLs to offset our taxable
    income subsequent to the &#147;ownership change.&#148; The
    annual limit pursuant to Section&#160;382 (the &#147;382
    Limitation&#148;) is obtained by multiplying (i)&#160;the
    aggregate value of our outstanding equity immediately prior to
    the &#147;ownership change&#148; (reduced by certain capital
    contributions made during the immediately preceding two years
</DIV>

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    <BR>
    3
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    and certain other items) by (ii)&#160;the federal long-term
    tax-exempt interest rate in effect for the month of the
    &#147;ownership change.&#148; In calculating the 382 Limitation,
    numerous special rules and limitations apply, including
    provisions dealing with &#147;built-in gains and losses.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the Company were to have taxable income in excess of the 382
    Limitation following a Section&#160;382 &#147;ownership
    change,&#148; it would not be able to offset tax on the excess
    income with the NOLs. Although any loss carryforwards not used
    as a result of any Section&#160;382 Limitation would remain
    available to offset income in future years (again, subject to
    the Section&#160;382 Limitation) until the NOLs expire, any
    &#147;ownership change&#148; could significantly defer the
    utilization of the loss carryforwards, accelerate payment of
    federal income tax and could cause some of the NOLs to expire
    unused. Because the aggregate value of our outstanding stock and
    the federal long-term tax-exempt interest rate fluctuate, it is
    impossible to predict with any accuracy the Section&#160;382
    Limitation upon the amount of our taxable income that could be
    offset by such loss carryforwards and credits were an
    &#147;ownership change&#148; to occur in the future. However,
    such limitation could be material.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In determining whether an &#147;ownership change&#148; has
    occurred, the rules of Section&#160;382 are very complex, and
    are beyond the scope of this summary discussion. Some of the
    factors that must be considered in making a Section&#160;382
    &#147;ownership change&#148; calculation include the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    All holders who each own less than 5.0% of a company&#146;s
    common stock are generally (but not always) treated as a single
    5.0-percent stockholder. Transactions in the public markets
    among stockholders who are not 5.0-percent stockholders are
    generally (but not always) treated as within this single public
    group
    <FONT style="white-space: nowrap">5.0-percent</FONT>
    stockholders.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    There are several rules regarding the aggregation and
    segregation of stockholders who otherwise do not qualify as
    5.0-percent stockholders. Ownership of stock is generally
    attributed to its ultimate beneficial owner without regard to
    ownership by nominees, trusts, corporations, partnerships or
    other entities.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Acquisitions by a person which cause that person to become a
    5.0-percent stockholder generally result in a five percentage
    (or more) point change in ownership, regardless of the size of
    the final purchase that caused the threshold to be exceeded.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Certain constructive ownership rules, which generally attribute
    ownership of stock owned by estates, trusts, corporations,
    partnerships or other entities to the ultimate indirect
    individual owner thereof, or to related individuals, are applied
    in determining the level of stock ownership of a particular
    stockholder. Special rules can result in the treatment of
    options (including warrants) or other similar interests as
    having been exercised if such treatment would result in an
    ownership change.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The redemption or buyback of shares by an issuer will increase
    the ownership of any 5.0-percent stockholders (including groups
    of stockholders who are not themselves 5.0-percent stockholders)
    and can contribute to an &#147;ownership change.&#148; In
    addition, it is possible that a redemption or buyback of shares
    could cause a holder of less than 5.0% to become a 5.0-percent
    stockholders, resulting in a five percentage (or more) point
    change in ownership.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Description
    of NOL Protective Amendment</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following is a summary of the proposed NOL Protective
    Amendment. This summary is qualified in its entirety by
    reference to the full text of the proposed transfer
    restrictions, which is contained in proposed Article&#160;VIII
    of our Articles of Incorporation and set forth in the
    accompanying <I>Appendix&#160;A. </I><B>Stockholders are urged
    to read in their entirety the transfer restrictions set forth in
    the accompanying <I>Appendix&#160;A.</I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Prohibited Transfers.</I>&#160;&#160;Although the
    Section&#160;382 rules apply to 5.0-percent stockholders as
    described herein, the Board has determined that it would be in
    the best interest of the Company to apply a more conservative
    approach by restricting transactions of stockholders that own or
    would own 4.9% of our stock. The transfer restrictions generally
    will restrict any direct or indirect transfer (such as transfers
    of stock of the Company that result from the transfer of
    interests in other entities that own stock of the Company) if
    the effect would be to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    increase the direct or indirect ownership of our stock by any
    Person (as defined below) from less than 4.9% to 4.9% or more of
    our common stock;&#160;or
</TD>
</TR>

</TABLE>

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    <BR>
    4
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    increase the percentage of our common stock owned directly or
    indirectly by a Person owning or deemed to own 4.9% or more of
    our common stock.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;Person&#148; means any individual, firm, corporation or
    other legal entity, including a group of persons treated as an
    entity pursuant to Treasury Regulation
    &#167;&#160;1.382-3(a)(1)(i); and includes any successor (by
    merger or otherwise) of such entity.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Transfers included under the transfer restrictions include sales
    to Persons whose resulting percentage ownership (direct or
    indirect) of common stock would exceed the 4.9% thresholds
    discussed above, or to Persons whose direct or indirect
    ownership of common stock would by attribution cause another
    Person to exceed such threshold. Complicated rules of
    constructive ownership, aggregation, segregation, combination
    and other common stock ownership rules prescribed by the Code
    (and related regulations) that apply in determining whether a
    Person constitutes a 5.0-percent stockholder under
    Section&#160;382 and whether less than 5.0-percent stockholders
    will be treated as one or more &#147;public groups,&#148; each
    of which is a 5.0-percent&#160;stockholder under
    Section&#160;382, will apply to the determination of 4.9-percent
    stockholders under the article amendment. A transfer from one
    member of the public group to another member of the public group
    does not increase the percentage of our common stock owned
    directly or indirectly by the public group and, therefore, such
    transfers are not restricted. For purposes of determining the
    existence and identity of, and the amount of common stock owned
    by, any stockholder, we will be entitled to rely on the
    existence or absence of filings with the SEC of Schedules 13D
    and 13G (or any similar filings) as of any date, subject to our
    actual knowledge of the ownership of our common stock. The
    transfer restrictions will include the right to require a
    proposed transferee, as a condition to registration of a
    transfer of common stock, to provide all information reasonably
    requested regarding such person&#146;s direct and indirect
    ownership of our common stock.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The transfer restrictions may result in the delay or refusal of
    certain requested transfers of our common stock. As a result of
    these rules, the transfer restrictions could result in
    prohibiting ownership (thus requiring dispositions) of our
    common stock as a result of a change in the relationship between
    two or more persons or entities, or of a transfer of an interest
    in an entity other than us, such as an interest in an entity
    that, directly or indirectly, owns our common stock. The
    transfer restrictions will also apply to proscribe the creation
    or transfer of certain &#147;options&#148; (which are broadly
    defined by Section&#160;382)&#160;in respect of our common stock
    to the extent that, in certain circumstances, creation, transfer
    or exercise of the option would result in a proscribed level of
    ownership.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Consequences of Prohibited Transfers.</I>&#160;&#160;Upon
    adoption of the transfer restrictions, any direct or indirect
    transfer attempted in violation of the restrictions would be
    void as of the date of the purported transfer as to the
    purported transferee (or, in the case of an indirect transfer,
    the ownership of the direct owner of common stock would
    terminate simultaneously with the transfer), and the purported
    transferee (or in the case of any indirect transfer, the direct
    owner) would not be recognized as the owner of the shares owned
    in violation of the restrictions for any purpose, including for
    purposes of voting and receiving dividends or other
    distributions in respect of such common stock, or in the case of
    options, receiving common stock in respect of their exercise. In
    this proxy statement, common stock purportedly acquired in
    violation of the transfer restrictions is referred to as
    &#147;excess stock.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to the purported transfer being void as of the date
    of the purported transfer, upon demand, the purported transferee
    must transfer the excess stock to our agent along with any
    dividends or other distributions paid with respect to such
    excess stock. Our agent is required to sell such excess stock in
    an arms&#146; length transaction (or series of transactions)
    that would not constitute a violation under the transfer
    restrictions. The net proceeds of the sale, together with any
    other distributions with respect to such excess stock received
    by our agent, after deduction of all costs incurred by the
    agent, will be distributed first to the purported transferee in
    an amount, if any, up to the cost (or in the case of gift,
    inheritance or similar transfer, the fair market value of the
    excess stock on the date of the violative transfer) incurred by
    the purported transferee to acquire such excess stock, and the
    balance of the proceeds, if any, will be distributed to a
    charitable beneficiary. If the excess stock is sold by the
    purported transferee, such person will be treated as having sold
    the excess stock on behalf of the agent, and will be required to
    remit all proceeds to our agent (except to the extent we grant
    written permission to the purported transferee to retain an
    amount not to exceed the amount such person otherwise would have
    been entitled to retain had our agent sold such shares),
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To the extent permitted by law, any stockholder who knowingly
    violates the transfer restrictions will be liable for any and
    all damages suffered by us as a result of such violation,
    including damages resulting from a reduction in
</DIV>

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    <BR>
    5
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    or elimination of the ability to utilize the NOLs and any
    professional fees incurred in connection with addressing such
    violation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    With respect to any transfer of common stock which does not
    involve a transfer of &#147;securities&#148; of the Company
    within the meaning of the Corporation Law of the State of
    Maryland but which would cause any
    <FONT style="white-space: nowrap">5.0-percent</FONT>
    stockholder to violate the transfer restrictions, the following
    procedure will apply in lieu of those described above. In such
    case, no such 5.0-percent stockholder shall be required to
    dispose of any interest that is not a security of the Company,
    but such 5.0-percent stockholder
    <FONT style="white-space: nowrap">and/or</FONT> any
    person whose ownership of securities of the Company is
    attributed to such 5.0-percent stockholder will be deemed to
    have disposed of (and will be required to dispose of) sufficient
    securities, simultaneously with the transfer, to cause such
    5.0-percent stockholder not to be in violation of the transfer
    restrictions, and such securities will be treated as excess
    stock to be disposed of through the agent under the provisions
    summarized above, with the maximum amount payable to such
    5.0-percent stockholder or such other person that was the direct
    holder of such excess stock from the proceeds of sale by the
    agent being the fair market value of such excess stock at the
    time of the prohibited transfer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Public Groups; Modification and Waiver of Transfer
    Restrictions.</I>&#160;&#160;The transfer restrictions will
    contain an exception permitting otherwise prohibited transfers
    of our common stock to a public group. These permitted transfers
    include transfers to public groups that would be created by the
    transfer and treated as a 5.0-percent stockholder. This
    exception is designed to facilitate sales by stockholders into
    the market to reduce their holdings. In addition, your Board of
    Directors will have the discretion to approve a transfer of
    common stock that would otherwise violate the transfer
    restrictions if it determines that such transfer is in the
    Company&#146;s best interests. If your Board of Directors
    decides to permit a transfer that would otherwise violate the
    transfer restrictions, that transfer or later transfers may
    result in an &#147;ownership change&#148; that could limit our
    use of the NOLs. In deciding whether to grant a waiver, your
    Board of Directors may seek the advice of counsel and tax
    experts with respect to the preservation of our federal tax
    attributes pursuant to Section&#160;382. In addition, your Board
    of Directors may request relevant information from the acquirer
    <FONT style="white-space: nowrap">and/or</FONT>
    selling party in order to determine compliance with the NOL
    Protective Amendment or the status of our federal income tax
    benefits, including an opinion of counsel selected by your Board
    of Directors (the cost of which will be borne by the transferor
    <FONT style="white-space: nowrap">and/or</FONT> the
    transferee) that the transfer will not result in a
    Section&#160;382 Limitation. In considering a waiver, we expect
    your Board of Directors to consider, such factors, among others,
    as:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the impact of the proposed transfer on our Section&#160;382
    shift in ownership percentage;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the then existing level of our Section&#160;382 shift in
    ownership percentage;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the timing of the expected &#147;roll-off&#146; of our existing
    ownership shift;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the economic impact of any Section&#160;382 Limitation that
    might result, taking into account factors such as our market
    capitalization and cash position;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the impact on possible future issuances or purchases of our
    common stock by us;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any changes or expected changes in applicable tax law.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If your Board of Directors decides to grant a waiver, it may
    impose conditions on the acquirer or selling parry.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, in the event of a change in law, your Board of
    Directors will be authorized to modify the applicable allowable
    percentage ownership interest (currently 4.9%) or modify any of
    the definitions, terms and conditions of the transfer
    restrictions or to eliminate the transfer restrictions, provided
    that your Board of Directors determines, by adopting a written
    resolution, that such action is reasonably necessary or
    advisable to preserve the NOLs or that the continuation of these
    restrictions is no longer reasonably necessary for such purpose,
    as applicable. Stockholders of the Company will be notified of
    any such determination through a filing with the SEC or such
    other method of notice as the Secretary of the Company shall
    deem appropriate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Your Board of Directors may establish, modify, amend or rescind
    by-laws, regulations and procedures for purposes of determining
    whether any transfer of common stock would jeopardize the
    Company&#146;s ability to preserve and use the NOLs.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    6
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Implementation
    and Expiration of the NOL Protective Amendment</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the NOL Protective Amendment is approved by our stockholders
    at the special meeting, we intend to immediately thereafter
    enforce the restrictions to preserve future use of the NOL
    assets. The NOL Protective Amendment would expire on the earlier
    of (i)&#160;your Board of Directors&#146; determination that the
    NOL Protective Amendment is no longer necessary for the
    preservation of the NOLs because of the repeal of
    Section&#160;382 or any successor statute, (ii)&#160;the
    beginning of a taxable year of the Company to which your Board
    of Directors determines that no NOLs may be carried forward or
    (iii)&#160;such date as your Board of Directors determines that
    the NOL Protective Amendment is no longer necessary for the
    preservation of the NOLs. Your Board of Directors is also
    permitted to accelerate or extend the expiration date of the
    transfer restrictions in the event of a change in the law.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Enforceability,
    Trading and Other Considerations</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Board of Directors believes that attempting to safeguard the
    tax benefits as described above is in our best interests.
    Nonetheless, we cannot eliminate the possibility that an
    &#147;ownership change&#148; will occur even if the NOL
    Protective Amendment is approved. You should consider the
    factors discussed below in making your voting decision.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Potential
    Challenge to NOLs</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The amount of the Company&#146;s NOLs has not been audited or
    otherwise validated by the IRS. The IRS could challenge the
    amount of the NOLs, which could result in an increase in our
    liability in the future for income taxes. In addition,
    calculating whether an &#147;ownership change&#148; has occurred
    is subject to uncertainty, both because of the complexity and
    ambiguity of Section&#160;382 and because of limitations on a
    publicly traded company&#146;s knowledge as to the ownership of,
    and transactions in, its securities. Therefore, we cannot assure
    you that the IRS or other taxing authority will not claim that
    we experienced an &#147;ownership change&#148; and attempt to
    reduce the benefit of the Company&#146;s NOLs even if the NOL
    Protective Amendment is in place.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Potential
    Lack of Enforceability</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although the NOL Protective Amendment is intended to reduce the
    likelihood of an &#147;ownership change&#148; that could
    adversely affect us, we cannot assure you that such restrictions
    would prevent all transfers that could result in such an
    ownership change. In particular, absent a court determination,
    there can be no assurance that the acquisition restrictions of
    the NOL Protective Amendment will be enforceable against all of
    our stockholders. They may be subject to challenge on equitable
    or other grounds. In particular, the acquisition restrictions
    may not be enforceable against stockholders who vote against or
    abstain from voting on the NOL Protective Amendment or who do
    not have notice of the restrictions at the time that they
    acquire their shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Potential
    Effects on Liquidity</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The NOL Protective Amendment will restrict a stockholder&#146;s
    ability to acquire, directly or indirectly, additional shares of
    common stock in excess of the specified limitations.
    Furthermore, a stockholder&#146;s ability to dispose of common
    stock may be limited by reducing the class of potential
    acquirers for such common stock. A stockholder&#146;s ownership
    of common stock may become subject to the NOL Protective
    Amendment upon actions taken by persons related to, or
    affiliated with, them. Stockholders are advised to carefully
    monitor their ownership of our stock and consult their own legal
    advisors
    <FONT style="white-space: nowrap">and/or</FONT> us to
    determine whether their ownership of our stock approaches the
    proscribed level.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Potential
    Impact on Value</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the NOL Protective Amendment is approved, your Board of
    Directors intends to impose a legend reflecting the NOL
    Protective Amendment on certificates representing newly issued
    or transferred shares. Because certain
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    7
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    buyers, including persons who may wish to acquire 4.9% or more
    of  our common stock and certain institutional holders who do
    not or choose not to hold common stock with restrictive legends,
    may not purchase our common stock, the NOL Protective Amendment
    could depress the value of our common stock in an amount that
    might more than offset any value conserved as a result of the
    preservation of the NOLs.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Anti-Takeover
    Impact</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The basis for the NOL Protective Amendment is to preserve the
    long-term value to the Company of the accumulated NOLs. However,
    the NOL Protective Amendment, if adopted, could be deemed to
    have an
    <FONT style="white-space: nowrap">&#147;anti-takeover&#148;</FONT>
    effect because, among other things, it will restrict the ability
    of a person, entity or group to accumulate 4.9% or more of
    common stock and the ability of persons, entities or groups now
    owning 4.9% or more of Common Stock from acquiring additional
    shares of common stock, without the approval of your Board of
    Directors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Existing provisions the Company&#146;s 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)&#160;a classified
    board of directors; (ii)&#160;a provision that directors may
    only be removed for cause; (iii)&#160;a limitation on the
    maximum number of directors; (iv)&#160;a limitation on the
    ability of stockholders to call a special meeting of
    stockholders; (v)&#160;a provision that only the directors can
    amend the bylaws; (vi)&#160;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, and (vii)&#160;the ability of the Board of
    Directors to designate and issue shares of the Company&#146;s
    preferred stock. In addition, the Maryland Business Combination
    statute provides, generally, that no 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 becoming a 10-percent
    stockholder 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.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Approval
    Requirements</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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. <B>The Board recommends that you
    vote &#147;FOR&#148; approval of the NOL Protective
    Amendment.</B>
</DIV>


<!-- link1 "VOTING RIGHTS AND SECURITY OWNERSHIP BY MANAGEMENT AND  PRINCIPAL STOCKHOLDERS" -->
<DIV align="left"><A NAME="006"></A></DIV>


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">VOTING
    RIGHTS AND SECURITY OWNERSHIP BY MANAGEMENT AND <BR>
    PRINCIPAL STOCKHOLDERS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Management.</I>&#160;&#160;The following table summarizes, as
    of January&#160;5, 2009, the number and percentage of
    outstanding shares of our common stock beneficially owned by the
    following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    each Meritage director and nominee for director;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    each executive officer named in the summary compensation
    table;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    all Meritage directors and executive officers as a group.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    8
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="27%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="23%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Total<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Right to<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Shares<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Percent of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Shares<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Acquire by<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Beneficially<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Outstanding<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name of Beneficial Owner(1)</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Position with the Company</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Owned(2)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>March&#160;6, 2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Owned</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Steven J. Hilton
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Director, Chairman and CEO
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    1,849,204
</TD>
<TD nowrap align="left" valign="top">
    (3)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    269,674
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    2,118,878
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    6.9
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Robert G. Sarver
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    474,000
</TD>
<TD nowrap align="left" valign="top">
    (4)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    21,750
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    495,750
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    1.6
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Raymond Oppel
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    25,000
</TD>
<TD nowrap align="left" valign="top">
    (5)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    31,750
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    56,750
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    *
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Peter L. Ax
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    14,000
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    21,750
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    35,750
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    *
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Richard T. Burke, Sr.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4,000
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    21,750
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    25,750
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    *
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Gerald W. Haddock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    8,000
</TD>
<TD nowrap align="left" valign="top">
    (6)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    11,750
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    19,750
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    *
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Larry W. Seay
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Executive Vice President, Chief Financial Officer
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    67,076
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    119,111
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    186,187
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    *
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    C. Timothy White
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Executive Vice President, General Counsel and Secretary
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    21,264
</TD>
<TD nowrap align="left" valign="top">
    (6)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    36,000
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    57,264
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    *
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Steven M. Davis
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Chief Operating Officer
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    &#151;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    14,000
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    14,000
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    *
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    All current directors and<BR>
    executive officers as a group (10&#160;persons)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    2,462,544
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    547,535
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3,010,079
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    9.8
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    <I>*&#160;</I></TD>
    <TD></TD>
    <TD valign="bottom">
    Less than 1%.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    The address for our directors and executive officers is
    <FONT style="white-space: nowrap">c/o&#160;Meritage</FONT>
    Homes Corporation, 17851 North
    85<SUP style="font-size: 85%; vertical-align: top">th</SUP>&#160;Street,

    Suite&#160;300, Scottsdale, Arizona 85255.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    The amounts shown include the shares of common stock actually
    owned as of January&#160;5, 2009, and the shares that the person
    or group had the right to acquire within 60&#160;days of that
    date. The number of shares includes shares of common stock owned
    of record by such person&#146;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&#160;days of
    January&#160;5, 2009 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.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Shares are held by family trusts (of which 800,000&#160;shares
    are pledged to a third-party lending institution.)</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    Mr.&#160;Sarver is deemed to indirectly own an additional
    8,000&#160;shares through his family members, and
    1,000,000&#160;shares are owned by Southwest Value Partners
    Fund&#160;XIV, LP, an entity in which Mr.&#160;Sarver indirectly
    shares control over voting, purchase and disposition of these
    shares. Additionally, an entity of which Mr.&#160;Sarver is a
    member owns 1,185,920&#160;shares of our common stock.
    Mr.&#160;Sarver has expressly disclaimed any beneficial
    ownership of these shares.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (5) </TD>
    <TD></TD>
    <TD valign="bottom">
    6,000&#160;shares are owned indirectly by family trusts.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (6) </TD>
    <TD></TD>
    <TD valign="bottom">
    All shares pledged to a third-party lending institution to
    secure a loan.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    9
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Certain Other Beneficial Owners.</I>&#160;&#160;Based on
    filings made under the Securities Exchange Act of 1934, as
    amended (the &#147;Exchange Act&#148;), as of January&#160;5,
    2009, the only other known beneficial owners of more than 5% of
    the Company&#146;s common stock are shown in the following table:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="35%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="42%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="5%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares Beneficially Owned</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name of Other Beneficial Owners</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Address of Beneficial Owner</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Number</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Percent</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    FMR, LLC(1)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    82 Devonshire Street <BR>
    Boston, MA 02109
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3,584,560
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    11.68
</TD>
<TD nowrap align="left" valign="top">
    %
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    LMM, LLC(2)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    100 Light Street <BR>
    Baltimore, MD 21202
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    2,600,000
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    9.91
</TD>
<TD nowrap align="left" valign="top">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Invesco, Ltd.(3)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    1360 Peachtree Street NE<BR>
    Atlanta, GA 30309
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    2,492,536
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    9.50
</TD>
<TD nowrap align="left" valign="top">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    T. Rowe Price Associates, Inc.(4)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    100&#160;E.&#160;Pratt Street<BR>
    Baltimore, MD 21202
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    2,491,400
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    9.40
</TD>
<TD nowrap align="left" valign="top">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Earnest Partners, LLC(5)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    1180 Peachtree Street NE, Suite 2300<BR>
    Atlanta, GA 30309
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    2,099,841
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    8.00
</TD>
<TD nowrap align="left" valign="top">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Barclays Global Investors, NA(6)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    45 Fremont Street<BR>
    San&#160;Francisco, CA 94105
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    1,920,783
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    7.32
</TD>
<TD nowrap align="left" valign="top">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    State Street Bank&#160;&#038; Trust&#160;Co.(7)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    One Lincoln Center<BR>
    Boston, MA 02111
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    1,680,590
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    6.40
</TD>
<TD nowrap align="left" valign="top">
    %
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Based solely on a Schedule&#160;13G/A, filed with the Securities
    and Exchange Commission (&#147;SEC&#148;) November&#160;10,
    2008, FMR LLC and certain affiliated entities have sole voting
    power with respect to 313,967&#160;shares and sole dispositive
    power with respect to 3,584,560 shares.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Based solely on a Schedule&#160;13G/A, filed with the SEC
    February&#160;14, 2008, LLM, LLC has shared voting and
    dispositive power with respect to 2,600,000&#160;shares.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Based solely on a Schedule&#160;13G, filed with the SEC
    February&#160;13, 2008, Invesco, Ltd. and certain affiliated
    entities have shared voting and dispositive power with respect
    to 2,492,536&#160;shares.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    Based solely on a Schedule&#160;13G, filed with the SEC
    February&#160;13, 2008, T. Rowe Price Associates, Inc. has sole
    voting power with respect to 756,300&#160;shares and sole
    dispositive power with respect to 2,491,400&#160;shares.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (5) </TD>
    <TD></TD>
    <TD valign="bottom">
    Based solely on a Schedule&#160;13G/A, filed with the SEC
    January&#160;31, 2008, Earnest Partners, LLC has sole voting
    power with respect to 639,312&#160;shares, shared voting power
    with respect to 511,129&#160;shares and sole dispositive power
    with respect to 2,099,841&#160;shares.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (6) </TD>
    <TD></TD>
    <TD valign="bottom">
    Based solely on a Schedule&#160;13G, filed with the SEC
    February&#160;5, 2008, Barclays Global Investors, NA and certain
    affiliated entities have sole voting power with respect to
    1,589,746&#160;shares and sole dispositive power with respect to
    1,920,783&#160;shares.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (7) </TD>
    <TD></TD>
    <TD valign="bottom">
    Based solely on a Schedule&#160;13G, filed with the SEC
    February&#160;12, 2008, State Street Bank&#160;&#038;
    Trust&#160;Co. has sole voting and dispositive power with
    respect to 1,680,590&#160;shares.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Many of the securities filings made by the purported 5.0-percent
    stockholders listed above reflect the holdings of multiple
    mutual funds, and appear to aggregate these holdings in a manner
    that is not contemplated by tax regulations. Accordingly, for
    purposes of computing an ownership change under
    Section&#160;382, we believe that many of these holders are not
    5.0-percent stockholders and may be disregarded in the
    computation.
</DIV>


<!-- link1 "OTHER MATTERS AT THE SPECIAL MEETING" -->
<DIV align="left"><A NAME="007"></A></DIV>


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">OTHER
    MATTERS AT THE SPECIAL MEETING</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except for the proposal regarding the NOL Protective Amendment,
    the Board of Directors is not aware of any matter to be
    presented at the special meeting. If any other business should
    properly come before the meeting, the proxy holders will vote
    according to their best judgment.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    10
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->


<!-- link1 "STOCKHOLDER PROPOSALS" -->
<DIV align="left"><A NAME="008"></A></DIV>


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">STOCKHOLDER
    PROPOSALS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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 of
    the Company. Nominations must be made in writing to our
    Secretary, received at least 90&#160;days prior to the 2009
    Annual Meeting, and contain sufficient background information
    concerning the nominee&#146;s qualifications. Our Corporate
    Secretary must have received any other stockholder proposals for
    the 2009 Annual Meeting by December&#160;2, 2008 to be
    considered for inclusion in our 2009 proxy statement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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&#146;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 less than 20&#160;days nor
    more than 30&#160;days prior to the meeting (or, with respect to
    a proposal required to be included in our proxy statement
    pursuant to
    <FONT style="white-space: nowrap">Rule&#160;14a-8</FONT>
    of the Securities Exchange Act of 1934, as provided therein and
    in our Bylaws); provided, however, that in the event that less
    than 30&#160;days notice or prior public disclosure of the date
    of the meeting is given or made by the Company, notice by the
    stockholder to be timely must be so received by the Secretary
    not later than the close of business on the 10th&#160;day
    following the earlier of the day on which the Company&#146;s
    notice of the date of the annual meeting was mailed or the day
    on which the Company&#146;s first public disclosure of the date
    of the annual meeting was made.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A nomination or other proposal will be disregarded if it does
    not comply with the above procedures.
</DIV>


<!-- link1 "FORWARD LOOKING STATEMENTS" -->
<DIV align="left"><A NAME="009"></A></DIV>


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">FORWARD
    LOOKING STATEMENTS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This proxy statement contains &#147;forward-looking
    statements&#148; as that term is defined in the Private
    Securities Litigation Reform Act of 1995. These statements are
    based on management&#146;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 regarding the Company&#146;s potential use of NOLs to
    offset profits, and relating to measures that could help protect
    these assets. There can be no assurance that the Company will be
    able to utilize its deferred tax assets, or that measures
    adopted or proposed will prevent changes in ownership that would
    limit use of these assets. The Company 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 the Company&#146;s business,
    particularly those mentioned under the heading &#147;Risk
    Factors&#148; in the Company&#146;s Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K,</FONT>
    and in the periodic reports that the Company files with the SEC
    on
    <FONT style="white-space: nowrap">Form&#160;10-Q</FONT>
    and
    <FONT style="white-space: nowrap">Form&#160;8-K.</FONT>
</DIV>


<!-- link1 "ELECTRONIC DELIVERY OF FUTURE MEETING MATERIALS" -->
<DIV align="left"><A NAME="010"></A></DIV>


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ELECTRONIC
    DELIVERY OF FUTURE MEETING MATERIALS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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
    <FONT style="white-space: nowrap">and/or</FONT>
    special meeting materials, and we hope that our stockholders
    find this service convenient and useful. If you consent and the
    Company elects to deliver future proxy materials
    <FONT style="white-space: nowrap">and/or</FONT>
    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 <I>www.InvestorDelivery.com </I>if you hold
    shares at a brokerage firm or bank participating in the ADP
    program, or by contacting BNY Mellon Shareowner Services if you
    hold shares in your own name.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    By consenting to electronic delivery, you are stating to the
    Company 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
    <FONT style="white-space: nowrap">and/or</FONT>
    special meeting materials. In addition, if you consent to
    electronic
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    11
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    delivery, you will be responsible for your usual Internet
    charges (e.g., online fees) in connection with the electronic
    delivery of the proxy materials and annual report.
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Meritage Homes Corporation
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="p13800dep1380002.gif" alt="">
</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    C. Timothy White
</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Secretary
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
     January&#160;15, 2009
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Note: In compliance with U.S.&#160;Treasury Regulations, any
    tax advice given herein (or in any attachment) is not intended
    or written to be used, and cannot be used, for the purpose of
    (i)&#160;avoiding tax penalties or (ii)&#160;promoting,
    marketing or recommending to another person any transaction or
    matter addressed herein.</B>
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    12
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->


<!-- link1 "Appendix A" -->
<DIV align="left"><A NAME="011"></A></DIV>


<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="right" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Appendix&#160;A</FONT></B>
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PROPOSED
    AMENDMENT TO ARTICLES&#160;OF INCORPORATION</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MERITAGE
    HOMES CORPORATION</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ARTICLES&#160;OF
    AMENDMENT</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Meritage Homes Corporation, a Maryland corporation (the
    &#147;Corporation&#148;), hereby certifies to the State
    Department of Assessments and Taxation of Maryland (the
    &#147;Department&#148;) that:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><U>FIRST</U></I>:&#160;&#160;Article&#160;VIII of the charter
    of the Corporation is hereby amended to read as follows:
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;VIII<BR>
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">RESTRICTIONS
    ON TRANSFER OF SHARES
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;<I><U>Definitions</U>.</I>&#160;&#160;As used in this
    Article&#160;VIII, the following capitalized terms have the
    following meanings when used herein with initial capital letters
    (and any references to any portions of Treasury Regulation
    &#167;&#160;1.382-2T shall include any successor provisions):
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;<I>&#147;4.9-percent&#160;Transaction&#148;</I> means
    any Transfer described in clause&#160;(i) or (ii)&#160;of
    paragraph (b)&#160;of this Article&#160;VIII.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;<I>&#147;4.9-percent&#160;Stockholder&#148;</I> a
    Person who owns 4.9% or more of the Corporation&#146;s
    then-outstanding Common Stock, whether directly or indirectly,
    and including shares such Person would be deemed to
    constructively own or which otherwise would be aggregated with
    shares owned by such Person pursuant to Section&#160;382 of the
    Code, or any successor provision or replacement provision and
    the Treasury Regulations thereunder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;<I>&#147;Agent&#148;</I> has the meaning set forth in
    paragraph (e)&#160;of this Article&#160;VIII.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (4)&#160;<I>&#147;Board of Directors&#148;</I> or
    <I>&#147;Board&#148;</I> means the board of directors of the
    Corporation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (5)&#160;<I>&#147;Common Stock&#148;</I> means any interest in
    Common Stock, par value $0.01 per share, of the Corporation that
    would be treated as &#147;stock&#148; of the Corporation
    pursuant to Treasury Regulation &#167;&#160;1.382-2T(f)(18).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (6)&#160;<I>&#147;Code&#148;</I> means the United States
    Internal Revenue Code of 1986, as amended from time to time, and
    the rulings issued thereunder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (7)&#160;<I>&#147;Corporation Security&#148;</I> or
    <I>&#147;Corporation Securities&#148; </I>means (i)&#160;shares
    of Common Stock, (ii)&#160;shares of preferred stock issued by
    the Corporation (other than preferred stock described in
    Section&#160;1504(a)(4) of the Code), (iii)&#160;warrants,
    rights, or options (including options within the meaning of
    Treasury Regulation
    <FONT style="white-space: nowrap">&#167;&#160;1.382-2T(h)(4)(v))</FONT>
    to purchase Securities of the Corporation, and (iv)&#160;any
    Stock.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (8)&#160;<I>&#147;Effective Date&#148;</I> means the date of
    filing of these Articles of Amendment of the charter of the
    Corporation with the State Department of Assessments and
    Taxation of Maryland.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (9)&#160;<I>&#147;Excess Securities&#148;</I> has the meaning
    given such term in paragraph (d)&#160;of this Article&#160;VIII.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (10)&#160;<I>&#147;Expiration Date&#148;</I> means the earlier
    of (i)&#160;the repeal of Section&#160;382 of the Code or any
    successor statute if the Board of Directors determines that this
    Article&#160;VIII is no longer necessary for the preservation of
    Tax Benefits, (ii)&#160;the beginning of a taxable year of the
    Corporation to which the Board of Directors determines that no
    Tax Benefits may be carried forward or (iii)&#160;such date as
    the Board of Directors shall fix in accordance with paragraph
    (l)&#160;of this Article&#160;VIII.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (11)&#160;<I>&#147;Percentage Stock Ownership&#148;</I> means
    the percentage Stock Ownership interest of any Person or group
    (as the context may require) for purposes of Section&#160;382 of
    the Code as determined in accordance with the Treasury
    Regulation &#167;&#160;1.382-2T(g), (h), (j)&#160;and
    (k)&#160;or any successor provision.
</DIV>

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    <BR>
    A-1
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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (12)&#160;<I>&#147;Person&#148;</I> means any individual, firm,
    corporation or other legal entity, including a group of persons
    treated as an entity pursuant to Treasury Regulation
    &#167;&#160;1.382-3(a)(1)(i); and includes any successor (by
    merger or otherwise) of such entity.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (13)&#160;<I>&#147;Prohibited Distributions&#148;</I> means any
    and all dividends or other distributions paid by the Corporation
    with respect to any Excess Securities received by a Purported
    Transferee.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (14)&#160;<I>&#147;Prohibited Transfer&#148;</I> means any
    Transfer or purported Transfer of Corporation Securities to the
    extent that such Transfer is prohibited
    <FONT style="white-space: nowrap">and/or</FONT> void
    under this Article&#160;VIII.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (15)&#160;<I>&#147;Public Group&#148;</I> has the meaning set
    forth in Treasury Regulation &#167;&#160;1.382-2T(f)(13).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (16)&#160;<I>&#147;Purported Transferee&#148;</I> has the
    meaning set forth in paragraph (d)&#160;of this
    Article&#160;VIII.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (17)&#160;<I>&#147;Securities&#148;</I> and
    <I>&#147;Security&#148;</I> each has the meaning set forth in
    paragraph (g)&#160;of this Article&#160;VIII.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (18)&#160;<I>&#147;Stock&#148;</I> means any interest that would
    be treated as &#147;stock&#148; of the Corporation pursuant to
    Treasury Regulation &#167;&#160;1.382-2T(f)(18).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (19)&#160;<I>&#147;Stock Ownership&#148;</I> means any direct or
    indirect ownership of Stock, including any ownership by virtue
    of application of constructive ownership rules, with such
    direct, indirect, and constructive ownership determined under
    the provisions of Section&#160;382 of the Code and the
    regulations thereunder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (20)&#160;<I>&#147;Tax Benefits&#148;</I> means the net
    operating loss carryforwards, capital loss carryforwards,
    general business credit carryforwards, alternative minimum tax
    credit carryforwards and foreign tax credit carryforwards, as
    well as any loss or deduction attributable to a &#147;net
    unrealized built-in loss&#148; of the Corporation or any direct
    or indirect subsidiary thereof, within the meaning of
    Section&#160;382 of the Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (21)&#160;<I>&#147;Transfer&#148;</I> means, any direct or
    indirect sale, transfer, assignment, conveyance, pledge or other
    disposition or other action taken by a person, other than the
    Corporation, that alters the Percentage Stock Ownership of any
    Person. A Transfer also shall include the creation or grant of
    an option (including an option within the meaning of Treasury
    Regulation &#167;&#160;1.382-2T(h)(4)(v)). For the avoidance of
    doubt, a Transfer shall not include the creation or grant of an
    option by the Corporation, nor shall a Transfer include the
    issuance of Stock by the Corporation.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (22)&#160;<I>&#147;Transferee&#148;</I> means any Person to whom
    Corporation Securities are Transferred.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (23)&#160;<I>&#147;Treasury Regulations&#148;</I> means the
    regulations, including temporary regulations or any successor
    regulations promulgated under the Code, as amended from time to
    time.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;<I><U>Transfer And Ownership
    Restrictions</U>.</I>&#160;&#160;In order to preserve the Tax
    Benefits, from and after the Effective Date of this
    Article&#160;VIII any attempted Transfer of Corporation
    Securities prior to the Expiration Date and any attempted
    Transfer of Corporation Securities pursuant to an agreement
    entered into prior to the Expiration Date, shall be prohibited
    and void <I>ab initio </I>to the extent that, as a result of
    such Transfer (or any series of Transfers of which such Transfer
    is a part), either (i)&#160;any Person or Persons would become a
    4.9-percent&#160;Stockholder or (ii)&#160;the Percentage Stock
    Ownership in the Corporation of any 4.9-percent&#160;Stockholder
    would be increased.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;<I><U>Exceptions</U>.</I>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;Notwithstanding anything to the contrary herein,
    Transfers to a Public Group (including a new Public Group
    created under Treasury Regulation &#167;&#160;1.382-2T(j)(3)(i))
    shall be permitted.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;The restrictions set forth in paragraph (b)&#160;of
    this Article&#160;VIII shall not apply to an attempted Transfer
    that is a 4.9-percent&#160;Transaction if the transferor or the
    Transferee obtains the written approval of the Board of
    Directors or a duly authorized committee thereof. As a condition
    to granting its approval pursuant to this paragraph (c)&#160;of
    Article&#160;VIII, the Board of Directors, may, in its
    discretion, require (at the expense of the transferor
    <FONT style="white-space: nowrap">and/or</FONT>
    transferee) an opinion of counsel selected by the Board of
    Directors that the Transfer shall not result in the application
    of any Section&#160;382 of the Code limitation on the use of the
    Tax Benefits; provided that the Board may grant such approval
    notwithstanding the effect of such approval on the Tax Benefits
    if it determines that the approval is in the best interests of
    the Corporation. The Board of Directors may impose any
    conditions that it deems reasonable and appropriate in
    connection with such approval, including, without limitation,
    restrictions on the ability of any
</DIV>

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    <BR>
    A-2
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Transferee to Transfer Stock acquired through a Transfer.
    Approvals of the Board of Directors hereunder may be given
    prospectively or retroactively. The Board of Directors, to the
    fullest extent permitted by law, may exercise the authority
    granted by this Article&#160;VIII through duly authorized
    officers or agents of the Corporation. Nothing in this paragraph
    (c)&#160;of this Article&#160;VIII shall be construed to limit
    or restrict the Board of Directors in the exercise of its
    fiduciary duties under applicable law.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;<I><U>Excess Securities</U>.</I>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;No employee or agent of the Corporation shall record
    any Prohibited Transfer, and the purported transferee of such a
    Prohibited Transfer (the <I>&#147;Purported
    Transferee&#148;</I>) shall not be recognized as a stockholder
    of the Corporation for any purpose whatsoever in respect of the
    Corporation Securities which are the subject of the Prohibited
    Transfer (the <I>&#147;Excess Securities&#148; </I>). Until the
    Excess Securities are acquired by another person in a Transfer
    that is not a Prohibited Transfer, the Purported Transferee
    shall not be entitled with respect to such Excess Securities to
    any rights of stockholders of the Corporation, including,
    without limitation, the right to vote such Excess Securities and
    to receive dividends or distributions, whether liquidating or
    otherwise, in respect thereof, if any, and the Excess Securities
    shall be deemed to remain with the transferor unless and until
    the Excess Securities are transferred to the Agent pursuant to
    paragraph (e)&#160;of this Article&#160;VIII or until an
    approval is obtained under paragraph (c)&#160;of this
    Article&#160;VIII. After the Excess Securities have been
    acquired in a Transfer that is not a Prohibited Transfer, the
    Corporation Securities shall cease to be Excess Securities. For
    this purpose, any Transfer of Excess Securities not in
    accordance with the provisions of paragraphs (d)&#160;or
    (e)&#160;of this Article&#160;VIII shall also be a Prohibited
    Transfer.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;The Corporation may require as a condition to the
    registration of the Transfer of any Corporation Securities or
    the payment of any distribution on any Corporation Securities
    that the proposed Transferee or payee furnish to the Corporation
    all information reasonably requested by the Corporation with
    respect to its direct or indirect ownership interests in such
    Corporation Securities. The Corporation may make such
    arrangements or issue such instructions to its stock transfer
    agent as may be determined by the Board of Directors to be
    necessary or advisable to implement this Article&#160;VIII,
    including, without limitation, authorizing such transfer agent
    to require an affidavit from a Purported Transferee regarding
    such Person&#146;s actual and constructive ownership of stock
    and other evidence that a Transfer will not be prohibited by
    this Article&#160;VIII as a condition to registering any
    transfer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;<I><U>Transfer To Agent</U>.</I>&#160;&#160;If the
    Board of Directors determines that a Transfer of Corporation
    Securities constitutes a Prohibited Transfer then, upon written
    demand by the Corporation sent within thirty days of the date on
    which the Board of Directors determines that the attempted
    Transfer would result in Excess Securities, the Purported
    Transferee shall transfer or cause to be transferred any
    certificate or other evidence of ownership of the Excess
    Securities within the Purported Transferee&#146;s possession or
    control, together with any Prohibited Distributions, to an agent
    designated by the Board of Directors (the
    <I>&#147;Agent&#148;</I>). The Agent shall thereupon sell to a
    buyer or buyers, which may include the Corporation, the Excess
    Securities transferred to it in one or more arm&#146;s-length
    transactions (on the public securities market on which such
    Excess Securities are traded, if possible, or otherwise
    privately); <I>provided, however</I>, that any such sale must
    not constitute a Prohibited Transfer and <I>provided, further,
    </I>that the Agent shall effect such sale or sales in an orderly
    fashion and shall not be required to effect any such sale within
    any specific time frame if, in the Agent&#146;s discretion, such
    sale or sales would disrupt the market for the Corporation
    Securities or otherwise would adversely affect the value of the
    Corporation Securities. If the Purported Transferee has resold
    the Excess Securities before receiving the Corporation&#146;s
    demand to surrender Excess Securities to the Agent, the
    Purported Transferee shall be deemed to have sold the Excess
    Securities for the Agent, and shall be required to transfer to
    the Agent any Prohibited Distributions and proceeds of such
    sale, except to the extent that the Corporation grants written
    permission to the Purported Transferee to retain a portion of
    such sales proceeds not exceeding the amount that the Purported
    Transferee would have received from the Agent pursuant to
    paragraph (f)&#160;of this Article&#160;VIII if the Agent rather
    than the Purported Transferee had resold the Excess Securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;<I><U>Application Of Proceeds And Prohibited
    Distributions</U>.</I>&#160;&#160;The Agent shall apply any
    proceeds of a sale by it of Excess Securities and, if the
    Purported Transferee has previously resold the Excess
    Securities, any amounts received by it from a Purported
    Transferee, together, in either case, with any Prohibited
    Distributions, as follows: (a)&#160;first, such amounts shall be
    paid to the Agent to the extent necessary to cover its costs and
    expenses incurred in connection with its duties hereunder;
    (b)&#160;second, any remaining amounts shall be paid to the
    Purported Transferee, up to the amount paid by the Purported
    Transferee for the Excess Securities (or the fair market value
    at the time of the Transfer, in the event the purported Transfer
    of the Excess Securities was, in whole or in part, a gift,
    inheritance
</DIV>

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    <BR>
    A-3
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    or similar Transfer) which amount shall be determined at the
    discretion of the Board of Directors; and (c)&#160;third, any
    remaining amounts shall be paid to one or more organizations
    qualifying under section&#160;501(c)(3) of the Code (or any
    comparable successor provision) selected by the Board of
    Directors. The Purported Transferee of Excess Securities shall
    have no claim, cause of action or any other recourse whatsoever
    against any transferor of Excess Securities. The Purported
    Transferee&#146;s sole right with respect to such shares shall
    be limited to the amount payable to the Purported Transferee
    pursuant to this paragraph (f)&#160;of Article&#160;VIII. In no
    event shall the proceeds of any sale of Excess Securities
    pursuant to this paragraph (f)&#160;of Article&#160;VIII inure
    to the benefit of the Corporation or the Agent, except to the
    extent used to cover costs and expenses incurred by Agent in
    performing its duties hereunder.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (g)&#160;<I><U>Modification Of Remedies For Certain Indirect
    Transfers</U>.</I>&#160;&#160;In the event of any Transfer which
    does not involve a transfer of securities of the Corporation
    within the meaning of Maryland law
    (<I>&#147;Securities,&#148;</I> and individually, a
    <I>&#147;Security&#148;</I>) but which would cause a
    4.9-percent&#160;Stockholder to violate a restriction on
    Transfers provided for in this Article&#160;VIII, the
    application of paragraphs (e)&#160;and (f)&#160;of this
    Article&#160;VIII shall be modified as described in this
    paragraph (g)&#160;of this Article&#160;VIII. In such case, no
    such 4.9-percent&#160;Stockholder shall be required to dispose
    of any interest that is not a Security, but such
    4.9-percent&#160;Stockholder
    <FONT style="white-space: nowrap">and/or</FONT> any
    Person whose ownership of Securities is attributed to such
    4.9-percent&#160;Stockholder shall be deemed to have disposed of
    and shall be required to dispose of sufficient Securities (which
    Securities shall be disposed of in the inverse order in which
    they were acquired) to cause such 4.9-percent&#160;Stockholder,
    following such disposition, not to be in violation of this
    Article&#160;VIII. Such disposition shall be deemed to occur
    simultaneously with the Transfer giving rise to the application
    of this provision, and such number of Securities that are deemed
    to be disposed of shall be considered Excess Securities and
    shall be disposed of through the Agent as provided in paragraphs
    (e)&#160;and (f)&#160;of this Article&#160;VIII, except that the
    maximum aggregate amount payable either to such
    4.9-percent&#160;Stockholder, or to such other Person that was
    the direct holder of such Excess Securities, in connection with
    such sale shall be the fair market value of such Excess
    Securities at the time of the purported Transfer. All expenses
    incurred by the Agent in disposing of such Excess Stock shall be
    paid out of any amounts due such 4.9-percent&#160;Stockholder or
    such other Person. The purpose of this paragraph (g)&#160;of
    Article&#160;VIII is to extend the restrictions in paragraphs
    (b)&#160;and (e)&#160;of this Article&#160;VIII to situations in
    which there is a 4.9-percent&#160;Transaction without a direct
    Transfer of Securities, and this paragraph (g)&#160;of
    Article&#160;VIII, along with the other provisions of this
    Article&#160;VIII, shall be interpreted to produce the same
    results, with differences as the context requires, as a direct
    Transfer of Corporation Securities.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (h)&#160;<I><U>Legal Proceedings; Prompt
    Enforcement</U>.</I>&#160;&#160;If the Purported Transferee
    fails to surrender the Excess Securities or the proceeds of a
    sale thereof to the Agent within thirty days from the date on
    which the Corporation makes a written demand pursuant to
    paragraph (e)&#160;of this Article&#160;VIII (whether or not
    made within the time specified in paragraph (e)&#160;of this
    Article&#160;VIII), then the Corporation shall promptly take all
    cost effective actions which it believes are appropriate to
    enforce the provisions hereof, including the institution of
    legal proceedings to compel the surrender. Nothing in this
    paragraph (h)&#160;of Article&#160;VIII shall (i)&#160;be deemed
    inconsistent with any Transfer of the Excess Securities provided
    in this Article&#160;VIII being void <I>ab initio</I>,
    (ii)&#160;preclude the Corporation in its discretion from
    immediately bringing legal proceedings without a prior demand or
    (iii)&#160;cause any failure of the Corporation to act within
    the time periods set forth in paragraph (e)&#160;of this
    Article&#160;VIII to constitute a waiver or loss of any right of
    the Corporation under this Article&#160;VIII. The Board of
    Directors may authorize such additional actions as it deems
    advisable to give effect to the provisions of this
    Article&#160;VIII.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;<I><U>Liability</U>.</I>&#160;&#160;To the fullest
    extent permitted by law, any stockholder subject to the
    provisions of this Article&#160;VIII who knowingly violates the
    provisions of this Article&#160;VIII and any Persons
    controlling, controlled by or under common control with such
    stockholder shall be jointly and severally liable to the
    Corporation for, and shall indemnify and hold the Corporation
    harmless against, any and all damages suffered as a result of
    such violation, including but not limited to damages resulting
    from a reduction in, or elimination of, the Corporation&#146;s
    ability to utilize its Tax Benefits, and attorneys&#146; and
    auditors&#146; fees incurred in connection with such violation.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (j)&#160;<I><U>Obligation To Provide
    Information</U>.</I>&#160;&#160;As a condition to the
    registration of the Transfer of any Stock, any Person who is a
    beneficial, legal or record holder of Stock, and any proposed
    Transferee and any Person controlling, controlled by or under
    common control with the proposed Transferee, shall provide such
    information as the Corporation may request from time to time in
    order to determine compliance with this Article&#160;VIII or the
    status of the Tax Benefits of the Corporation.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-4
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (k)&#160;<I><U>Legends</U>.</I>&#160;&#160;The Board of
    Directors may require that any certificates issued by the
    Corporation evidencing ownership of shares of Stock that are
    subject to the restrictions on transfer and ownership contained
    in this Article&#160;VIII bear the following legend:
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;THE ARTICLES&#160;OF INCORPORATION, AS AMENDED (THE
    &#147;CHARTER&#148;), OF THE CORPORATION CONTAINS RESTRICTIONS
    PROHIBITING THE TRANSFER (AS DEFINED IN THE CHARTER) OF COMMON
    STOCK OF THE CORPORATION (INCLUDING THE CREATION OR GRANT OF
    CERTAIN OPTIONS, RIGHTS AND WARRANTS) WITHOUT THE PRIOR
    AUTHORIZATION OF THE BOARD OF DIRECTORS OF THE CORPORATION (THE
    &#147;BOARD OF DIRECTORS&#148;) IF SUCH TRANSFER AFFECTS THE
    PERCENTAGE OF STOCK OF THE CORPORATION (WITHIN THE MEANING OF
    SECTION&#160;382 OF THE INTERNAL REVENUE CODE OF 1986, AS
    AMENDED (THE &#147;CODE&#148;) AND THE TREASURY REGULATIONS
    PROMULGATED THEREUNDER), THAT IS TREATED AS OWNED BY A FIVE
    PERCENT&#160;SHAREHOLDER UNDER THE CODE AND SUCH REGULATIONS. IF
    THE TRANSFER RESTRICTIONS ARE VIOLATED, THEN THE TRANSFER WILL
    BE VOID <I>AB INITIO </I>AND THE PURPORTED TRANSFEREE OF THE
    STOCK WILL BE REQUIRED TO TRANSFER EXCESS SECURITIES (AS DEFINED
    IN THE CHARTER) TO THE CORPORATION&#146;S AGENT. IN THE EVENT OF
    A TRANSFER WHICH DOES NOT INVOLVE SECURITIES OF THE CORPORATION
    WITHIN THE MEANING OF THE GENERAL CORPORATION LAW OF THE STATE
    OF MARYLAND (&#147;SECURITIES&#148;) BUT WHICH WOULD VIOLATE THE
    TRANSFER RESTRICTIONS, THE PURPORTED TRANSFEREE (OR THE RECORD
    OWNER) OF THE SECURITIES WILL BE REQUIRED TO TRANSFER SUFFICIENT
    SECURITIES PURSUANT TO THE TERMS PROVIDED FOR IN THE
    CORPORATION&#146;S CHARTER TO CAUSE THE FIVE
    PERCENT&#160;STOCKHOLDER TO NO LONGER BE IN VIOLATION OF THE
    TRANSFER RESTRICTIONS. THE CORPORATION WILL FURNISH WITHOUT
    CHARGE TO THE HOLDER OF RECORD OF THIS CERTIFICATE A COPY OF THE
    CHARTER, CONTAINING THE ABOVE-REFERENCED TRANSFER RESTRICTIONS,
    UPON WRITTEN REQUEST TO THE CORPORATION AT ITS PRINCIPAL PLACE
    OF BUSINESS.&#148;
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Board of Directors may also require that any certificates
    issued by the Corporation evidencing ownership of shares of
    Stock that are subject to conditions imposed by the Board of
    Directors under paragraph (c)&#160;of this Article&#160;VIII
    also bear a conspicuous legend referencing the applicable
    restrictions.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (l)&#160;<I><U>Authority Of Board Of Directors</U>.</I>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;The Board of Directors shall have the power to
    determine all matters necessary for assessing compliance with
    this Article&#160;VIII, including, without limitation,
    (i)&#160;the identification of 4.9-percent&#160;Stockholders,
    (ii)&#160;whether a Transfer is a 4.9-percent&#160;Transaction
    or a Prohibited Transfer, (iii)&#160;the Percentage Stock
    Ownership in the Corporation of any
    4.9-percent&#160;Stockholder, (iv)&#160;whether an instrument
    constitutes a Corporation Security, (v)&#160;the amount (or fair
    market value) due to a Purported Transferee pursuant to
    paragraph (f)&#160;of this Article&#160;VIII, and (vi)&#160;any
    other matters which the Board of Directors determines to be
    relevant; and the good faith determination of the Board of
    Directors on such matters shall be conclusive and binding for
    all the purposes of this Article&#160;VIII. In addition, the
    Board of Directors may, to the extent permitted by law, from
    time to time establish, modify, amend or rescind by-laws,
    regulations and procedures of the Corporation not inconsistent
    with the provisions of this Article&#160;VIII for purposes of
    determining whether any Transfer of Corporation Securities would
    jeopardize the Corporation&#146;s ability to preserve and use
    the Tax Benefits and for the orderly application, administration
    and implementation of this Article&#160;VIII.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;Nothing contained in this Article&#160;VIII shall limit
    the authority of the Board of Directors to take such other
    action to the extent permitted by law as it deems necessary or
    advisable to protect the Corporation and its stockholders in
    preserving the Tax Benefits. Without limiting the generality of
    the foregoing, in the event of a change in law making one or
    more of the following actions necessary or desirable, the Board
    of Directors may, by adopting a written resolution,
    (i)&#160;accelerate or extend the Expiration Date,
    (ii)&#160;modify the ownership interest percentage in the
    Corporation or the Persons or groups covered by this
    Article&#160;VIII, (iii)&#160;modify the definitions of any
    terms set forth in this Article&#160;VIII or (iv)&#160;modify
    the terms of this Article&#160;VIII as appropriate, in each
    case, in order to prevent an ownership change for purposes of
    Section&#160;382 of the Code as a result of any changes in
    applicable Treasury Regulations or otherwise; <I>provided,
    however</I>, that the Board of Directors shall not cause there
    to be such acceleration, extension or modification unless it
    determines, by adopting a written resolution, that such
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-5
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    action is reasonably necessary or advisable to preserve the Tax
    Benefits or that the continuation of these restrictions is no
    longer reasonably necessary for the preservation of the Tax
    Benefits. Stockholders of the Corporation shall be notified of
    such determination through a filing with the Securities and
    Exchange Commission or such other method of notice as the
    Secretary of the Corporation shall deem appropriate.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;In the case of an ambiguity in the application of any
    of the provisions of this Article&#160;VIII, including any
    definition used herein, the Board of Directors shall have the
    power to determine the application of such provisions with
    respect to any situation based on its reasonable belief,
    understanding or knowledge of the circumstances. In the event
    this Article&#160;VIII requires an action by the Board of
    Directors but fails to provide specific guidance with respect to
    such action, the Board of Directors shall have the power to
    determine the action to be taken so long as such action is not
    contrary to the provisions of this Article&#160;VIII. All such
    actions, calculations, interpretations and determinations which
    are done or made by the Board of Directors in good faith shall
    be conclusive and binding on the Corporation, the Agent, and all
    other parties for all other purposes of this Article&#160;VIII.
    The Board of Directors may delegate all or any portion of its
    duties and powers under this Article&#160;VIII to a committee of
    the Board of Directors as it deems necessary or advisable and,
    to the fullest extent permitted by law, may exercise the
    authority granted by this Article&#160;VIII through duly
    authorized officers or agents of the Corporation. Nothing in
    this Article&#160;VIII shall be construed to limit or restrict
    the Board of Directors in the exercise of its fiduciary duties
    under applicable law.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (m)&#160;<I><U>Reliance</U>.</I>&#160;&#160;To the fullest
    extent permitted by law, the Corporation and the members of the
    Board of Directors shall be fully protected in relying in good
    faith upon the information, opinions, reports or statements of
    the chief executive officer, the chief financial officer, the
    chief accounting officer or the corporate controller of the
    Corporation and the Corporation&#146;s legal counsel,
    independent auditors, transfer agent, investment bankers or
    other employees and agents in making the determinations and
    findings contemplated by this Article&#160;VIII. The members of
    the Board of Directors shall not be responsible for any good
    faith errors made in connection therewith. For purposes of
    determining the existence and identity of, and the amount of any
    Corporation Securities owned by any stockholder, the Corporation
    is entitled to rely on the existence and absence of filings of
    Schedule&#160;13D or 13G under the Securities and Exchange Act
    of 1934, as amended (or similar filings), as of any date,
    subject to its actual knowledge of the ownership of Corporation
    Securities.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (n)&#160;<I><U>Benefits Of This
    Article&#160;VIII</U>.</I>&#160;&#160;Nothing in this
    Article&#160;VIII shall be construed to give to any Person other
    than the Corporation or the Agent any legal or equitable right,
    remedy or claim under this Article&#160;VIII. This
    Article&#160;VIII shall be for the sole and exclusive benefit of
    the Corporation and the Agent.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (o)&#160;<I><U>Severability</U>.</I>&#160;&#160;The purpose of
    this Article&#160;VIII is to facilitate the Corporation&#146;s
    ability to maintain or preserve its Tax Benefits. If any
    provision of this Article&#160;VIII or the application of any
    such provision to any Person or under any circumstance shall be
    held invalid, illegal or unenforceable in any respect by a court
    of competent jurisdiction, such invalidity, illegality or
    unenforceability shall not affect any other provision of this
    Article&#160;VIII.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (p)&#160;<I><U>Waiver</U>.</I>&#160;&#160;With regard to any
    power, remedy or right provided herein or otherwise available to
    the Corporation or the Agent under this Article&#160;VIII,
    (i)&#160;no waiver will be effective unless expressly contained
    in a writing signed by the waiving party; and (ii)&#160;no
    alteration, modification or impairment will be implied by reason
    of any previous waiver, extension of time, delay or omission in
    exercise, or other indulgence.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><U>SECOND</U>.</I>&#160;&#160;The amendment of the charter of
    the Corporation as hereinabove set forth was duly adopted,
    pursuant to, and in accordance with, the provisions of
    <FONT style="white-space: nowrap">Sections&#160;2-408</FONT>
    and 2-604 of the Maryland General Corporation Law, by the Board
    of Directors of the Corporation on December&#160;19, 2008.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><U>THIRD</U>.</I>&#160;&#160;The amendment of the charter of
    the Corporation as hereinabove set forth was duly adopted,
    pursuant to, and in accordance with, the provisions of
    <FONT style="white-space: nowrap">Sections&#160;2-508</FONT>
    and 2-604 of the Maryland General Corporation Law, by the
    stockholders of the Corporation by the affirmative vote of not
    less than a majority of the outstanding shares of Common Stock
    on
    [&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;].
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="48%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="5%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="47%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    ATTEST:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    MERITAGE HOMES CORPORATION
</TD>
</TR>
<TR valign="bottom" style="line-height: 18pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
    <DIV style="font-size: 3pt; margin-left: 0%; width: 100%; border-bottom: 1pt solid #000000"></DIV><!-- callerid=208 iwidth=215 length=216 -->
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <DIV style="font-size: 3pt; margin-left: 0%; width: 100%; border-bottom: 1pt solid #000000"></DIV><!-- callerid=208 iwidth=215 length=216 -->
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Name: C. Timothy White
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Name:  Steven J. Hilton
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Title: Secretary
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Title: Chairman and Chief Executive Officer
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Date: February&#160;&#160;&#160;, 2009
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Date:  February&#160;&#160;&#160;, 2009
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-6
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MERITAGE
    HOMES CORPORATION<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SPECIAL
    MEETING OF STOCKHOLDERS&#160;&#151; FEBRUARY 16, 2009</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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 Special Meeting of Stockholders to be held at the
    Company&#146;s headquarters, 17851 North 85th&#160;Street,
    Suite&#160;100, Scottsdale, Arizona 85255, on Monday,
    February&#160;16, 2009 at 10:00&#160;a.m. local time, and at any
    adjournment or adjournments thereof, with all the powers the
    undersigned would possess if present.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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 NOL
    PROTECTIVE AMENDMENT SET FORTH IN PROPOSAL&#160;1 AND IN THE
    DISCRETION OF THE PROXIES ON SUCH OTHER MATTERS AS MAY PROPERLY
    COME BEFORE THE MEETING OR ANY ADJOURNMENTS THEREOF.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Please
    mark, sign and date the reverse side and<BR>
    return the proxy card promptly using the enclosed envelope.<BR>
    (Continued on reverse side)</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 79%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=360 -->



<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Address Change/Comments (Mark the corresponding box on the
    reverse side)
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 79%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=360 -->

<DIV style="margin-top: 36pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 79%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=360 -->

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=0 -->

<DIV style="margin-top: 36pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">/*\ FOLD
    AND DETACH HERE /*\</FONT></B>
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=0 -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="70%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="24%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Please Mark Here for <BR>
    Address Change or <BR>
    Comments
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    <FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    SEE REVERSE SIDE
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=01 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=01 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=01 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="62%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="4%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="9%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="9%">&nbsp;</TD>	<!-- colindex=05 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    1.
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    To approve the amendment to the Company&#146;s Articles of
    Incorporation authorizing the NOL Protective Amendment.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    FOR <BR>
    <FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    AGAINST<BR>
    <FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    ABSTAIN<BR>
    <FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    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 NOL PROTECTIVE AMENDMENT SET FORTH
    IN PROPOSAL&#160;1, 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.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="34%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="31%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="31%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -41pt; margin-left: 41pt">
    Signature&#160;<FONT style="word-spacing: 100pt; white-space: nowrap; font-size: 1pt"><U>&#173;
    &#173;</U></FONT><!-- callerid=208 iwidth=145 length=0 -->
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -41pt; margin-left: 41pt">
    Signature&#160;<FONT style="word-spacing: 100pt; white-space: nowrap; font-size: 1pt"><U>&#173;
    &#173;</U></FONT><!-- callerid=208 iwidth=145 length=0 -->
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -21pt; margin-left: 21pt">
    Date&#160;<FONT style="word-spacing: 100pt; white-space: nowrap; font-size: 1pt"><U>&#173;
    &#173;</U></FONT><!-- callerid=208 iwidth=145 length=0 -->
</DIV>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=0 -->

<DIV style="margin-top: 21pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">/*\ FOLD
    AND DETACH HERE /*\</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">WE
    ENCOURAGE YOU TO TAKE ADVANTAGE OF INTERNET OR TELEPHONE
    VOTING,<BR>
    BOTH ARE AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK.</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Internet
    and telephone voting is available through 11:59&#160;PM Eastern
    Time<BR>
    the day prior to the special meeting day.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">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.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="47%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="45%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD nowrap align="center" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>INTERNET <BR>
    <FONT style="white-space: nowrap">http://www.proxyvoting.com/mth</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="middle">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    <B>TELEPHONE<BR>
    1-866-540-5760</B>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    Use the Internet to vote your proxy. Have your proxy card in
    hand when you access the web site.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="middle">
    <B>OR</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Use any touch-tone telephone to vote your proxy. Have your proxy
    card in hand when you call.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 9pt">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>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 5%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Choose<B>MLink<SUP style="font-size: 85%; vertical-align: top">SM</SUP>

    </B>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 <B>Investor
    ServiceDirect<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>

    </B>at www.bnymellon.com/shareowner/isd where
    <FONT style="white-space: nowrap">step-by-step</FONT>
    instructions will prompt you through enrollment.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 90%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=0 -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MERITAGE
    HOMES CORPORATION</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">401
    (k)&#160;Retirement Plan<BR>
    TO: Wells Fargo Retirement Plan Services</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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)&#160;Retirement Plan, at the Special
    Meeting of Stockholders to be held on February&#160;16, 2009,
    and any postponements or adjournments thereof.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Please
    mark, sign and date the reverse side and<BR>
    return the proxy card promptly using the enclosed envelope.<BR>
    (Continued on reverse side)</FONT></B>
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 79%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=360 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">Address
    Change/Comments (Mark the corresponding box on the reverse side)
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 79%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=360 -->

<DIV style="margin-top: 36pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 79%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=360 -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=0 -->

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">/*\ FOLD
    AND DETACH HERE /*\</FONT></B>
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=0 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="70%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="24%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Please Mark Here for<BR>
    Address Change or<BR>
    Comments
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    <FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    SEE REVERSE SIDE
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=01 type=lead -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=01 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=01 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="63%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="4%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="9%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="9%">&nbsp;</TD>	<!-- colindex=05 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    1.
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    To approve the amendment to the Company&#146;s Articles of
    Incorporation authorizing the NOL Protective Amendment.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    FOR<BR>
    <FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    AGAINST<BR>
    <FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    ABSTAIN<BR>
    <FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    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 NOL PROTECTIVE AMENDMENT SET FORTH
    IN PROPOSAL&#160;1, 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.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
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    <TD width="31%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="31%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Signature&#160;<FONT style="word-spacing: 100pt; white-space: nowrap; font-size: 1pt"><U>&#173;
    &#173;</U></FONT><!-- callerid=208 iwidth=145 length=0 -->
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Signature&#160;<FONT style="word-spacing: 100pt; white-space: nowrap; font-size: 1pt"><U>&#173;
    &#173;</U></FONT><!-- callerid=208 iwidth=145 length=0 -->
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Date&#160;<FONT style="word-spacing: 100pt; white-space: nowrap; font-size: 1pt"><U>&#173;
    &#173;</U></FONT><!-- callerid=208 iwidth=145 length=0 -->
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">/*\ FOLD
    AND DETACH HERE /*\</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <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 (&#147;the Plan&#148;), to
    vote all shares of common stock of Meritage Homes Corporation
    allocated to my account as of January&#160;5, 2009.</B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <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 February&#160;13, 2009. 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>
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">WE
    ENCOURAGE YOU TO TAKE ADVANTAGE OF INTERNET OR TELEPHONE
    VOTING,<BR>
    BOTH ARE AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Internet
    and telephone voting is available through 11:59&#160;PM Eastern
    Time<BR>
    the day prior to the special meeting day.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">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.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="47%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="46%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD nowrap align="center" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>INTERNET<BR>
    <FONT style="white-space: nowrap">http://www.proxyvoting.com/mth</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="middle">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    <B>TELEPHONE<BR>
    1-866-540-5760</B>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    Use the Internet to vote your proxy. Have your proxy card in
    hand when you access the web site.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="middle">
    <B>OR</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Use any touch-tone telephone to vote your proxy. Have your proxy
    card in hand when you call.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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.
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

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