<SEC-DOCUMENT>0001193125-14-114023.txt : 20140325
<SEC-HEADER>0001193125-14-114023.hdr.sgml : 20140325
<ACCEPTANCE-DATETIME>20140325132840
ACCESSION NUMBER:		0001193125-14-114023
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		13
CONFORMED PERIOD OF REPORT:	20140514
FILED AS OF DATE:		20140325
DATE AS OF CHANGE:		20140325
EFFECTIVENESS DATE:		20140325

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Meritage Homes CORP
		CENTRAL INDEX KEY:			0000833079
		STANDARD INDUSTRIAL CLASSIFICATION:	OPERATIVE BUILDERS [1531]
		IRS NUMBER:				860611231
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-09977
		FILM NUMBER:		14715361

	BUSINESS ADDRESS:	
		STREET 1:		8800 EAST RAINTREE DRIVE
		STREET 2:		SUITE 300
		CITY:			SCOTTSDALE
		STATE:			AZ
		ZIP:			85260
		BUSINESS PHONE:		480-515-8100

	MAIL ADDRESS:	
		STREET 1:		8800 EAST RAINTREE DRIVE
		STREET 2:		SUITE 300
		CITY:			SCOTTSDALE
		STATE:			AZ
		ZIP:			85260

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MERITAGE CORP
		DATE OF NAME CHANGE:	19981009

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MONTEREY HOMES CORP
		DATE OF NAME CHANGE:	19970113

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	HOMEPLEX MORTGAGE INVESTMENTS CORP
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>d680825ddef14a.htm
<DESCRIPTION>DEFINITIVE PROXY STATEMENT
<TEXT>
<HTML><HEAD>
<TITLE>Definitive Proxy Statement</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="line-height:0px;margin-top:0px;margin-bottom:0px;border-bottom:0.5pt solid #000000">&nbsp;</P>
<P STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>UNITED STATES </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>SECURITIES AND EXCHANGE COMMISSION </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="3"><B>Washington,&nbsp;D.C. 20549 </B></FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>SCHEDULE&nbsp;14A </B></FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="3"><B>Proxy Statement Pursuant to Section&nbsp;14(a) of the </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="3"><B>Securities Exchange Act of 1934 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="3"><B>(Amendment No.&nbsp;&nbsp;&nbsp;)
</B></FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Filed by the Registrant
&nbsp;&nbsp;<FONT STYLE="FONT-FAMILY:WINGDINGS">&#120;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Filed by a Party
other than the Registrant &nbsp;&nbsp;<FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Check the appropriate box: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Preliminary Proxy Statement </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Confidential, for Use of the Commission Only (as permitted by Rule&nbsp;14a-6(e)(2))</B> </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#120;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Definitive Proxy Statement </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Definitive Additional Materials </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Soliciting Material Pursuant to &#167;240.14a-12 </FONT></TD></TR></TABLE> <P STYLE="margin-top:8px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="6"><B>Meritage Homes Corporation </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(Name of Registrant as Specified In Its
Charter) </B></FONT></P> <P STYLE="margin-top:10px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(Name of Person(s) Filing Proxy Statement, if other than the Registrant) </B></FONT></P>
<P STYLE="margin-top:20px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Payment of Filing Fee (Check the appropriate box): </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#120;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">No fee required. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Fee computed on table below per Exchange Act Rules&nbsp;14a-6(i)(1) and 0-11. </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Title of each class of securities to which transaction applies: </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="line-height:0px;margin-top:0px;margin-bottom:2px;margin-left:7%;border-bottom:0.5pt solid #000000">&nbsp;</P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(2)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Aggregate number of securities to which transaction applies: </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="line-height:0px;margin-top:0px;margin-bottom:2px;margin-left:7%;border-bottom:0.5pt solid #000000">&nbsp;</P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(3)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule&nbsp;0-11 (set forth the amount on which the filing fee is calculated and
state how it was determined): </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="line-height:0px;margin-top:0px;margin-bottom:2px;margin-left:7%;border-bottom:0.5pt solid #000000">&nbsp;</P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(4)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Proposed maximum aggregate value of transaction: </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="line-height:0px;margin-top:0px;margin-bottom:2px;margin-left:7%;border-bottom:0.5pt solid #000000">&nbsp;</P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(5)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Total fee paid: </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="line-height:0px;margin-top:0px;margin-bottom:2px;margin-left:7%;border-bottom:0.5pt solid #000000">&nbsp;</P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Fee paid previously with preliminary materials: </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Check box if any part of the fee is offset as provided by Exchange Act Rule&nbsp;0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Amount Previously Paid. </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="line-height:0px;margin-top:0px;margin-bottom:2px;margin-left:7%;border-bottom:0.5pt solid #000000">&nbsp;</P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(2)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Form, Schedule or Registration Statement No.: </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="line-height:0px;margin-top:0px;margin-bottom:2px;margin-left:7%;border-bottom:0.5pt solid #000000">&nbsp;</P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(3)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Filing Party: </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="line-height:0px;margin-top:0px;margin-bottom:2px;margin-left:7%;border-bottom:0.5pt solid #000000">&nbsp;</P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(4)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Date Filed: </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="line-height:0px;margin-top:0px;margin-bottom:2px;margin-left:7%;border-bottom:0.5pt solid #000000">&nbsp;</P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="line-height:0px;margin-top:0px;margin-bottom:0px;border-bottom:0.5pt solid #000000">&nbsp;</P> <P STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P>

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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P>&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify">


<IMG SRC="g680825g13q33.jpg" ALT="LOGO">
 </P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Dear Fellow Stockholders: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">You are cordially invited to join us for our 2014 annual meeting of stockholders, which will be held on May&nbsp;14, 2014, at 10:00 a.m. local time at our <B>new corporate office location</B> (effective
March&nbsp;31, 2014) at 8800 E. Raintree Drive, Suite 300, Scottsdale, Arizona, 85260. Holders of record of our common stock as of March&nbsp;20, 2014 are entitled to notice of and to vote at the 2014 annual meeting. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Notice of Annual Meeting of Stockholders and the proxy statement that follow describe the business to be conducted at the meeting. We may also
report on matters of current interest to our stockholders at that meeting. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">We are pleased to be furnishing these materials to our
stockholders via the Internet again this year. We believe this approach provides you with the information that you need while expediting your receipt of these materials, lowering our costs of delivery, and reducing the environmental impact of our
annual meeting. If you would like us to send you printed copies of our proxy statement and accompanying materials, we will be happy to do so at no charge upon your request. For more information, please refer to the Notice of Internet Availability of
Proxy Materials that we previously mailed to you on or about April&nbsp;1, 2014. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">You are welcome to attend the meeting. However, even if
you plan to attend, please vote your shares promptly and prior to the meeting to ensure they are represented at the meeting. You may submit your proxy by Internet or telephone, as described in the following materials, or if you request printed
copies of these materials, by completing and signing the proxy card enclosed therein and returning it in the envelope provided. If you decide to attend the meeting and wish to change your proxy, you may do so automatically by voting in person at the
meeting. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">If your shares are held in the name of a broker, bank, trust or other nominee, you may be asked for proof of ownership of these
shares to be admitted to the meeting. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">We thank you for your support. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Sincerely, </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify">


<IMG SRC="g680825g29i48.jpg" ALT="LOGO">
 </P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Steven J. Hilton </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">Chairman and Chief Executive Officer </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="2">8800 East Raintree Drive <FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT> Suite 300 <FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT>
Scottsdale, Arizona <FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT> 85260 <FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="2"></FONT> Phone 480-515-8100 </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="2"><I>Listed on the New York Stock Exchange &#151; MTH </I></FONT></P>

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<IMG SRC="g680825g13q33.jpg" ALT="LOGO">
 </P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="6" COLOR="#32406b"><B>Notice of Annual Meeting of Stockholders </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><B>Date: May&nbsp;14, 2014 </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><B>Time: 10:00 a.m. local time </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><B>Meritage Homes Corporation (new location) </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2"><B>8800 East Raintree Drive, Suite 300 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><B>Scottsdale, Arizona 85260 </B></FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">To Our Stockholders: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">You are
invited to attend the Meritage Homes Corporation 2014 annual meeting of stockholders at which we will conduct the following business: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2">1</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Election of four Class I Directors, each to hold office until our 2016 annual meeting, </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2">2</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Ratification of the selection of Deloitte&nbsp;&amp; Touche LLP as the Company&#146;s independent registered public accounting firm for the 2014 fiscal year,
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2">3</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Advisory vote to approve compensation of our Named Executive Officers, </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2">4</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Approve the Amended and Restated 2006 Stock Incentive Plan, </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>

<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2">5</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Approve an Amendment to and extension of our Executive Management Incentive Plan. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2">6</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The conduct of any other business that may properly come before the meeting or any adjournment or postponement thereof. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">These items are more fully described in the accompanying proxy. Only stockholders of record at the close of business on March&nbsp;20, 2014 are
entitled to notice of, and to vote at, the annual meeting or any adjournment or postponement thereof. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><B>YOUR VOTE IS IMPORTANT. WHETHER
OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE SUBMIT YOUR PROXY BY FOLLOWING THE INSTRUCTIONS SET FORTH IN THE FOLLOWING MATERIALS. YOU MAY VOTE YOUR SHARES AND SUBMIT A PROXY BY USING THE INTERNET, REGULAR MAIL OR TELEPHONE AS DESCRIBED HEREIN OR
ON YOUR PROXY CARD. </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE">


<TR>
<TD WIDTH="100%"></TD></TR>


<TR>
<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">By Order of the Board of Directors</FONT></P></TD></TR>
<TR>
<TD HEIGHT="16"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em">


<IMG SRC="g680825g94o52.jpg" ALT="LOGO">
</P></TD></TR>
<TR>
<TD VALIGN="bottom"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">C. Timothy White, Secretary</FONT></P></TD></TR>
</TABLE></DIV> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Scottsdale, Arizona </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">March&nbsp;24, 2014 </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><B>IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL
MEETING OF STOCKHOLDERS TO BE HELD ON MAY 14, 2014: </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><B>THIS PROXY STATEMENT AND MERITAGE&#146;S 2013 ANNUAL REPORT TO STOCKHOLDERS
ARE AVAILABLE AT</B><B><I> INVESTORS.MERITAGEHOMES.COM.</I></B><B> ADDITIONALLY, AND IN ACCORDANCE WITH SEC RULES, YOU MAY ACCESS THESE MATERIALS ON THE COOKIES-FREE WEBSITES INDICATED IN THE NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS THAT
YOU HAVE RECEIVED. </B></FONT></P>

<p Style='page-break-before:always'>
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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;TABLE&nbsp;OF&nbsp;CONTENTS&nbsp;&nbsp;</B></FONT></TD></TR></TABLE></DIV> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="6" COLOR="#32406b"><B><A NAME="toc"></A>Table of Contents </B></FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD VALIGN="top" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B><A HREF="#toc680825_1">Proxy Summary</A></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>2</B></FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;&nbsp;</B></FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><A HREF="#toc680825_2">General Information</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><A HREF="#toc680825_3">The Proposals</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">3</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B><A HREF="#toc680825_4">Election of Directors (Proposal No.&nbsp;1)</A></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>6</B></FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;&nbsp;</B></FONT></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B><A HREF="#toc680825_5">Ratification of Independent Registered Public Accounting Firm (Proposal No.&nbsp;2)
</A></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>7</B></FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;&nbsp;</B></FONT></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B><A HREF="#toc680825_6">Advisory Vote to Approve Compensation of our Named Executive Officers (Proposal
 No.&nbsp;3)</A></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>8</B></FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;&nbsp;</B></FONT></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B><A HREF="#toc680825_9">Amended and Restated 2006 Stock Incentive Plan (Proposal
No.&nbsp;4)</A></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>10</B></FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;&nbsp;</B></FONT></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B><A HREF="#toc680825_10">Amendment to and Extension of our Executive Management Incentive Plan (Proposal
 No.&nbsp;5)</A></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>16</B></FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;&nbsp;</B></FONT></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B><A HREF="#toc680825_11">Security Ownership By Management And Principal
Stockholders</A></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>18</B></FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;&nbsp;</B></FONT></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B><A HREF="#toc680825_12">Corporate Governance and Board Matters</A></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>20</B></FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;&nbsp;</B></FONT></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B><A HREF="#toc680825_13">Compensation Discussion And Analysis</A></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>29</B></FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;&nbsp;</B></FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><A HREF="#toc680825_14">2013 Environment</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">29</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><A HREF="#toc680825_15">Executive Summary</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">29</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><A HREF="#toc680825_17">Compensation Philosophy and Objectives</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">31</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><A HREF="#toc680825_18">Compensation Best Practices</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">32</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><A HREF="#toc680825_19">Compensation Program and Payments</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">32</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><A HREF="#toc680825_20">Security Ownership Requirements</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">36</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><A HREF="#toc680825_21">Stock Options and Other Equity-Based Awards</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">36</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><A HREF="#toc680825_22">Employment Agreements in Effect for 2013</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">37</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><A HREF="#toc680825_23">Discussion of CEO and NEO Compensation</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">38</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><A HREF="#toc680825_24">2014 Developments</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">40</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B><A HREF="#toc680825_25">Executive Compensation Committee Report</A></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>43</B></FONT></TD>
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<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B><A HREF="#toc680825_26">Compensation of Officers and Directors</A></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>44</B></FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;&nbsp;</B></FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px; margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><A HREF="#toc680825_27">Potential Payments upon Termination or Change of Control </A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">47</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><A HREF="#toc680825_30a">Director Compensation </A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">50</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B><A HREF="#toc680825_31">Securities Authorized For Issuance Under Equity Compensation
Plans</A></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>51</B></FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;&nbsp;</B></FONT></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B><A HREF="#toc680825_32">Section&nbsp;16(a) Beneficial Ownership Reporting
Compliance</A></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>52</B></FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;&nbsp;</B></FONT></TD></TR>
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<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B><A HREF="#toc680825_33">Certain Relationships And Related Transactions</A></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>53</B></FONT></TD>
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<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B><A HREF="#toc680825_34">Independent Auditors</A></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>54</B></FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;&nbsp;</B></FONT></TD></TR>
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<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B><A HREF="#toc680825_35">Report of The Audit Committee</A></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>55</B></FONT></TD>
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<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B><A HREF="#toc680825_36">Stockholder Proposals</A></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>56</B></FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;&nbsp;</B></FONT></TD></TR>
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<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B><A HREF="#toc680825_37">Forward-Looking Statements</A></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>57</B></FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;&nbsp;</B></FONT></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B><A HREF="#toc680825_38">Annual Report on Form 10-K and Other Matters</A></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>58</B></FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;&nbsp;</B></FONT></TD></TR>
</TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">1</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;PROXY&nbsp;SUMMARY&nbsp;&nbsp;</B></FONT></TD>
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<TD VALIGN="top"></TD></TR></TABLE> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>MERITAGE HOMES CORPORATION
</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>8800 EAST RAINTREE DRIVE </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>SUITE 300 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>SCOTTSDALE, ARIZONA 85260 </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>(480) 515-8100 </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>www.meritagehomes.com </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="6" COLOR="#32406b"><B><A NAME="toc680825_1">
</A>Proxy Summary </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">This summary highlights selected information contained elsewhere in this proxy statement and is not intended to
contain all of the information that you should consider. Please read the entire proxy statement carefully before voting. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B><A NAME="toc680825_2"></A>General Information </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Proxy Statement Purpose </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><B>The Board of Directors of Meritage Homes Corporation (&#147;Meritage&#148; or the &#147;Company&#148;) is furnishing this Proxy Statement to
solicit your proxy for our 2014 Annual Meeting.</B> This Proxy Statement contains information to help you decide how you want your shares to be voted. This summary highlights selected information from this proxy statement and is not intended to
contain all of the information that you should consider. To understand the proposals fully, you should carefully read this entire proxy statement and the other proxy materials identified in the Notice of Internet Availability of Proxy Materials.
This proxy statement will be available on the internet, and the notice of proxy materials is first to be mailed to stockholders beginning on or about April&nbsp;1, 2014. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Date,&nbsp;Time&nbsp;and&nbsp;Place&nbsp;of&nbsp;Meeting </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The annual meeting
will be held on Wednesday, May&nbsp;14, 2014, at 10:00 a.m. local time at 8800 East Raintree Drive, Suite 300, Scottsdale, Arizona, 85260. If you require directions to the annual meeting, please call (480)&nbsp;515-8100. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Who Can Vote </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Stockholders
who hold shares of our common stock at the close of business on March&nbsp;20, 2014, the record date, will be entitled to one vote for each share held regarding the matters proposed in this proxy statement. 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. On the record date, there were 39,114,486 shares of Meritage common stock outstanding. The common stock is our only outstanding
class of voting securities. Each share is entitled to one vote on each proposal to be voted on at the annual meeting. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Voting
Information </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">You can vote in person at the annual meeting or submit a proxy to have your shares represented without attending the
annual meeting. The shares represented by a properly executed proxy will be voted as you direct. To submit a proxy, you must follow the instructions provided in this proxy statement and in the Notice. You may submit your proxy via the Internet,
regular mail, or by calling the telephone number provided in the Notice, and you will be asked to enter your 11- or 12-digit control number. If you request a printed copy of these materials, you may also fill out and sign the proxy card enclosed
therein and return it by mail in the envelope provided. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">If you submit a signed proxy but do not indicate any voting instructions, your
shares will be voted FOR the election as directors of the nominees named in this proxy statement, FOR the ratification of the selection of Deloitte&nbsp;&amp; Touche LLP as the Company&#146;s independent registered public accounting firm for 2014,
FOR the advisory vote to approve compensation of our named executive officers, FOR the Amended and Restated 2006 Stock Incentive Plan, and FOR the amendment to and extension of our Executive Management Incentive Plan. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">You can revoke your proxy any time before it is voted by written notice delivered to the Company&#146;s Secretary, by timely delivery of a later
signed proxy (including via the Internet, regular mail, or telephone), or by voting in person at the annual meeting. Attendance at the meeting alone is not sufficient to revoke your proxy. You must also vote your shares to revoke your proxy.
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">2</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;PROXY&nbsp;SUMMARY&nbsp;&nbsp;</B></FONT></TD></TR></TABLE></DIV> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Holders of Record </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">If your shares are registered directly in your name with our transfer agent, you are considered the &#147;holder of record&#148; of those shares. 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 the Notice is 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. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Voting Proxies </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">As the
record or beneficial owner of shares, you are invited to attend the annual meeting. Please note, however, that if you are a beneficial owner, you may not vote your shares in person at the meeting unless you obtain a &#147;legal proxy&#148; from the
record holder that holds your shares. Rules of the New York Stock Exchange (the &#147;NYSE&#148;) 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 a beneficial 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 beneficial 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 beneficial owner does not provide instructions. If you do not give
instructions to your record holder prior to the meeting, the record holder will be entitled to vote your shares in its discretion only on Proposal 2 (Ratification of Independent Registered Public Accounting Firm) and will not be able to vote your
shares on Proposal 1 (Election of Directors), Proposal 3 (Advisory Vote to Approve Compensation of our Named Executive Officers), Proposal 4 (Amended and Restated 2006 Stock Incentive Plan), or Proposal 5 (Amendment to and Extension of our Executive
Management Incentive Plan) and your shares will be treated as a &#147;broker non-vote&#148; on those proposals. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Quorum
</B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The presence in person or by proxy of stockholders representing a majority of the votes entitled to be cast at the meeting is
necessary to constitute a quorum at the meeting. Abstentions and broker non-votes are counted as present for purposes of determining whether a quorum exists. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="4"><B><A NAME="toc680825_3"></A>The Proposals </B></FONT></P> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The following five proposals will be considered at the Annual Meeting: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="bottom" COLSPAN="3" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Proposal</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Board Vote<BR>Recommendation</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Page&nbsp;Number</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">1</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">Election of Directors</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">FOR&nbsp;Each&nbsp;Director</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">6</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">2</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">Ratification of Auditor</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">FOR</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">7</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">3</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">Advisory Vote to Approve Compensation of our Named Executive Officers</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">FOR</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">8</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">4</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">Amended and Restated 2006 Stock Incentive Plan</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">FOR</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">10</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">5</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">Amendment to and Extension of our Executive Management Incentive Plan</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">FOR</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">16</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>PROPOSAL 1 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Election of Directors (page 6) </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Each director nominee is up for election for a
two year term. Each director nominee is a current director and attended at least 75% of all meetings of the Board and on all Board committees on which he sits. </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


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<TD WIDTH="62%"></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Name</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Age</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Director&nbsp;Since</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Independent</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>AC</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>CC</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>NGC</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>LC</B></FONT></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Steven J. Hilton</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">52</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">1997</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">No</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Raymond Oppel</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">57</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">1997</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">Yes</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center">


<IMG SRC="g680825g46p38.jpg" ALT="LOGO">
&nbsp;</TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center">


<IMG SRC="g680825g93k90.jpg" ALT="LOGO">
&nbsp;</TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center">


<IMG SRC="g680825g46p38.jpg" ALT="LOGO">
&nbsp;</TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center">


<IMG SRC="g680825g46p38.jpg" ALT="LOGO">
&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Richard T. Burke, Sr.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">70</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">2004</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">Yes</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center">


<IMG SRC="g680825g46p38.jpg" ALT="LOGO">
&nbsp;</TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center">


<IMG SRC="g680825g46p38.jpg" ALT="LOGO">
&nbsp;</TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center">


<IMG SRC="g680825g46p38.jpg" ALT="LOGO">
&nbsp;</TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Dana C. Bradford</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">49</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">2009</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">Yes</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000">


<IMG SRC="g680825g46p38.jpg" ALT="LOGO">
&nbsp;</TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000">


<IMG SRC="g680825g46p38.jpg" ALT="LOGO">
&nbsp;</TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000">


<IMG SRC="g680825g46p38.jpg" ALT="LOGO">
&nbsp;</TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000">


<IMG SRC="g680825g46p38.jpg" ALT="LOGO">
&nbsp;</TD></TR>
</TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="1%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="14%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="72%"></TD></TR>


<TR>
<TD VALIGN="top"> <P ALIGN="justify">


<IMG SRC="g680825g93k90.jpg" ALT="LOGO">
</P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">=</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Chair</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>AC</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Audit Committee</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I></I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1"></FONT></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">=</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Member</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>CC</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Executive Compensation Committee</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>NGC</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Nominating/Governance Committee</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>LC</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Land Committee</FONT></P></TD></TR>
</TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">3</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


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<TD WIDTH="15%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="9%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="24%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="24%"></TD>
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<TD WIDTH="24%"></TD></TR>
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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;PROXY&nbsp;SUMMARY&nbsp;&nbsp;</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR></TABLE> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>PROPOSAL 2 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Ratification of Auditor (page 7) </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Ratify the selection of Deloitte&nbsp;&amp; Touche LLP as the Company&#146;s independent registered public accounting firm for the 2014 fiscal year.
</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000">&nbsp;<FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000;border-bottom:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Summary of Fees</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000">&nbsp;<FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>2013</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>2012</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Audit fees</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,049,800</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,142,300</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Audit-related fees</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Tax fees</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">All other fees</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"> <P STYLE="border-top:1px solid #000000">&nbsp;</P></TD>
<TD VALIGN="bottom"> <P STYLE="border-top:1px solid #000000">&nbsp;</P></TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"> <P STYLE="border-top:1px solid #000000">&nbsp;</P></TD>
<TD VALIGN="bottom"> <P STYLE="border-top:1px solid #000000">&nbsp;</P></TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Total fees</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,049,800</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,142,300</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>PROPOSAL 3 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Advisory Vote to Approve Compensation of our Named Executive Officers (page 8) </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Stockholders will be given the opportunity to vote on an advisory resolution to approve the compensation of our Named Executive Officers
(&#147;NEOs&#148;) (commonly referred to as &#147;Say on Pay&#148;). </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Our executive compensation program is designed to drive and reward
superior corporate performance, both annually and over the long-term. The Board believes the Company&#146;s compensation policies and practices are effective in achieving the Company&#146;s goals of paying for performance and aligning the NEO&#146;s
long-term interests with those of our stockholders. Compensation elements for our NEOs include: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


<TR>
<TD WIDTH="3%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="20%"></TD>
<TD VALIGN="bottom" WIDTH="8%"></TD>
<TD WIDTH="65%"></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Type</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Form</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Terms</B></FONT></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Cash</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:ARIAL" SIZE="1">Base Salary</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:ARIAL" SIZE="1">Competitively market-based</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Cash</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:ARIAL" SIZE="1">Annual&nbsp;Incentive&nbsp;Compensation</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:ARIAL" SIZE="1">Based on performance measurements</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Cash</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:ARIAL" SIZE="1">Discretionary Bonuses</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:ARIAL" SIZE="1">Based on specific achievements of each individual beyond those of the performance measurements included in the annual incentive compensation calculations subject to approval by Executive
Compensation Committee; no discretionary bonuses were paid in 2013</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Equity</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:ARIAL" SIZE="1">Long-term Incentive Awards</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:ARIAL" SIZE="1">Equity awards have a three-year service or performance period, with 50% of the total awards contingent upon the achievement of specified performance criteria</FONT></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Other</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">Limited perquisites</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">Primarily auto allowance and the reimbursement of certain life and disability (or equivalent) policies for the benefit of NEOs and their
families</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>PROPOSAL 4 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Amended and Restated 2006 Stock Incentive Plan (page 10) </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Stockholders will be
given the opportunity to approve the Amended and Restated 2006 Stock Incentive Plan that includes an expansion to the performance criteria, an increase to the number of shares available from 3,050,000 to 4,150,000 and the extension of the plan to
2019. </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


<TR>
<TD WIDTH="91%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD></TR>


<TR>
<TD VALIGN="top" STYLE="BORDER-TOP:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Shares available as of March&nbsp;20, 2014</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">432,000</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Proposed increase</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,100,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"> <P STYLE="border-top:1px solid #000000">&nbsp;</P></TD>
<TD VALIGN="bottom"> <P STYLE="border-top:1px solid #000000">&nbsp;</P></TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Proposed shares remaining available for grant</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,532,000</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>PROPOSAL 5 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Amendment to and Extension of our Executive Management Incentive Plan (page 16) </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Stockholders will be given the opportunity to approve the expanded performance criteria to the Executive Management Incentive Plan and the extension
of the termination date of the Executive Management Incentive Plan to 2019. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">4</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <DIV ALIGN="right">
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<TD WIDTH="24%"></TD>
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<TD WIDTH="15%"></TD></TR>
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<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom" BGCOLOR="#32406b"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;PROXY&nbsp;SUMMARY&nbsp;&nbsp;</B></FONT></TD></TR></TABLE></DIV> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>Other Matters </B></FONT></P> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The management and Board of Directors of the Company know of no other matters to be brought before the meeting. If other matters are properly
presented to the stockholders for action at the meeting or any adjournments or postponements thereof, it is the intention of the proxy holders named in this proxy to vote in their discretion on all matters on which the shares of common stock
represented by such proxy are entitled to vote. The entire cost of this solicitation of proxies will be borne by the Company, including expenses incurred in connection with preparing, assembling and mailing the Notice. The Company may reimburse
brokers or persons holding stock in their names or in the names of their nominees for their expenses in sending the proxy materials to beneficial owners who request paper copies. Certain officers, directors and regular employees of the Company, who
will receive no extra compensation for their services, may solicit proxies by mail, telephone, facsimile, email or personally. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>Notice of Internet
Availability of Proxy Materials </B></FONT></P> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">On or about April&nbsp;1, 2014, the Notice of Internet Availability of Proxy Materials (&#147;The Notice&#148;) was mailed to stockholders of record as of the close of business on March&nbsp;20, 2014 (the
&#147;record date&#148;) and this proxy and the related materials were made available on our website. We are furnishing our proxy materials to our stockholders on the Internet in lieu of mailing a printed copy of our proxy materials to each
stockholder of record. You will not receive a printed copy of our proxy materials unless you request one. The Notice instructs you as to how you may access and review on the Internet all of the important information contained in the proxy materials,
or request a printed copy of those materials. The Notice also instructs you as to how you may vote your proxy. </FONT></P> <P STYLE="margin-top:10px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>Company Information </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The following information should be
reviewed along with the audited consolidated financial statements, notes to consolidated financial statements, report of independent registered public accounting firm and other information included in our 2013 Annual Report to Stockholders that is
available on our website at<I> investors.meritagehomes.com. </I> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Information about Meritage is provided on our Internet website at
www.meritagehomes.com. Our periodic and current reports, including any amendments, filed or furnished pursuant to section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the &#147;Exchange Act&#148;) are available, free of charge, on our
website as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission (&#147;SEC&#148;). The information contained on our website is not considered part of our Exchange Act reports
or this proxy statement. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>Corporate Governance </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">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 the following governance committees: <B><I></I></B> </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2">&#151;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Audit Committee </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2">&#151;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Executive Compensation Committee </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2">&#151;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Nominating/Governance Committee </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">The charter of each of these committees is available on our website, along with our Code of Ethics, Corporate Governance Principles and Practices and Securities Trading Policy. Our committee charters, Code of
Ethics, Securities Trading Policy and Corporate Governance Principles and Practices are also available in print, free of charge, to any stockholder who requests them by calling us or by writing to us at our principal executive offices at the address
listed above, Attention: Secretary. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">5</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


<p Style='page-break-before:always'>
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<h5 align="left"><a href="#toc">Table of Contents</a></h5>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;PROPOSAL&nbsp;1:&nbsp;ELECTION&nbsp;OF&nbsp;DIRECTORS&nbsp;&nbsp;</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
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<TD VALIGN="top"></TD></TR></TABLE> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="6" COLOR="#32406b"><B><A NAME="toc680825_4"></A>Election of Directors </B></FONT></P> <P STYLE="margin-top:4px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="4" COLOR="#32406b"><B>(Proposal No.&nbsp;1) </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Our Board of Directors currently has eight members. The
directors are divided into two classes serving staggered two-year terms. This year, our Class I Directors are up for election. The Board, upon the recommendation of the Nominating/Governance Committee, has nominated for re-election Steven J. Hilton,
Raymond Oppel, Richard T. Burke Sr. and Dana C. Bradford, each of whom are presently serving as Class I Directors. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Biographical
information for each of our director nominees is set forth beginning on page 21. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">All nominees have consented to serve as directors. The
Board of Directors has no reason to believe that any of the nominees will be unable to act as a director. However, should a nominee become unable to serve or should a vacancy on the Board occur before the annual meeting, the Board may either reduce
its size or designate a substitute nominee. If a substitute nominee is named, your shares will be voted for the election of the substitute nominee designated by the Board. In the vote on the election of the director nominees, stockholders may:
</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">vote<B> FOR</B> all nominees; </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><B>WITHHOLD</B> votes for all nominees; or </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><B>WITHHOLD</B> votes as to specific nominees. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">Unless you elect to vote differently by so indicating on your signed proxy, your shares will be voted <B>FOR</B> the Board&#146;s nominees. If a quorum is present, the four Class I nominees who receive the most
votes will be elected. Broker non-votes and votes that are withheld will not count as either votes for or against the nominee. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><B>THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE &#147;FOR&#148; THE ELECTION OF THE ABOVE-NAMED NOMINEES AS DIRECTORS. </B></FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">6</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


<p Style='page-break-before:always'>
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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <DIV ALIGN="right">
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<TD WIDTH="6%"></TD>
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<TD WIDTH="69%"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="bottom" BGCOLOR="#32406b"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;PROPOSAL&nbsp;2:&nbsp;RATIFICATION&nbsp;OF&nbsp;INDEPENDENT&nbsp;REGISTERED&nbsp;PUBLIC&nbsp;ACCOUNTING&nbsp;FIRM&nbsp;
&nbsp;</B></FONT></TD></TR></TABLE></DIV> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="6" COLOR="#32406b"><B><A NAME="toc680825_5"></A>Ratification of Independent Registered Public Accounting Firm </B></FONT></P> <P STYLE="margin-top:4px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="4" COLOR="#32406b"><B>(Proposal No.&nbsp;2) </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Board of Directors seeks an indication from
stockholders of their approval or disapproval of the Audit Committee&#146;s appointment of Deloitte&nbsp;&amp; Touche LLP as our independent registered public accounting firm for 2014. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Deloitte&nbsp;&amp; Touche LLP was appointed our auditor in 2005 and no relationship exists other than the usual relationship between auditors and
clients. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">If a quorum is present, an affirmative vote of the majority of the votes cast at the annual meeting is required to ratify the
selection of Deloitte&nbsp;&amp; Touche LLP as the Company&#146;s independent auditor. Abstentions will not be counted either for or against this proposal. If the appointment of Deloitte&nbsp;&amp; Touche LLP as auditors for 2014 is not approved by
stockholders, the adverse vote will be considered a direction to the Audit Committee to consider other auditors for next year. However, because of the difficulty in making any substitution of auditors after the beginning of the current year, the
appointment in 2014 will stand, unless the Audit Committee determines there is a reason for making a change. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><B>THE BOARD OF DIRECTORS
HAS APPROVED THIS PROPOSAL NO. 2 AND UNANIMOUSLY RECOMMENDS A VOTE &#147;FOR&#148; PROPOSAL NO. 2. </B></FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">7</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


<p Style='page-break-before:always'>
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<h5 align="left"><a href="#toc">Table of Contents</a></h5>


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<TD WIDTH="78%"></TD>
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<TD WIDTH="9%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="3%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="3%"></TD>
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<TD WIDTH="3%"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;PROPOSAL&nbsp;3:&nbsp;ADVISORY&nbsp;VOTE&nbsp;TO&nbsp;APPROVE&nbsp;COMPENSATION&nbsp;OF&nbsp;OUR&nbsp;NAMED&nbsp;
EXECUTIVE&nbsp;OFFICERS&nbsp;&nbsp;</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR></TABLE> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="6" COLOR="#32406b"><B><A NAME="toc680825_6"></A>Advisory Vote to Approve Compensation of our Named Executive Officers </B></FONT></P>
<P STYLE="margin-top:4px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4" COLOR="#32406b"><B>(Proposal No.&nbsp;3) </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Stockholders will be given the opportunity to vote on the following advisory resolution (commonly referred to as &#147;Say on Pay&#148;):
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><B>RESOLVED</B>, that compensation paid to the Company&#146;s named executive officers, as disclosed herein pursuant to Item&nbsp;402 of
Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion is hereby APPROVED. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B><A NAME="toc680825_7">
</A>Background on Proposal </B></FONT></P> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">In accordance with the Dodd-Frank Act and related SEC rules, stockholders are being given the opportunity to vote at the annual meeting on this
advisory resolution regarding the compensation of our NEOs. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">At our 2013 Annual Meeting of Stockholders, the Company&#146;s stockholders
approved the compensation of our NEOs (on an advisory basis) by 99.7% of total votes cast. We believe this high approval rating indicated that our stockholders were in agreement with our Executive Compensation Committee and its direction of setting
compensation arrangements based on criterion that are in line with the goals of our stockholders and at levels that are realizable in relation to the Company&#146;s performance and size. In addition, at our 2011 Annual Meeting of Stockholders, the
stockholders indicated, on an advisory vote basis, that they preferred that we hold Say on Pay votes on an annual basis (a frequency vote is required to be held at least once every six years).&nbsp;In light of these results, the Company&#146;s Board
of Directors has decided to hold its future advisory votes on the compensation of named executive officers annually until the next frequency vote, which will be held on or before our 2017 Annual Meeting.&nbsp;This Proposal No.&nbsp;3 represents this
year&#146;s Say on Pay vote. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">For a comprehensive description of our executive compensation program, philosophy and objectives, including
the specific elements of executive compensation that comprised the program in 2013, please refer to the Compensation Discussion and Analysis section of this proxy statement. The Summary Compensation Table and other executive compensation tables (and
accompanying narrative disclosures) that follow it, beginning at page&nbsp;44, provide additional information about the compensation that we paid to our NEOs in 2013. As described in the Compensation Discussion and Analysis, our executive
compensation program is designed to drive and reward superior performance both annually and over the long term while simultaneously striving to be externally competitive. During 2013, through the combined efforts of our NEOs, Meritage was successful
in achieving the following accomplishments: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><I>Generated year-over-year increases in most of our key operating metrics including the following (dollars in thousands):</I> </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="76%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


<TR>
<TD WIDTH="60%"></TD>
<TD VALIGN="bottom" WIDTH="7%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="7%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000">&nbsp;<FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>2013</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>2012</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>%&nbsp;Increase</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Home Closing Units</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">5,259</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">4,238</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">24.1</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#d8d8d8">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Home Closing Revenue</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,783,389</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,184,360</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">50.6</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Home Order Units</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">5,615</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">4,795</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">17.1</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#d8d8d8">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Home Order Value</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,982,303</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,414,772</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">40.1</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Backlog Units</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,853</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,472</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">25.9</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#d8d8d8">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Backlog Value</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">686,672</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">479,266</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">43.3</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Pre-Tax Income</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">177,672</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">28,854</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">515.8</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#d8d8d8">
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Diluted Earnings Per Share*</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">3.25</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">3.00</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">8.3</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="12"> <P STYLE="margin-left:2.00em; text-indent:-2.00em" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2012 net earnings included a $76.3 million tax benefit, primarily
due to the reversal of valuation reserves related to deferred tax assets.</FONT></P></TD>
<TD VALIGN="top"> <P STYLE="margin-left:2.00em; text-indent:-2.00em" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P></TD></TR>
</TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><I>Entry into new markets&#151;</I>In 2013, we reported our first full year of results in the Charlotte, North Carolina market (operations there commenced in
the fourth quarter of 2012) and in August 2013, we completed our first acquisition since 2005, entering the Nashville, Tennessee market. Operations in the Nashville division for 2013 provided 22 closings with $7.9 million in associated revenue and
contributed 37 orders valued at $10.9 million during its four months of operations. </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">8</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


<p Style='page-break-before:always'>
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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <DIV ALIGN="right">
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<TD WIDTH="9%"></TD>
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<TD WIDTH="3%"></TD>
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<TD WIDTH="3%"></TD>
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<TD WIDTH="78%"></TD></TR>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="bottom" BGCOLOR="#32406b"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;PROPOSAL&nbsp;3:&nbsp;ADVISORY&nbsp;VOTE&nbsp;TO&nbsp;APPROVE&nbsp;COMPENSATION&nbsp;OF&nbsp;OUR&nbsp;NAMED&nbsp;
EXECUTIVE&nbsp;OFFICERS&nbsp;&nbsp;</B></FONT></TD></TR></TABLE></DIV> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><I>Capital transactions&#151;</I>In March 2013, we concurrently issued $175 million of 4.50% senior notes due 2018 and redeemed all of our $99.8 million
senior subordinated notes due 2017, extending our earliest debt maturities to 2018. During the fourth quarter of 2013, we also completed a $100 million add-on debt issuance to our existing 7.15% senior notes due 2020. In addition, we increased the
capacity of our unsecured revolving credit facility to $200 million during the fourth quarter of 2013 to provide additional liquidity. Finally, in the first quarter of 2014 we further strengthened our balance sheet by raising $110.5 million, net of
offering costs, in a public equity offering. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Executive Compensation Committee continually evaluates the
compensation packages for our NEOs and adjusts them as conditions warrant, including setting performance targets for both cash and equity awards, some of which have been forfeited in the past in cases where targets were not met. In connection with
these reviews, the Company has over the last several years implemented prudent and responsible compensation policies in the stockholders&#146; interest, some of which include: </FONT></P>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Perquisites are limited to auto allowances and reimbursement of certain life and disability or long-term care insurance premiums, and limited other benefits
as discussed on page 35. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">NEOs must comply with security ownership requirements, as discussed on page 36. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Incentive compensation is balanced between cash and equity awards, as discussed beginning on page 32. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Each employment agreement of our NEOs includes a provision for the clawback (or offset) of incentive bonuses to the extent any financial results are misstated
as the result of the NEO&#146;s willful misconduct or gross negligence. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B><A NAME="toc680825_8"></A>Effects of Advisory Vote
</B></FONT></P> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Because the vote on this
proposal is advisory in nature, it will not affect any compensation already paid or awarded to our NEOs and will not be binding on the Board of Directors or the Compensation Committee. However, the Compensation Committee will consider the outcome of
the vote when making future executive compensation decisions. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">If a quorum is present an affirmative vote of a majority of the votes cast
at the annual meeting is required to approve this advisory vote. Broker non-votes and abstentions have no effect on the result of the vote. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2"><B>THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE &#147;FOR&#148; APPROVAL OF THE RESOLUTION SET FORTH ABOVE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS </B></FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">9</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<h5 align="left"><a href="#toc">Table of Contents</a></h5>


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<TD WIDTH="9%"></TD>
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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;PROPOSAL&nbsp;4:&nbsp;AMENDED&nbsp;AND&nbsp;RESTATED&nbsp;2006&nbsp;STOCK&nbsp;INCENTIVE&nbsp;PLAN&nbsp;&nbsp;
</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="top"></TD></TR></TABLE> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="6" COLOR="#32406b"><B><A NAME="toc680825_9"></A>Amended and Restated 2006 Stock Incentive Plan </B></FONT></P> <P STYLE="margin-top:4px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="4" COLOR="#32406b"><B>(Proposal No.&nbsp;4) </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">On March&nbsp;24, 2014, our Board of Directors adopted
the Meritage Homes Corporation Amended and Restated 2006 Stock Incentive Plan (the &#147;Amended Stock Plan&#148;), subject to stockholder approval. The Amended Stock Plan represents the amendment and restatement of the Meritage Homes Corporation
2006 Stock Incentive Plan (the &#147;Current Plan&#148;).&nbsp;Key differences from the Current Plan that are reflected in the Amended Stock Plan include the following: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>

<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">An increase in the number of shares available under the plan by 1,100,000 shares to 4,150,000.&nbsp;As of March&nbsp;20, 2014, there are currently 432,112
shares available for grant under the Current Plan.&nbsp;Based on current grant and cancellation/forfeiture rates, we believe the proposed share increase should be sufficient for grants through approximately 2017. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">An expansion of the performance criteria associated with performance-based awards that may be granted from time to time to qualify as &#147;performance-based
compensation&#148; pursuant to Section&nbsp;162(m) of the Internal Revenue Code.</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">An extension of the termination date of the plan to May&nbsp;13, 2019.</FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Board also has determined that in certain instances a participant should be entitled to receive an award based on the Company&#146;s achievement of
performance goals after the participant has terminated employment.&nbsp;The Amended Stock Plan permits an award agreement to provide for accelerated vesting in limited circumstances including upon death, disability, retirement, voluntary termination
for good reason or termination by the Company without cause. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Amended Stock Plan permits the payment of an award due to a participant&#146;s death, disability or change of control, regardless of the achievement of
the performance goals, if permitted by the award agreement. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">In addition, we recently amended the Current Stock Plan
to allow for other administrative changes to the Plan as management deemed necessary or appropriate to make the Plan consistent with the employment agreements the Company recently negotiated with our NEOs, primarily to allow for the award of
restricted stock units. These amendments were effective upon adoption by the Board of Directors and were reported by the Company on Form 8-K filed on February&nbsp;18, 2014. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">Certain material features of the Amended Stock Plan are discussed below, however, the description is subject to, and qualified by the full text of the plan attached as <I>Appendix A</I>. The closing price for our
common stock on March&nbsp;20, 2014, as reported on the NYSE, was $41.83 per share. We anticipate filing a Form S-8 registration statement with the SEC shortly after the annual meeting to register the additional shares approved by this proposal.
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Board believes the Amended Stock Plan promotes success and enhances our value because it ties the personal interests of the
participants to those of stockholders and provides the participants with an incentive for outstanding performance. In reaching our conclusion as to the appropriateness of the additional share proposal, we reviewed key metrics that are typically used
to evaluate such proposals. Many investors use a burn rate calculation in order to quantify how quickly a company uses its shareholder capital. Meritage has a three-year burn rate of 2.48%, well below the threshold set by a major proxy advisory firm
for our industry (consumer durables and apparel) of 4.28%. This burn rate assumes a 2.0x weighting for restricted stock grants. Our unweighted burn rate is 1.24%. Further, our burn rate has steadily decreased over the last three years included in
the calculation. Additionally, many investors look at voting power dilution to see the effect that shares will have on dilution. Full voting power dilution of all outstanding awards and authorized shares, including the 1,100,000 additional shares
added under the Amended Stock Plan as of December&nbsp;31, 2013, would yield a 7.83% dilution for Meritage, which is well below our industry median. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>Administration </B></FONT></P> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Amended Stock Plan will be administered by the Executive Compensation Committee (the &#147;Compensation Committee&#148;) of the Board of
Directors. The Compensation Committee has the authority to interpret and administer the Amended Stock Plan in order to carry out the purposes of the Amended Stock Plan.&nbsp;The Compensation Committee has the authority to determine those persons
eligible to receive Awards, the number of shares subject to an award and to establish and interpret the terms and conditions of any Awards.&nbsp;The Compensation Committee may&nbsp;also make exceptions to the provisions of any Awards.&nbsp;All
determinations of the Compensation Committee are final and binding. </FONT></P>
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STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">10</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;PROPOSAL&nbsp;4:&nbsp;AMENDED&nbsp;AND&nbsp;RESTATED&nbsp;2006&nbsp;STOCK&nbsp;INCENTIVE&nbsp;PLAN&nbsp;&nbsp;
</B></FONT></TD></TR></TABLE></DIV> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>Eligibility </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Awards may be made to any officer, employee
or executive of the Company, as well as to non-employee directors and consultants or advisors to the Company.&nbsp;As of December&nbsp;31, 2013, there were seven non-employee directors and approximately 165 officers and employees of the Company and
its subsidiaries eligible to participate in the Current Stock Plan. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>Types of Awards </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Amended Stock Plan provides for grants
of stock options, stock appreciation rights, restricted stock, performance shares, performance-based awards and restricted stock units (each, an &#147;Award&#148;), whether granted alone or in combination, pursuant to which shares of common stock,
cash or a combination thereof may be delivered to the Award recipient; provided that stock appreciation rights, stock options, restricted stock units and restricted stock awards will be paid only in shares. Under the Amended Stock Plan, the total
number of shares of common stock available for future Awards is reduced by one share for each share issued in connection with an option or a stock appreciation right and by 1.38 shares for each share issued in connection with any other type of
Award. The types of awards authorized include: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><I>Options.</I> An option is the right to purchase shares of common stock at a future
date at a specified exercise price.&nbsp;The Compensation Committee may grant both nonqualified stock options and incentive stock options under the Amended Stock Plan.&nbsp;The per share exercise price will be determined by the Compensation
Committee, but must be at least equal to the fair market value of the underlying shares of common stock on the date of grant.&nbsp;The Compensation Committee determines the date after which options may be exercised in whole or in part and the
expiration date of each option, which cannot be more than 10 years from the date of grant.&nbsp;However, in the case of an incentive stock option granted to a participant who holds more than 10% of the voting power of the Company, the exercise price
must be at least 110% of the fair market value of the underlying shares of common stock on the date of grant and the expiration date cannot be more than five years from the date of grant.&nbsp;The exercise price of an option may be paid in shares of
common stock, cash or a combination thereof, as determined by the Compensation Committee, including an irrevocable commitment by a broker to pay the exercise price from the proceeds of a sale of shares issuable under the option, the delivery of
previously owned shares or withholding of shares deliverable upon exercise.&nbsp;Options cannot, without stockholder approval, be repriced, cancelled and regranted at a lower exercise price, or repurchased for cash, other than in connection with a
change in the Company&#146;s capitalization. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><I>Stock Appreciation Rights.</I> A stock appreciation right is a right granted to the
participant to receive, in shares of common stock, an amount equal to the appreciation of one share of common stock from the date of grant.<I>&nbsp;</I> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2"><I>Restricted Stock Awards.</I> Awards of shares of stock may be granted under the Amended Stock Plan, although the shares are generally subject to a risk of forfeiture or to other conditions or restrictions for
specified periods of time.&nbsp;The Compensation Committee does not typically issue a stock certificate representing a restricted stock award until the restrictions applicable to all or part of the award have lapsed, and the Compensation Committee
has discretion to waive in whole or in part restrictions or forfeiture conditions relating to the restricted stock award. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><I>Performance
Share Awards.</I> Performance share awards are rights to receive, in cash, shares of common stock or a combination thereof, an amount equal to the value of common stock if certain performance goals are attained. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><I>Performance-Based Awards.</I> The purpose of performance-based awards is to qualify restricted stock, restricted stock units or performance share
awards as &#147;performance-based compensation&#148; pursuant to Section&nbsp;162(m)&nbsp;of the Internal Revenue Code of 1986, as amended (the &#147;Code&#148;).&nbsp;Section&nbsp;162(m)&nbsp;of the Code limits the Company&#146;s federal income tax
deduction for compensation paid to any of the executive officers named in the summary compensation table of its annual proxy statement.&nbsp;The limit is $1&nbsp;million per officer per year, with certain exceptions.&nbsp;However, the deductibility
limit does not apply to &#147;performance-based compensation&#148; if the qualifying performance criteria and maximum amounts payable upon the satisfaction of performance goals are approved in advance by the Company&#146;s
stockholders.&nbsp;Stockholders previously approved the qualifying performance criteria and maximum amounts payable under the Current Stock Plan for purposes of Section&nbsp;162(m)&nbsp;of the Code at the Company&#146;s annual meeting of
stockholders in 2010 and this approval is valid until 2015. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><I>Restricted Stock Units.</I> The right granted to the participant to
receive in the future a specified number of shares of common stock in the future, at no monetary cost to the participant, the payment of which is subject to certain restrictions and the risk of forfeiture as determined by the Compensation Committee.
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Notwithstanding the satisfaction of the performance criteria, the amount paid under an Award may be reduced by the Compensation
Committee on the basis of such further considerations as the Compensation Committee in its sole discretion may determine. </FONT></P>
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HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
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STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">11</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;PROPOSAL&nbsp;4:&nbsp;AMENDED&nbsp;AND&nbsp;RESTATED&nbsp;2006&nbsp;STOCK&nbsp;INCENTIVE&nbsp;PLAN&nbsp;&nbsp;
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<TD VALIGN="top"></TD></TR></TABLE> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="4"><B>Treatment of Awards Upon Termination of Employment and Change of Control </B></FONT></P> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Amended Stock Plan provides that if a change of control occurs and Awards are converted, assumed, or replaced by a successor, the Compensation
Committee has the discretion to cause all outstanding Awards to become fully exercisable and all restrictions on outstanding Awards to lapse.&nbsp;If a change of control occurs and the Awards are not converted, assumed, or replaced by a successor,
all outstanding Awards shall automatically become fully exercisable and all restrictions on outstanding Awards shall lapse. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Amended
Stock Plan also permits an award agreement or employment agreement to provide for accelerated vesting upon death, disability, change of control, retirement, termination for good reason or termination by the Company without cause. For performance
share awards, the awards remain subject to the achievement of the performance goals for the performance criteria if the participant&#146;s termination is by the Company without cause or by the participant for good reason or due to retirement. Upon a
change of control, death or disability, the participant may be entitled to an award to the extent provided by the applicable change of control agreement or award agreement. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="4"><B>Amendment to or Termination of the Amended Stock Plan </B></FONT></P> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Compensation Committee, with the Board&#146;s approval, may amend, alter or discontinue the Amended Stock Plan.&nbsp;However, other than in
connection with a change in the Company&#146;s capitalization, no amendment may be made without stockholder approval if such amendment would: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">increase the maximum number of shares of common stock for which Awards may be granted under the Amended Stock Plan; </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">permit the Compensation Committee to grant options with an exercise price that is below the fair market value of a share of common stock on the date of grant;
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">permit the Compensation Committee to extend the exercise period for an option beyond 10 years from the date of grant; </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">permit the Compensation Committee to reprice previously-granted options; or </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">require stockholder approval under any laws, regulation or stock exchange rule. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="4"><B>Duration of the Plan </B></FONT></P> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">The Current Stock Plan by its terms terminates on May&nbsp;16, 2016. The Amended Stock Plan being submitted for stockholder approval at the 2014 Annual Meeting of Stockholders extends the termination date to
May&nbsp;13, 2019. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>U.S. Federal Tax Consequences </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The following is only a summary of the
consequences of U.S. federal income taxation to the participant and the Company with respect to the grant and exercise of options under the Amended Stock Plan.&nbsp;The summary is not complete, does not discuss the income tax laws of any state or
foreign country in which a participant may&nbsp;reside, and is subject to change. Participants in the Amended Stock Plan should consult their own tax advisors regarding the specific tax consequences to them of participating in and receiving options
under the Amended Stock Plan. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><I>Nonqualified Stock Options and Stock Appreciation Rights</I>. Generally, a participant will not
recognize income upon the grant of a nonqualified stock option or a stock appreciation right; instead, the holder of a nonqualified stock option or a stock appreciation right will recognize ordinary income at the time of exercise in an amount equal
to the excess of the fair market value of the common stock at the time of exercise over the exercise price.&nbsp;On a subsequent sale of the shares of common stock received upon exercise, the difference between the net proceeds of sale and the fair
market value of the shares on the date of exercise will generally be taxed as capital gain or loss (long-term or short-term, depending on the holding period). </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2"><I>Incentive Stock Options.</I> A participant will not recognize income upon the grant of an incentive stock option.&nbsp;In addition, a participant will not recognize income upon the exercise of an incentive stock
option if the participant satisfied certain employment and holding period requirements.&nbsp;To satisfy the employment requirement, a participant must exercise the option not later than three months after he or she ceases to be an employee of the
Company or any of its subsidiaries (or later than one year if he or she is disabled), unless he or she has died.&nbsp;To satisfy the holding period requirement, a participant must hold the stock acquired upon exercise of the incentive stock option
more than two years from the date of grant of the stock option and more than one year after the transfer of the shares of common stock to him or her.&nbsp;If these requirements are satisfied the participant will on the sale of such stock be taxed on
any gain, measured by the difference between the option price and the net proceeds of sale, generally at long-term capital gains rates. </FONT></P>
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STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;PROPOSAL&nbsp;4:&nbsp;AMENDED&nbsp;AND&nbsp;RESTATED&nbsp;2006&nbsp;STOCK&nbsp;INCENTIVE&nbsp;PLAN&nbsp;&nbsp;
</B></FONT></TD></TR></TABLE></DIV> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">If shares of common stock acquired
upon the timely exercise of an incentive stock option are sold, exchanged, or otherwise disposed of without satisfying the holding period requirements (a &#147;disqualifying disposition&#148;), the participant will, in the usual case, recognize
(i)&nbsp;capital gain in an amount equal to the excess, if any, of the sales price over the fair market value of the shares on the date of exercise; (ii)&nbsp;ordinary income in an amount equal to the excess, if any, of the lesser of the sales price
or the fair market value of the shares on the date of exercise over the option exercise price of the option; and (iii)&nbsp;capital loss equal to the excess, if any, of the option price over the sales price. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Individuals are subject to an &#147;alternative minimum tax&#148; based upon an expanded tax base to the extent such tax exceeds the regular tax
liability.&nbsp;The amount by which the fair market value of the shares acquired upon exercise of an incentive stock option exceeds the exercise price will be included as a positive adjustment in the calculation of the employee&#146;s
&#147;alternative minimum taxable income&#148; in the year of exercise.&nbsp;The &#147;alternative minimum tax&#148; imposed on individual taxpayers is generally equal to the amount by which a specified percentage of the individual&#146;s
alternative minimum taxable income (reduced by certain exemption amounts) exceeds his or her regular income tax liability for the year. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Stock options otherwise qualifying as incentive stock options will be treated as nonqualified stock options to the extent that the aggregate fair
market value of stock with respect to which incentive stock options are exercisable for the first time by a participant during any calendar year (under all of the Company&#146;s plans) exceeds $100,000 based on the fair market value of the stock at
the date of grant. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><I>Withholding Taxes</I>. Generally, the Company will be required to withhold applicable taxes with respect to any
ordinary income recognized by a participant in connection with Awards granted under the Amended Stock Plan.&nbsp;The Compensation Committee may&nbsp;permit a participant to pay withholding taxes through the mandatory or elective sale of shares of
common stock, by electing to have the Company withhold a portion of the shares that would otherwise be issued upon exercise of an Award (based upon the minimum statutory withholding amount) or by tendering shares already owned by the participant for
more than six months. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">If certain awards fail to comply with Internal Revenue Code Section&nbsp;409A, a participant must include in
ordinary income all deferred compensation conferred by the award, pay interest from the date of the deferral and pay an additional 20% tax. The award agreement for any award that is subject to Section&nbsp;409A&nbsp;may include provisions necessary
for compliance as determined by the Compensation Committee. The Company intends (but cannot and does not guarantee) that awards granted under the Amended Stock Plan will comply with the requirements of Section&nbsp;409A or an exception thereto and
intends to administer and interpret the Amended Stock Plan in such a manner. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Company will generally be entitled to a tax deduction
corresponding in amount and time to the participant&#146;s recognition of ordinary income in the circumstances described above, provided, among other things, that such deduction meets the test of reasonableness and is an ordinary and necessary
business expense.&nbsp;However, in connection with a change in control of the Company, and depending upon the terms and conditions of Awards granted under the Amended Stock Plan and upon the individual circumstances of the participants, certain
amounts with respect to Awards granted under the Amended Stock Plan may&nbsp;constitute &#147;excess parachute payments&#148; under the &#147;golden parachute&#148; provisions of Section&nbsp;280G of the Code.&nbsp;Under these provisions, a
participant will be subject to a 20% excise tax on any &#147;excess parachute payment&#148; and the Company will be denied any deduction with respect to such payment.&nbsp;In addition, in certain instances as a result of the application of
Section&nbsp;162(m) of the Code, the Company may&nbsp;be denied a compensation deduction for Awards grated to certain officers that do not qualify as &#147;performance-based compensation&#148; to the extent their aggregate compensation exceeds $1
million in a given year. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">13</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


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<TR>
<TD WIDTH="55%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="9%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="10%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="11%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="11%"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;PROPOSAL&nbsp;4:&nbsp;AMENDED&nbsp;AND&nbsp;RESTATED&nbsp;2006&nbsp;STOCK&nbsp;INCENTIVE&nbsp;PLAN&nbsp;&nbsp;
</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR></TABLE> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>Plan Benefits </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The following table sets forth grants of
restricted shares during 2013 made under the Current Stock Plan to (i)&nbsp;all our named executive officers, individually and as a group; (ii)&nbsp;all current directors and director nominees who are not executive officers, individually and as a
group; and (iii)&nbsp;all employees, including all current officers who are not executive officers, as a group.&nbsp;Grants under the Current Stock Plan are made at the discretion of the Board of Directors. </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


<TR>
<TD WIDTH="65%"></TD>
<TD VALIGN="bottom" WIDTH="10%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="6%"></TD>
<TD></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Individual or Group Name</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Number&nbsp;of&nbsp;Shares&nbsp;Subject<BR>to Options and Non-<BR>Vested Shares Granted<SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP></B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Weighted&nbsp;Average<BR>Exercise Price<BR>per<BR>Share<SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(2)</SUP></B></FONT></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Executive Officers</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:2.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Steven J. Hilton</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">50,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:2.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Larry W. Seay</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">25,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:2.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">C. Timothy White</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">25,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:2.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Steven M. Davis</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">25,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"> <P STYLE="border-top:1px solid #000000">&nbsp;</P></TD>
<TD VALIGN="bottom"> <P STYLE="border-top:1px solid #000000">&nbsp;</P></TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Executive Officer Group (four persons)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">125,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#eaebf0" STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"> <P STYLE="border-top:3px double #000000">&nbsp;</P></TD>
<TD VALIGN="bottom"> <P STYLE="border-top:3px double #000000">&nbsp;</P></TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Non-Executive Director Group</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:2.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Robert G. Sarver</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">6,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:2.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Raymond Oppel</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">6,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:2.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Peter L. Ax</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">6,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:2.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Richard T. Burke, Sr.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">6,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:2.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Gerald W. Haddock</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">6,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:2.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Dana Bradford</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">6,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:2.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Michael R. Odell</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">6,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#eaebf0" STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"> <P STYLE="border-top:1px solid #000000">&nbsp;</P></TD>
<TD VALIGN="bottom"> <P STYLE="border-top:1px solid #000000">&nbsp;</P></TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Non-Executive Director Group (seven persons)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">42,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"> <P STYLE="border-top:3px double #000000">&nbsp;</P></TD>
<TD VALIGN="bottom"> <P STYLE="border-top:3px double #000000">&nbsp;</P></TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Non-Executive Officer Employee Group (about 155 persons)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">251,295</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#eaebf0" STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"> <P STYLE="border-top:3px double #000000">&nbsp;</P></TD>
<TD VALIGN="bottom"> <P STYLE="border-top:3px double #000000">&nbsp;</P></TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000">&nbsp;</TD></TR>
</TABLE> <P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Balance includes performance share awards granted to our NEO&#146;s including those where the performance criteria has not yet been achieved. Does not include
shares granted on February&nbsp;12, 2014. Messrs. Hilton, Seay, White and Davis were granted 21,930, 9,868, 9,320 and 10,965 restricted stock units and 21,930, 9,868, 9,320 and 10,965 performance shares (at target levels), respectively. Also on
February 12, 2014, each non-Executive Director received a total grant of 6,000 restricted shares, and the non-executive employee group received a total grant of 261,200 restricted shares. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(2)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Weighted average exercise price per share is not applicable as no options were granted in 2013. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Board of Directors has reviewed the shares currently available under the Current Stock Plan and has determined that it is appropriate to
increase the maximum number of shares authorized for issuance under the proposed Amended Stock Plan.&nbsp;As of March&nbsp;20, 2014, (i)&nbsp;6,248,661 shares have been issued upon exercise of options or vesting of non-vested shares under the
Current Stock Plan, taking into account the 1.38 weighting factor for full value awards, (ii)&nbsp;option grants representing 204,490 shares were outstanding under the Current Stock Plan and (iii)&nbsp;1,155,371 shares of restricted stock had been
awarded under the Current Stock Plan and not otherwise forfeited, cancelled or vested.&nbsp;The total number of shares of common stock available for awards under the Current Stock Plan currently is 432,112, which the Board believes is inadequate for
the purpose of providing future equity incentives.&nbsp;The Board has determined that increasing the amount of shares of common stock issuable, as reflected under the Amended Stock Plan, is necessary in order to be able to grant additional equity
awards to continue to attract, retain and motivate key employees in the competitive homebuilding industry.&nbsp;As a result, the Board is asking the stockholders to approve the Amended Stock Plan that would increase the number of shares available
under the Current Plan by 1,100,000 shares to 4,150,000. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">14</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;PROPOSAL&nbsp;4:&nbsp;AMENDED&nbsp;AND&nbsp;RESTATED&nbsp;2006&nbsp;STOCK&nbsp;INCENTIVE&nbsp;PLAN&nbsp;&nbsp;
</B></FONT></TD></TR></TABLE></DIV> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>Performance Criteria </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Board has reviewed the performance
criteria under the Current Stock Plan and believes that the criteria should be reapproved and expanded. As proposed, the Amended Stock Plan allows for the Compensation Committee to select the following criteria for the purposes of establishing the
performance goal(s) for a participant for a performance period, any of which may be measured in absolute terms or as compared to any incremental increase or as compared to results of a peer group: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">pre- or after-tax net earnings, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">earnings before interest expense (including interest amortized to cost of sales) and income taxes (&#147;EBIT&#148;), </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">earnings before interest expense (including interest amortized to cost of sales), income taxes, depreciation and amortization, including, at the discretion of
the Compensation Committee, non-cash charges, impairments, and similar one-time, non-recurring or extraordinary charges (&#147;EBITDA&#148;), </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">revenue growth, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">operating income, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">operating cash flow, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">return on net assets, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">return on shareholders&#146; equity, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">return on assets, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">return on net assets, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">share price growth, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">shareholder returns, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">gross or net profit margin, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">earnings per share, </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">price per share, and </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">market share </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">operating expenses, including, without limitation, general and administrative expenses, </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">operational metrics, including but not limited to, number of sales, closings or backlog for a community, division or company-wide, community growth, specs per
community or time to construct a home, and </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">objective customer service or satisfaction ratings, whether measured internally or by an accepted third party. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Compensation Committee may provide that the performance criteria may include or exclude extraordinary charges, non-recurring or unusual items,
accounting charges or similar items. The Committee shall, within the time prescribed by Section&nbsp;162(m) of the Code, define in an objective fashion the manner of calculating the performance criteria it selects to use for such performance period
for the participants. Most of the above criteria are generally based on the Company&#146;s financial performance and metrics. The Board also believes that it is important to the Company&#146;s strategy and long-term success that Meritage have a
reputation for building quality homes and delivering excellent customer satisfaction. As such, the Board believes performance criteria based on key operational performance is important as well. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The affirmative vote of a majority of the votes cast on the proposal is required for approval to the Amended Stock Plan.&nbsp;For purposes of the
vote on this amendment, abstentions will have the same effect as votes against the proposal, and broker non-votes will not have any effect on the result of the vote. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2"><B>THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE &#147;FOR&#148; THE PROPOSAL TO APPROVE THE AMENDED AND RESTATED 2006 STOCK INCENTIVE PLAN AS DESCRIBED HEREIN. </B></FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">15</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;PROPOSAL&nbsp;5:&nbsp;AMENDMENT&nbsp;TO AND&nbsp;EXTENSION&nbsp;OF&nbsp;OUR&nbsp;EXECUTIVE MANAGEMENT
INCENTIVE&nbsp;PLAN&nbsp;&nbsp;</B></FONT></TD>
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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="6" COLOR="#32406b"><B><A NAME="toc680825_10"></A>Amendment to and Extension of our Executive Management Incentive Plan </B></FONT></P>
<P STYLE="margin-top:2px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4" COLOR="#32406b"><B>(Proposal No.&nbsp;5) </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">In
2006, our shareholders approved the Meritage Homes Corporation 2006 Executive Management Incentive Plan (the &#147;Incentive Plan&#148;), which also has been known as the 2006 Annual Incentive Plan. The Incentive Plan provides for annual incentive
awards to certain of the Company&#146;s key executives and was created in part to allow for awards under the Incentive Plan to be tax deductible for the Company. Section&nbsp;162(m) of the Code places a $1 million annual limit on the amount of
compensation paid to certain of the executive officers named in the Company&#146;s annual proxy statement that may be deducted by the Company for federal income tax purposes, unless such compensation is based on the achievement of pre-established
performance goal(s) set by the Compensation Committee pursuant to an incentive plan that has been approved by the Company&#146;s stockholders. Stockholder approval of the amendment is necessary for maintaining the tax-deductible status of incentive
payments made to the participants after 2015. If approved, the expanded performance criteria would be valid for performance-based compensation awards under Section&nbsp;162(m) of the Code through 2019. We have summarized below the key provisions of
the Incentive Plan. Because it is a summary, it may not contain all of the information that is important to you. The summary is qualified in its entirety by reference to the full text of the Incentive Plan, attached as <I>Appendix &#147;B&#148;</I>,
which includes the proposed amendments highlighted in bold. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>Purpose of the Plan </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Awards may be made under the Incentive Plan
to any employee of the Company with the title of Chief Executive Officer, Chief Financial Officer, or Executive Vice President or any employee who is a &#147;covered employee&#148; within the meaning of Section&nbsp;162(m) of the Code. A covered
employee under Section 162(m) includes Meritage&#146;s Chief Executive Officer, Chief Operating Officer and General Counsel. Non-employee directors are not eligible to receive an award under the Incentive Plan. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>Administration </B></FONT></P> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Incentive Plan is administered by the Compensation Committee or any other committee appointed by the Board of Directors, which consists of not
less than two non-employee directors who are &#147;outside directors&#148; within the meaning of Section&nbsp;162(m) of the Code. The Compensation Committee has full authority to interpret the Incentive Plan and to establish rules for its
administration. The Compensation Committee has the authority to determine eligibility for participation in the Incentive Plan, to decide all questions concerning eligibility for and the amount of awards, and to establish and administer the
performance goals (defined below) and certify whether, and to what extent, they are attained. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>Duration of the Plan </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Incentive Plan by its terms expires on
February&nbsp;14, 2015, five years after its re-approval in 2010, to comply with Section&nbsp;162(m) of the Internal Revenue Code. If approved, the amendment will extend the Incentive Plan&#146;s termination date to May 13, 2019. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>Determination of Awards </B></FONT></P> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">In determining awards to be made under the Incentive Plan, the Compensation Committee may approve a formula that is based on one or more objective
criteria to measure corporate performance as set forth in the Incentive Plan (&#147;Performance Criteria&#148;). The Compensation Committee may establish Performance Criteria and as selected by the Compensation Committee, the Compensation Committee
may set annual performance objectives (&#147;Performance Goals&#148;) with respect to such Performance Criteria for the Company that are both financial and operational in nature. The current performance criteria include the following, any of which
may be measured either in absolute terms, or as compared to any incremental increase, or as compared to results of a peer group: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">pre- or after-tax net earnings, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">earnings before interest expense (including interest amortized to cost of sales) and income taxes (&#147;EBIT&#148;), </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">earnings before interest expense (including interest amortized to cost of sales), income taxes, depreciation and amortization, including, at the discretion of
the Compensation Committee, non-cash charges, impairments, and similar one-time, non-recurring or extraordinary charges (&#147;EBITDA&#148;), </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">16</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;PROPOSAL&nbsp;5:&nbsp;AMENDMENT&nbsp;TO AND&nbsp;EXTENSION&nbsp;OF&nbsp;OUR&nbsp;EXECUTIVE MANAGEMENT
INCENTIVE&nbsp;PLAN&nbsp;&nbsp;</B></FONT></TD></TR></TABLE></DIV> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">revenue growth, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">operating income, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">operating cash flow, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">return on net assets, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">return on shareholders&#146; equity, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">return on assets, </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">return on capital, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">share price growth, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">shareholder returns, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">gross or net profit margin, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">earnings per share, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">price per share, and </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">operating expenses, including, without limitation, general and administrative expenses, </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">operational metrics, including but not limited to, number of sales, closings and backlog for a community, division or company-wide, community growth, specs
per community or time to construct a home, and </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">objective customer service or satisfaction ratings, whether measured internally or by an accepted third party. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Compensation Committee may provide that the Performance Criteria may include or exclude extraordinary charges, non-recurring or unusual items,
accounting charges or similar items. The Compensation Committee shall, within the time prescribed by Section&nbsp;162(m) of the Code, define in an objective fashion the manner of calculating the Performance Criteria it selects to use for such
performance period for the participants. Most of the above criteria are generally based on the Company&#146;s financial performance and metrics. The Board also believes that it is important to the Company&#146;s strategy and long-term success that
Meritage have a reputation for building quality homes and delivering excellent customer satisfaction. As such, the Board believes performance criteria based on key operational performance is important as well. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>Payment of Awards </B></FONT></P> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Payment of awards will be made in cash. The Compensation Committee will make all determinations regarding the achievement of Performance Goals and
the determination of actual awards. The Compensation Committee may in its discretion decrease, but not increase, the amount of any award that otherwise would be payable under the Incentive Plan. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>Amount Available and Maximum Individual Awards </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Compensation Committee shall determine
the amount available for awards in any year. The maximum award payable to any employee for a performance period is 2.25% of EBITDA, before consideration of bonuses paid to covered employees. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="4"><B>Amendment and Termination </B></FONT></P> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">The Compensation Committee may suspend or terminate the Incentive Plan at any time with or without prior notice. In addition, the Compensation Committee may from time to time and with or without prior notice, amend
or modify the Incentive Plan in any manner, but may not without stockholder approval adopt any amendment that would require the vote of stockholders of the Company pursuant to Section&nbsp;162(m) of the Code. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>New Plan Benefits </B></FONT></P> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">As of the date of this proxy statement, performance-based bonus award criteria have been incorporated into the employment agreements of our NEOs as
described in the section &#147;Compensation Discussion and Analysis&#151;2014 Developments&#148;. These awards and the related performance goals were approved by the Compensation Committee with respect to the Company&#146;s 2014 fiscal year.
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">If a quorum is present, an affirmative vote of a majority of the votes cast at the annual meeting is required to approve the amendment
to and the extension of the Incentive Plan. Broker non-votes and abstentions have no effect on the result of the vote. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><B>THE BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE &#147;FOR&#148; THE PROPOSAL TO APPROVE THE AMENDMENT TO AND EXTENSION OF OUR EXECUTIVE MANAGEMENT INCENTIVE PLAN AS DESCRIBED HEREIN. </B></FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">17</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;SECURITY&nbsp;OWNERSHIP&nbsp;BY&nbsp;MANAGEMENT&nbsp;AND&nbsp;PRINCIPAL&nbsp;STOCKHOLDERS&nbsp;&nbsp;&nbsp;
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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="6" COLOR="#32406b"><B><A NAME="toc680825_11"></A>Security Ownership by Management and Principal Stockholders </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><B>Management.</B> The following table summarizes, as of March&nbsp;15, 2014, the number and percentage of outstanding shares of our common stock
beneficially owned by the following: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">each Meritage director and nominee for director; </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">each executive officer named in the summary compensation table; and </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">all Meritage directors and executive officers as a group. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


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<TD WIDTH="33%"></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD WIDTH="30%"></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Name Of</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:ARIAL" SIZE="1"><B>Beneficial Owner<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Position With The</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Company</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Number</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Of&nbsp;Shares</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Owned</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Right To</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Acquire&nbsp;By</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>May&nbsp;14,<BR>2014</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000">
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Total&nbsp;Shares</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Beneficially</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Owned<SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(2)</SUP></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Percent Of</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Outstanding</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Shares<SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(3)</SUP></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Steven&nbsp;J.&nbsp;Hilton</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">Director, Chairman and CEO</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,517,598</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">(4)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">159,840</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,677,438</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">4.3</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Robert G. Sarver</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">Director</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">207,040</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">(5)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">207,040</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">*</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Raymond Oppel</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">Director</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">47,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">(6)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">47,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">*</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Peter L. Ax</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">Director</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">48,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">48,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">*</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Richard&nbsp;T.&nbsp;Burke,&nbsp;Sr.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">Director</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">38,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">7,500</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">45,500</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">*</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Gerald Haddock</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">Director</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">55,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">(7)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">7,500</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">62,500</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">*</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Dana Bradford</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">Director</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">31,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">31,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">*</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Michael&nbsp;R.&nbsp;Odell</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">Director</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">12,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">12,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">*</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Larry W. Seay</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1">Executive Vice President and</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:ARIAL" SIZE="1">Chief Financial
Officer</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">65,231</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">65,231</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">*</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">C.&nbsp;Timothy&nbsp;White</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1">Executive Vice President,</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:ARIAL" SIZE="1">General Counsel and
Secretary</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">28,710</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">28,710</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">*</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Steven&nbsp;M.&nbsp;Davis</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1">Executive Vice President&#151;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:ARIAL" SIZE="1">Chief Operating
Officer</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">30,200</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">30,200</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">*</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">All&nbsp;current&nbsp;directors&nbsp;and executive<BR>officers as a group (11
persons)</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2,079,779</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">174,840</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2,254,619</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">5.7</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD></TR>
</TABLE> <P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">*</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Less than 1%. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">The address for our directors and executive officers is c/o Meritage Homes Corporation, 8800 East Raintree Drive, Suite 300, Scottsdale, Arizona 85260.
</FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(2)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">The amounts shown include the shares of common stock actually owned as of March&nbsp;15, 2014, and the shares that the person or group had the right to
acquire within 60 days of that date. The number of shares includes shares of common stock owned 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 days of March&nbsp;15, 2014 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. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(3)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Based on 39,114,486&nbsp;shares outstanding as of March&nbsp;15, 2014. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(4)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Shares are held by family trusts. As of March&nbsp;15, 2014, Mr.&nbsp;Hilton had 350,000 shares pledged to a third-party lending institution, all of which are
securing loans. Our pledging policy is discussed on page 28 of this proxy statement. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(5)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Shares are held by family trusts (6,000&nbsp;shares Penny Sarver&#151;wife; 2,000 shares Penny Sarver FBO Max Sarver&#151;minor son; 8,170&nbsp;shares Robert
Sarver&#151;trustee of Eva Lauren Hilton Trust; 8,170&nbsp;shares Robert Sarver&#151;trustee of Shari Rachel Hilton Trust; 182,700&nbsp;shares Robert Sarver&#151;trustee of Robert Sarver Trust). Mr.&nbsp;Sarver has expressly disclaimed any
beneficial ownership of the shares held by the trusts for the benefit of Mr.&nbsp;Hilton&#146;s children (Eva Lauren Hilton Trust and Shari Rachel Hilton trust). Mr.&nbsp;Sarver had 120,200 shares pledged to a third party lending institution as of
March&nbsp;15, 2014. None of these shares secured loans in 2014. Our pledging policy is discussed on page 28 of this proxy statement. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(6)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">6,000 shares are owned indirectly by family trusts. Includes 4,000 shares obtained in prior years inadvertently omitted from reporting previously.
</FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(7)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Includes 15,000 shares held by charities on which Mr.&nbsp;Haddock serves as a board member and has authority to make investment decisions on behalf
of.&nbsp;Holdings are with The Haddock Center (10,000 shares), and the Haddock Foundation (5,000 shares).&nbsp;Mr.&nbsp;Haddock has expressly disclaimed beneficial ownership of these shares. </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">18</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

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<TD WIDTH="59%"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom" BGCOLOR="#32406b"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;SECURITY&nbsp;OWNERSHIP&nbsp;BY&nbsp;MANAGEMENT&nbsp;AND&nbsp;PRINCIPAL&nbsp;STOCKHOLDERS&nbsp;&nbsp;
</B></FONT></TD></TR></TABLE></DIV> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><B>Certain Other Beneficial
Owners.</B> Based on filings made under the Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;), as of March&nbsp;15, 2014, the only other known beneficial owners of more than 5% of Meritage common stock, other than
Mr.&nbsp;Hilton are shown in the following table: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


<TR>
<TD WIDTH="34%"></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD WIDTH="46%"></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000">&nbsp;<FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000">&nbsp;<FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000;border-bottom:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Shares&nbsp;Beneficially&nbsp;Owned</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Name of Other Beneficial Owners</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Address Of Beneficial Owner</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Number</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Percent</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">BlackRock<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">40 East 52<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">nd</SUP> Street, New York, NY 10022</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">4,164,112</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">11.5</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">T. Rowe Price Associates Inc. <SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(2)</SUP></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">100 E. Pratt Street, Baltimore, MD 21202</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">3,085,580</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">8.5</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Citadel Advisors, LLC<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(3)</SUP></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">131 S. Dearborn Street, 32<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">nd</SUP> Floor, Chicago, IL 60603</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2,896,784</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">8.0</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Vanguard Group,
Inc.<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(4)</SUP></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">100 Vanguard Blvd. Malvern, PA 19355</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2,121,819</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">5.9</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD></TR>
</TABLE> <P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Based solely on a Schedule 13G/A filed with the SEC on January&nbsp;10, 2014, Blackrock, Inc. and certain affiliated entities have sole voting power with
respect to 4,046,918 shares and sole dispositive power with respect to 4,164,112 shares. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(2)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Based solely on a Schedule 13G/A filed with the SEC on February&nbsp;10, 2014, T. Rowe Price Associates Inc. has sole voting power with respect to 798,310
shares and sole dispositive power with respect to 3,085,580 shares. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(3)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Based solely on a Schedule 13G/A filed with the SEC on February&nbsp;14, 2014, Citadel Advisors LLC has shared voting power and shared dispositive power with
respect to 2,896,784 shares. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(4)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Based solely on a Schedule 13G/A filed with the SEC on February&nbsp;11, 2014, Vanguard Group, Inc. has sole voting power with respect to 51,382 shares, sole
dispositive power with respect to 2,073,037 shares and shared dispositive power with respect to 48,782 shares. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">For
each of the reporting owners set forth above, the beneficially owned shares are held in various individual funds owned or managed by the reporting owners but none of the individual funds managed by the reporting owners above hold more than 5% of the
Company stock. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">19</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;CORPORATE&nbsp;GOVERNANCE&nbsp;PRINCIPLES&nbsp;AND&nbsp;BOARD&nbsp;MATTERS&nbsp;&nbsp;&nbsp;</B></FONT></TD>
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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="6" COLOR="#32406b"><B><A NAME="toc680825_12"></A>Corporate Governance and Board Matters </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="4"><B>Role of the Board of Directors </B></FONT></P> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Board of Directors (&#147;the Board&#148;) is elected by the stockholders to oversee the stockholders&#146; interests in the operation and
overall success of our business. The Board serves as our ultimate decision-making body, except for those matters reserved to or that require a vote of our stockholders. The Board selects and oversees the members of senior management who are charged
by the Board with conducting our business. We have established and operate in accordance with a comprehensive plan of corporate governance that defines and sets ethical standards for the conduct of our directors, officers and employees. This plan
provides an important framework within which the Board can pursue our strategic objectives and ensure long-term stockholder value. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>Corporate
Governance Principles and Practices </B></FONT></P> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">We have adopted Corporate Governance Principles and Practices that define the key elements of our corporate governance framework and philosophy, including: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">director qualifications, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">independence criteria, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">director responsibilities, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">committee responsibilities and structure, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">officer and director stock ownership requirements, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">director resignation policy, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">director access to officers and employees, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">our philosophy with respect to director compensation, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">confidentiality requirements, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">director orientation and continuing education, and </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">our plans with respect to management succession. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">Our Corporate Governance Principles and Practices are available on our website at <I>investors.meritagehomes.com</I> and we will provide a printed copy to any stockholder upon request. These principles are reviewed
regularly by the Nominating/Governance Committee and changes are made as the Committee deems appropriate. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>Director Qualifications and Diversity
</B></FONT></P> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Our Board of Directors is
comprised of a group of individuals whose previous experience, financial and business acumen, personal ethics and dedication and commitment to our company allow the Board to complete its key task as the over-seer and governing body of Meritage Homes
Corporation. The specific experience and qualifications of each of our Board members are set forth below. The Board is committed to a policy of inclusiveness and diversity. The Board believes members should be comprised of persons with diverse
skills, expertise, backgrounds and experiences including, without limitation, the following areas: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">management or board experience in a wide variety of enterprises and organizations, finance, banking and capital markets, finance, banking and capital markets,
</FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">accounting, </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">legal and regulatory, </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">real estate, including homebuilding, commercial and land development, </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">sales and marketing, and </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">operations. </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">20</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;CORPORATE&nbsp;GOVERNANCE&nbsp;PRINCIPLES&nbsp;AND&nbsp;BOARD&nbsp;MATTERS&nbsp;&nbsp;
</B></FONT></TD></TR></TABLE></DIV> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">In case of a Board vacancy or if the
Board elects to increase its size, determinations regarding the eligibility of director candidates are made by the Nominating/Governance Committee, which considers the candidate&#146;s qualifications as to skills and experience in the context of the
needs of the Board of Directors and our stockholders. When seeking new Board candidates, the Nominating/Governance Committee is committed to a policy of inclusiveness and will take reasonable steps to ensure that women and minority candidates are
considered for the pool of candidates from which the Board nominees are chosen and will endeavor to include candidates from non-traditional venues. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">Our Board is comprised of the following members: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Class I Directors </B></FONT></P>
<P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top" NOWRAP STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000" BGCOLOR="#c1c5d2"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Steven J. Hilton, 52</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Mr. Hilton was co-chairman and co-chief executive officer of
Meritage Homes Corporation from 1996 to May 2006. In May 2006, Mr.&nbsp;Hilton was named the Company&#146;s chairman and chief executive officer. In 1985, Mr.&nbsp;Hilton co-founded Arizona-based Monterey Homes, the predecessor company to Meritage
Homes Corporation. Under Mr.&nbsp;Hilton&#146;s leadership, Monterey became publicly traded in 1996. Mr.&nbsp;Hilton received his Bachelor of Science degree in accounting from the University of Arizona and is a director of Western Alliance
Bancorporation, a leading bank holding company based in Phoenix, Arizona.</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px" align="left">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="1">Mr.&nbsp;Hilton has almost 30 years of real estate experience and is considered an expert and innovator in the homebuilding industry. He is a frequent participant in panels and interviews regarding the
industry.</FONT></P></TD></TR>
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<TD VALIGN="top" NOWRAP STYLE="BORDER-BOTTOM:1px solid #000000" BGCOLOR="#c1c5d2"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Raymond Oppel, 57</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Mr. Oppel has been a director since December 1997. Mr.&nbsp;Oppel is a licensed real
estate broker and currently is active as a private investor in real estate development. He was the co-founder, chairman and chief executive officer of The Oppel Jenkins Group, a regional homebuilder in Texas and New Mexico, which was sold in 1995 to
the public homebuilder KB Home.</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px" align="left">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Mr.&nbsp;Oppel has
almost 30 years of experience in the homebuilding business. Mr.&nbsp;Oppel possesses extensive knowledge about the real estate industry in general and the homebuilding industry in particular.</FONT></P></TD></TR>
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<TD VALIGN="top" NOWRAP STYLE="BORDER-BOTTOM:1px solid #000000" BGCOLOR="#c1c5d2"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Richard T. Burke, Sr., 70</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Mr. Burke has been a director since September 2004. Mr.&nbsp;Burke is currently the
Chairman of the Board of Directors of UnitedHealth Group, which he founded, took public in 1984 and served as chief executive officer as well. From 1995 until 2001, Mr.&nbsp;Burke was the owner and chief executive officer of the Phoenix Coyotes, a
National Hockey League team and has served as a director for a number of other companies, public and private. Mr.&nbsp;Burke previously served as a director for First Cash Financial Services, Inc., a position from which he resigned within the past
five years.</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px" align="left">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Mr.&nbsp;Burke is a business and civic
leader in Phoenix, Arizona, and his experience as the chairman and CEO of a multi-billion dollar public company provides the Board with outstanding corporate governance and financial insight.</FONT></P></TD></TR>
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<TD VALIGN="top" NOWRAP STYLE="BORDER-BOTTOM:1px solid #000000" BGCOLOR="#c1c5d2"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Dana C. Bradford, 49</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Mr. Bradford has been a director since August 2009. Currently, Mr.&nbsp;Bradford is the
Chief Executive Officer of the Waitt Company, a diversified investment company. From 2005 to 2011, Mr.&nbsp;Bradford was the president and managing partner of McCarthy Capital Corporation, a private equity firm. He serves as executive chairman of
the board of Prime Global Sports, a tennis and squash company. Mr.&nbsp;Bradford also serves as a director on the boards of the Waitt Company, Vornado Air, Southwest Value Partners, a San Diego-based real estate investment company and Custom Service
Profiles, a provider of customer satisfaction data and analytics. Mr.&nbsp;Bradford formerly served as chairman of the board of SAFE Boats International, a director on the boards of Ballantyne (AMEX: BTN); NRG Media; Guild Mortgage; Gold Circle
Films and McCarthy Group, an Omaha-based investment company.</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px" align="left">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="1">Mr.&nbsp;Bradford earned a bachelor&#146;s degree in business administration from the University of Arizona and an MBA from Creighton University. Mr.&nbsp;Bradford brings additional perspective to the Board
relating to real estate and corporate finance matters.</FONT></P></TD></TR>
</TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">21</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;CORPORATE&nbsp;GOVERNANCE&nbsp;PRINCIPLES&nbsp;AND&nbsp;BOARD&nbsp;MATTERS&nbsp;&nbsp;&nbsp;</B></FONT></TD>
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</B></FONT></P> <P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top" NOWRAP STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000" BGCOLOR="#c1c5d2"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Peter L. Ax, 54</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Mr. Ax has been a director since September 2000. He is the
managing partner of Phoenix Capital Management, an operationally focused venture capital firm. Mr.&nbsp;Ax is the former chairman and chief executive officer of SpinCycle, Inc., a public reporting consolidator and developer of coin-operated
Laundromats. Previously, Mr.&nbsp;Ax served as head of the Private Equity Division and senior vice president of Lehman Brothers in New York and has served in various operating roles for enterprises operated by Phoenix Capital Management. Mr.&nbsp;Ax
is also on the board of directors of iGo, Inc. (formerly, NASDAQ: IGOI) and serves on the Advisory Board of Directors of Cascadia Capital, a Seattle based investment banking and merchant banking firm and also serves annually as a judge in the
Wharton Business School competition.</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px" align="left">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Mr.&nbsp;Ax holds
an MBA from the Wharton School at the University of Pennsylvania, a J.D. from the University of Arizona, and a B.S.B.A. from the University of Arizona, and has been a certified public accountant. Mr.&nbsp;Ax possesses extensive skills and experience
relating to, among other things, capital markets and corporate finance.</FONT></P></TD></TR>
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<TD VALIGN="top" NOWRAP STYLE="BORDER-BOTTOM:1px solid #000000" BGCOLOR="#c1c5d2"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Robert G. Sarver, 52</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Mr. Sarver has been a director since December 1996. He is the chairman and chief executive
officer of Western Alliance Bancorporation, a director of Skywest Airlines, and the managing partner of the Phoenix Suns NBA basketball team. In 1990, Mr.&nbsp;Sarver co-founded and currently serves as a director of Southwest Value Partners, a San
Diego real estate investment company. From 1995 to 1998, he served as chairman of Grossmont Bank. He was the chairman and chief executive officer of California Bank&nbsp;&amp; Trust from 1998 to 2001. Mr.&nbsp;Sarver earned a bachelor&#146;s degree
in business administration from the University of Arizona and has been a certified public accountant.</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px" align="left">&nbsp;</P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Mr.&nbsp;Sarver has been active in the real estate industry for more than 30 years and is known nationwide as a leader and expert in banking. He has
extensive experience in a wide spectrum of successful real-estate activities, including commercial, residential and development projects.</FONT></P></TD></TR>
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<TD VALIGN="top" NOWRAP STYLE="BORDER-BOTTOM:1px solid #000000" BGCOLOR="#c1c5d2"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Gerald Haddock, 66</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Mr. Haddock was appointed as a director in January 2005. Mr.&nbsp;Haddock is the founder
of Haddock Enterprises, LLC and formerly served as president and Chief Executive Officer of Crescent Real Estate Equities, a diversified real estate investment trust. He is currently a director of ENSCO International, Plc., a leading global offshore
oil and gas drilling service company. As a director for ENSCO, he has served as its co-lead director and Chairperson of the Audit Committee and is also a member of the Nominating &amp; Governance Committee. From December 2004 to October 2008, Mr.
Haddock served as a Board Member of Cano Petroleum, Inc. He also serves on the board of trustees and is a member of various committees for the Baylor College of Medicine, the Executive Investment Committee at Baylor University, the M.D. Anderson
Proton Therapy Education and Research Foundation, and the CEELI Institute.</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px" align="left">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="1">Mr.&nbsp;Haddock received his Bachelor of business administration and Juris Doctorate degrees from Baylor University. He also received a Masters of Law in Taxation degree from New York University and an MBA degree
from Dallas Baptist University.</FONT></P></TD></TR>
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<TD VALIGN="top" NOWRAP STYLE="BORDER-BOTTOM:1px solid #000000" BGCOLOR="#c1c5d2"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Michael R. Odell, 50</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Mr. Odell has been a director since December 2011. He is the president and chief executive
officer of The Pep Boys&#151;Manny, Moe&nbsp;&amp; Jack. Pep Boys is the nation&#146;s leading automotive aftermarket service and retail chain. Mr.&nbsp;Odell joined Pep Boys in September 2007 as the chief operating officer, and has also been a
member of the Pep Boys&#146; Board of Directors since 2008.&nbsp;Previously, he served as executive vice president and general manager of Sears Retail&nbsp;&amp; Specialty Stores, a $27 billion division of Sears Holdings Corporation.</FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px" align="left">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Mr.&nbsp;Odell holds an M.B.A. from Northwestern University&#146;s
Kellogg School of Management, and a B.S. in Accounting from the University of Denver&#146;s Daniels College of Business. He joined Sears in 1994 where he served in executive operations positions of increasing responsibility, including as Vice
President, Stores-Sears Automotive Group.&nbsp;Prior to Sears, Mr.&nbsp;Odell was a CPA with Deloitte&nbsp;&amp; Touche LLP.</FONT></P></TD></TR>
</TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>Director Independence </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Nominating/Governance Committee
evaluates and reports to the Board of Directors regarding the independence of each candidate. Consistent with the rules and regulations of the NYSE, at least a majority of the Board of Directors must be independent. No director will be deemed to be
independent unless the Board affirmatively determines that the director has no material relationship with the Company, either directly or as an officer, shareowner, member, partner or trustee of an organization that has a relationship with the
Company. The Board observes all criteria established by the NYSE and other governing laws and regulations. In its review of director independence, the Board considers all commercial, banking, consulting, legal, accounting, charitable or other
business relationships the director may have with the Company. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">22</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;CORPORATE&nbsp;GOVERNANCE&nbsp;PRINCIPLES&nbsp;AND&nbsp;BOARD&nbsp;MATTERS&nbsp;&nbsp;
</B></FONT></TD></TR></TABLE></DIV> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">As a result of its review, the Board
of Directors has determined that a majority of Meritage&#146;s Board members are independent. Our independent directors are Peter L. Ax, Raymond Oppel, Richard T. Burke, Sr., Gerald Haddock, Dana Bradford and Michael R. Odell. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">In making this determination, the Board of Directors evaluated whether there exists any relationships between these individuals, and Meritage
determined no relationship exists between Meritage and any independent director. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Steven J. Hilton is not considered independent because
he is employed by the Company. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Prior to 2004, Robert G. Sarver was deemed an independent director. The Nominating/Governance Committee
has continually monitored certain relationships between Mr.&nbsp;Sarver and Meritage along with relationships between Mr.&nbsp;Sarver and Mr.&nbsp;Hilton. Mr.&nbsp;Sarver and Mr.&nbsp;Hilton have certain business relationships unrelated to Meritage,
including Mr.&nbsp;Sarver serving as trustee of certain of Mr.&nbsp;Hilton&#146;s family trusts. The Nominating/Governance Committee evaluated these relationships and determined that they did not impair Mr.&nbsp;Sarver&#146;s independence because
they do not involve Meritage and are insignificant in relation to Mr.&nbsp;Sarver&#146;s net worth. During 2004, Mr.&nbsp;Sarver became the controlling owner of the Phoenix Suns basketball team, in which Mr.&nbsp;Hilton purchased a minority
ownership interest. This relationship was closely evaluated by the Nominating/Governance Committee because of its significance to Messrs. Sarver and Hilton. The Nominating/Governance Committee and the Board of Directors believe Mr.&nbsp;Sarver is a
valuable member of the Board and that the Company benefits from his extensive business experience. Although Mr.&nbsp;Sarver does not have any material relationship with the Company which under the applicable rules and regulations would deem him not
independent, the Nominating/Governance Committee has nevertheless concluded it is at this time in the best interest of Meritage&#146;s stockholders that Mr.&nbsp;Sarver not be deemed an independent director. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Board has also determined that all governance committees of the Board should be composed entirely of independent directors and therefore neither
Mr.&nbsp;Hilton nor Mr.&nbsp;Sarver serve on any Board governance committees. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>Board Leadership Structure </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Steven J. Hilton, our co-founder and CEO,
also serves as a director and the Chairman of the Board. We believe Mr.&nbsp;Hilton&#146;s unique industry experience and continuing involvement in the day-to-day operations of the Company make him highly qualified to serve as our Board&#146;s
Chairman. Mr.&nbsp;Hilton co-founded Meritage Homes and is thus intimately familiar with its history, culture and operations. Mr.&nbsp;Hilton possesses in-depth knowledge and expertise in the homebuilding industry as a whole and Meritage Homes in
particular and is the Company&#146;s largest individual shareholder. The Board of Directors has concluded that this puts Mr.&nbsp;Hilton in a unique position and makes it compelling for him to serve both as Chairman of the Board and CEO to
effectively represent the stockholders&#146; interest. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Mr.&nbsp;Ax, our Audit Committee Chairman, also serves as the Board&#146;s lead
independent director. Mr.&nbsp;Ax has extensive knowledge of capital markets and corporate finance and has previously served as CEO of a publicly traded corporation. We believe that Mr.&nbsp;Ax&#146;s role as our lead independent director serves as
a counterbalance to and complements Mr.&nbsp;Hilton&#146;s position as Board Chairman and provides the appropriate level of independent director oversight. Additionally, our lead independent director presides over all independent directors meetings
and can call special meetings of the independent directors as he deems necessary, bringing any matters the lead independent director feels should be addressed to the majority of our directors at any time. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>CEO and Management Succession </B></FONT></P> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Under the charter of the Nominating/Governance Committee, it is the role of the Nominating/Governance Committee to review and recommend to the Board
of Directors changes as needed to the Company&#146;s Corporate Governance Principles and Practices, including items such as management succession, policies and principles for CEO selection and performance review, and policies regarding succession in
the event of an emergency or departure of the CEO. Our Corporate Governance Principles and Practices provide, among other things, that our Executive Compensation Committee is to conduct an annual review of the performance of the CEO. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Board of Directors considers management evaluation and CEO succession planning an important responsibility of the Board. Under our Corporate
Governance Principles and Practices, the Board of Directors is responsible for approving a succession plan for our CEO and other senior officers. Issues relating to CEO succession planning are addressed regularly (at least annually) by the Board.
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">23</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top"></TD></TR></TABLE> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>Risk Oversight </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Our Board of Directors has overall
responsibility for the oversight of risk management. As part of this oversight, on a regular basis, our Board of Directors receives reports from various members of management and is actively involved in monitoring and approving key decisions
relating to our operations and strategy. Additionally, the management teams at our divisions must obtain approvals from our corporate executive team prior to engaging in certain activities or committing prescribed amounts of the Company&#146;s
financial and operational resources. As a result, senior management, who report directly to executive management, cannot authorize transactions that exceed prescribed thresholds that, while they may result in short-term benefits for their divisions,
may expose us to unwarranted risks. Similarly, our executive management (including our NEOs) cannot engage in certain transactions without approval from our Board of Directors. For example, management must obtain approval from the Board of
Directors, acting through the Land Committee, before proceeding with any land acquisition above a pre-established threshold. In addition, our General Counsel regularly reports to the Board of Directors information concerning ongoing litigation and
possible legal, regulatory and other risks that might expose the Company to liability or loss. The Board also annually reviews the Company&#146;s insurance programs. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">Management operates the business within parameters established by an annual budget that is reviewed and approved by the Board of Directors. At each regular Board meeting, management provides the Board of Directors
a status report with respect to the budget and addresses any material variances. We believe our budgeting process provides a useful mechanism for identifying risks and the related rewards and provides a quantitative method for evaluating those risks
and rewards. The Board of Directors also provides oversight of risk through its standing committees. For example: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Our Audit Committee is responsible for reviewing and analyzing significant financial and operational risks and how management is managing and mitigating such
risks through its internal controls and risk management processes. Our VP of Internal Audit reports directly to the Audit Committee and provides routine updates on the progress and findings of the on-going internal audit reviews. Our external
auditors also have at least quarterly discussions with our Audit Committee, and meet both with and without Company management present, to highlight what they perceive as our key financial risks. Our Audit Committee plays an important role in
approving our annual internal controls monitoring plan and is regularly engaged in discussions with management regarding business risks, operational risks, transactional risks and financial risks. </FONT></P></TD></TR></TABLE>
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<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Our Executive Compensation Committee oversees risks relating to the compensation and incentives provided to our senior executive officers. The Executive
Compensation Committee negotiates and approves all of the employment agreements of our NEOs and the Committee approves all grants of equity awards to all of our eligible employees. Since 2009, we have begun using restricted share grants in lieu of
stock options in our long-term equity compensation to provide an incentive to balance the assumption of risk while maintaining shareholder value. In addition, for our NEOs, half of these equity grants contain performance vesting criterion.
</FONT></P></TD></TR></TABLE>
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<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Since 2009, all of our Independent Directors sit on all of our governance Committees to provide greater Director participation in key policy decisions.
</FONT></P></TD></TR></TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>The Board and Board Committees </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">We currently have eight incumbent directors
and the following committees: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Audit Committee </FONT></P></TD></TR></TABLE>
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<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Executive Compensation Committee </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Nominating/Governance Committee </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Land Committee </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Our Board of
Directors typically meets on a quarterly basis, with additional meetings held as required. During 2013, the Board of Directors held five meetings. Each director attended at least 75% of the aggregate of the Board and committee meetings of which they
were a member. Our Land Committee does not have regularly scheduled meetings and only meets when significant land transactions require the Land Committee&#146;s consideration. Directors are expected to attend our annual meetings of stockholders. All
directors attended our 2013 annual meeting, which was held on May&nbsp;15, 2013. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">24</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;CORPORATE&nbsp;GOVERNANCE&nbsp;PRINCIPLES&nbsp;AND&nbsp;BOARD&nbsp;MATTERS&nbsp;&nbsp;
</B></FONT></TD></TR></TABLE></DIV> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The following table identifies the
current members of our Board of Directors and the number of meetings held during 2013: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Board of Directors</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Audit&nbsp;Committee</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Executive</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Compensation</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Committee</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Nominating/<BR>Governance</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Committee</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Land<BR>Committee</B></FONT></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Steven J. Hilton*</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Peter L. Ax +</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center">


<IMG SRC="g680825g93k90.jpg" ALT="LOGO">
&nbsp;</TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>&times;</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1"></FONT></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>&times;</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1"></FONT></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>&times;</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1"></FONT></FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Raymond Oppel</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>&times;</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1"></FONT></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
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<IMG SRC="g680825g93k90.jpg" ALT="LOGO">
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>&times;</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1"></FONT></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>&times;</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1"></FONT></FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Richard T. Burke, Sr.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>&times;</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1"></FONT></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>&times;</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1"></FONT></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>&times;</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1"></FONT></FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Gerald Haddock</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>&times;</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1"></FONT></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>&times;</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1"></FONT></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
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<IMG SRC="g680825g93k90.jpg" ALT="LOGO">
&nbsp;</TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>&times;</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1"></FONT></FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Dana Bradford</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>&times;</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1"></FONT></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>&times;</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1"></FONT></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>&times;</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1"></FONT></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>&times;</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1"></FONT></FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Michael R. Odell</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>&times;</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1"></FONT></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>&times;</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1"></FONT></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>&times;</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1"></FONT></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Robert G. Sarver</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Number of Meetings</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">8</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">4</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">4</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">8</FONT></TD></TR>
</TABLE> <P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="1%"></TD>
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<TD WIDTH="97%"></TD></TR>


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<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">*</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">=</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Chairman of the Board</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>&times;</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1"></FONT></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">=</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Member</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"> <P ALIGN="justify">


<IMG SRC="g680825g93k90.jpg" ALT="LOGO">
</P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">=</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Committee Chair</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">+</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">=</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Lead Independent Director</FONT></P></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Audit Committee </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">The Board of Directors has established an Audit Committee in accordance with Section&nbsp;3(a)(58)(A) of the Exchange Act (Exchange Act), and the rules and regulations of the NYSE. The Audit Committee assists the
Board of Directors in: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">fulfilling its oversight of the integrity of our financial statements, </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">overseeing our compliance with legal and regulatory requirements, </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">determining the independent registered public accounting firm&#146;s qualifications and independence, </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">evaluating the performance of our internal audit function and independent registered public accounting firm and </FONT></P></TD></TR></TABLE>
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<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">reviewing and approving any related party transaction between us and senior executive officers and directors. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Audit Committee has the sole authority to appoint and replace our independent registered public accounting firm and approves all audit
engagement fees and terms of all significant non-audit engagements with the independent registered public accounting firm in accordance with the pre-approval policies set forth in our Audit Committee charter. The Audit Committee has the authority to
obtain advice and assistance from, and receives appropriate funding from us for, outside legal, accounting and other advisors as it deems necessary to carry out its duties. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">The Audit Committee operates under a written charter established by the Board. The charter is available on our website at <I>investors.meritagehomes.com</I> and we will provide a printed copy to any stockholder
upon request. Each member of the Audit Committee meets the independence requirements of the NYSE and the Exchange Act, and is financially literate, knowledgeable and qualified to review our financial statements. In addition, each member of the Audit
Committee has accounting or related financial management expertise. The Board of Directors has determined that Peter Ax, an independent director as defined by the NYSE&#146;s listing standards, is an &#147;audit committee financial expert.&#148;
Information about Mr.&nbsp;Ax&#146;s past business and educational experience is included in his biography in this proxy statement under the caption &#147;&#151;Class II Directors&#148;. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The report of the Audit Committee is included in this proxy statement under the caption &#147;Report of the Audit Committee.&#148; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Executive Compensation Committee </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">The Board of Directors has established our Executive Compensation Committee (the &#147;Compensation Committee&#148;) in accordance with the NYSE&#146;s rules and regulations. The Compensation Committee regularly
reports to the Board of Directors and its responsibilities include: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">reviewing and approving goals and objectives relative to the compensation of our NEOs, evaluating our NEOs&#146; performance in light of these goals and
approving the compensation of our NEOs, </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">reviewing and incorporating stockholder preferences with respect to compensation agreements with our NEOs, </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">overseeing all equity-based award grants, </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">making recommendations to the Board of Directors with regard to non-NEO compensation and equity-based awards, and </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">producing a report on executive compensation to be included in our annual proxy statement. </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">25</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<h5 align="left"><a href="#toc">Table of Contents</a></h5>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;CORPORATE&nbsp;GOVERNANCE&nbsp;PRINCIPLES&nbsp;AND&nbsp;BOARD&nbsp;MATTERS&nbsp;&nbsp;&nbsp;</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="top"></TD></TR></TABLE> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Compensation Committee is
currently comprised of six members of the Board, each of whom is independent under the independence standards of the NYSE, a &#147;non-employee director&#148; under Section&nbsp;16 of the Exchange Act, and an &#147;outside director&#148; for
purposes of Section&nbsp;162(m) of the Internal Revenue Code (the &#147;Code&#148;). Generally the Compensation Committee chairman is in charge of setting the schedule for the Compensation Committee&#146;s meetings, as well as the agenda of each
meeting. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Compensation Committee operates under a written charter, which is available on our website at
<I>investors.meritagehomes.com</I>. We will provide a printed copy of the charter to any stockholder upon request. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Compensation
Committee has the sole authority to hire outside advisors and consultants and to determine the terms, fees and costs of such engagements. In 2013, the Compensation Committee engaged POE Group, to provide an update on current compensation trends and
to provide recommendations on our NEOs&#146; current compensation packages. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Compensation Committee determines executive compensation
with respect to our NEOs independent of management. The Compensation Committee approves all grants of equity-based awards. For the NEOs, the number and type of equity award grants in most cases are determined or based on an employment agreement
between the Company and the NEO, which are negotiated and approved by the Compensation Committee; however, they may be adjusted based on the Compensation Committee&#146;s review of the NEO&#146;s performance and competitive market factors. For
non-NEOs, management is responsible for recommending to the Compensation Committee the persons to receive grants and the nature and size of the proposed award. Because management is responsible for the day-to-day operation of the Company, the
Compensation Committee believes that management is in the best position to make this recommendation. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Compensation Committee
Interlocks and Insider Participation </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">None of the members of the Compensation Committee is, or has been, an employee of Meritage or
any of its subsidiaries. There were no interlocking relationships between Meritage and other entities that might affect the determination of the compensation of Meritage&#146;s executive officers. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Nominating/Governance Committee </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">The Board of Directors has established a Nominating/Governance Committee, which directly reports to the Board of Directors and is responsible for: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">identifying individuals qualified to become Board members and recommending director nominees for the next annual meeting of stockholders,
</FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">reviewing and recommending changes as needed to the Company&#146;s Corporate Governance Principles and Practices, </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">addressing such items as management succession, including policies and principles for our CEO selection and performance review and succession in the event of
an emergency or departure of the CEO, </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">developing director qualifications and determining whether newly elected directors or prospective director candidates meet those qualifications,
</FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">considering director nominations received from stockholders, </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">reviewing the charters of the Compensation Committee, Audit Committee and Nominating/Governance Committee and any other committees
</FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">assess and monitor, with Board involvement, the Board&#146;s performance, </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">recommending nominees for the Compensation Committee, Audit Committee, Land Committee, and </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">promoting adherence to a high standard of corporate governance and company values. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Nominating/Governance Committee has the sole authority to retain and terminate any search firm used to identify director candidates, including
sole authority to approve the search firm&#146;s fees and other retention terms. The Nominating/Governance Committee operates under a written charter, which is available on our website at <I>investors.meritagehomes.com.</I> We will provide a printed
copy of the charter to any stockholder upon request. Each member of the Nominating/Governance Committee meets the independence requirements of the NYSE. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Director Nomination Process </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><I>Stockholder Nominees.</I> The policy of the
Nominating/Governance Committee is to consider properly-submitted stockholder nominations for candidates for membership on the Board of Directors as described below. In evaluating such nominations, the Nominating/Governance Committee seeks to
achieve a balance of knowledge, experience and capability on the Board and to address the membership qualifications and criteria described below. Any stockholder nominations proposed for consideration by </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">26</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;CORPORATE&nbsp;GOVERNANCE&nbsp;PRINCIPLES&nbsp;AND&nbsp;BOARD&nbsp;MATTERS&nbsp;&nbsp;
</B></FONT></TD></TR></TABLE></DIV> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">the Nominating/Governance Committee
must include the nominee&#146;s name and qualifications for Board membership and should be submitted to: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="2">Meritage Homes Corporation
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="2">8800 East Raintree Drive </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="2">Suite 300 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="2">Scottsdale, Arizona 85260
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="2">Attn:&nbsp;&nbsp;Secretary </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Secretary will forward all nominations to the Nominating/Governance Committee. In addition, our bylaws permit stockholders to nominate directors
for consideration at an annual stockholder meeting. For a description of the process for submitting such nominations, and the deadline to propose actions for consideration at next year&#146;s annual meeting, please see &#147;Stockholders
Proposals&#148; on page 56 of this proxy statement. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><I>Director Qualifications.</I> The Nominating/Governance Committee will evaluate
prospective nominees using the standards and qualifications set forth in our Corporate Governance Principles and Practices and in our criteria for new directors. Prospective nominees must meet the Company&#146;s qualification requirements set forth
in our Corporate Governance Principles and Practices and should have the highest professional and personal ethics and values, as well as broad experience at the policy-making level in business, government, education or public interest. Prospective
nominees should be committed to enhancing stockholder value and should have sufficient time to devote to carrying out their duties and to provide insight based upon experience, talent, skill and expertise appropriate for the Board. Each prospective
nominee must be willing and able to represent the interests of our stockholders. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><I>Identifying and Evaluating Nominees for
Directors.</I> The Nominating/Governance Committee utilizes a variety of methods for identifying and evaluating nominees to serve as directors. The Nominating/Governance Committee assesses the current composition of the Board of Directors, the
balance of management and independent directors and the need for Audit Committee expertise in its evaluation of prospective nominees. In the event that vacancies are anticipated, or otherwise arise, the Nominating/Governance Committee may seek
recommendations from current Board members, professional search firms, outside legal, accounting and other advisors, or stockholders in order to locate qualified nominees. The Nominating/Governance Committee also evaluates each candidate in the
context of maintaining and creating a diverse Board, as previously discussed. After completing its evaluation, the Nominating/Governance Committee will make a recommendation to the full Board of Directors as to the persons who should be nominated by
the Board of Directors, and the Board will determine the nominees after considering such recommendations. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Executive Sessions of
Independent Directors </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Our Corporate Governance Principles and Practices dictate that the non-management members of the Board of
Directors will meet in executive session at least quarterly outside the presence of directors that are employees or officers of the Company. The non-management directors met in executive session four times during 2013. Peter Ax is our Lead
Independent Director and presides over these executive session meetings. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Land Committee </B><B><I></I></B><B> </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">In early 2013, the Board of Directors established a Land Committee, which directly reports to the Board of Directors. Prior to such time, the
approvals for significant land transactions were obtained by an affirmative vote of a majority of the Board&#146;s directors. The Land Committee is responsible for reviewing and approving/denying land acquisition transactions recommended by
management in excess of a predetermined monetary threshold. The Committee is intended to function as an additional governance and approval mechanism for executive management&#146;s land acquisition approval policies and procedures. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">As of the date of this filing, the Land Committee was comprised of Messrs. Ax, Oppel, Bradford and Haddock. The Land Committee is transactional in
nature; accordingly, the frequency of meetings is not pre-determined, and meetings only occur when significant land transactions arise that require Land Committee consideration. Currently, no compensation is paid to any director for service on the
Land Committee, and there is not a Land Committee chair. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">27</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;CORPORATE&nbsp;GOVERNANCE&nbsp;PRINCIPLES&nbsp;AND&nbsp;BOARD&nbsp;MATTERS&nbsp;&nbsp;&nbsp;</B></FONT></TD>
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<TD VALIGN="top"></TD></TR></TABLE> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>Code of Ethics </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">We are committed to conducting business
consistent with the highest ethical and legal standards. The Board of Directors has adopted a Code of Ethics, which is applicable to all employees, including our senior and executive management and our directors. The Code is available on our website
at <I>investors.meritagehomes.com</I> and we will provide a print copy to any stockholder upon request. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Meritage Stock Pledging
Policy </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">In February 2013, the Nominating/Governance Committee approved a modification to the Company&#146;s securities trading policy
prohibiting all future pledging of the Company&#146;s equity securities by our employees, NEOs and Directors. In connection with this policy, the Company adopted a grandfather provision relating to existing pledges. As of the date our modified
policy was adopted, only Messrs. Hilton and Sarver had outstanding pledges. Our grandfather provision exempts existing pledges and continuation or replacements thereto; provided, however, that with respect to these existing pledges (or continuations
or replacements thereof) the number of shares pledged may not exceed the greater of (i)&nbsp;two-thirds of the total number of Meritage shares beneficially owned by Mr.&nbsp;Hilton or Sarver, as the case may be, or (ii)&nbsp;200,000 shares. In
establishing these grandfather provisions, the Board considered the particular circumstances of Mr.&nbsp;Hilton and Mr.&nbsp;Sarver, the founder of the Company and an original board member, respectively, both of whom have a significant ownership in
the Company&#146;s equity securities. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Anti-Hedging Policy </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">We have a securities trading policy that sets forth guidelines and restrictions on transactions involving our stock, which are applicable to all
employees, including our NEOs and Directors. Among other things, our policy prohibits all types of hedging transactions, including, but not limited to, purchases of stock on margin, short sales, buying or selling puts or calls and similar
transactions involving any derivative securities. These types of transactions would allow employees to own Company stock without the full risks and rewards of ownership. When that occurs, employees may no longer have the same objectives as the
Company&#146;s other stockholders and therefore such transactions involving Meritage stock are prohibited. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>Communications with the Board of
Directors </B></FONT></P> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Interested
persons may communicate with the Board of Directors by writing to our Lead Independent Director at the address set forth on page 2. The Lead Independent Director will disseminate the information to the rest of the Board at his discretion.
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">28</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;COMPENSATION&nbsp;DISCUSSION&nbsp;AND&nbsp;ANALYSIS&nbsp;&nbsp;</B></FONT></TD></TR></TABLE></DIV>
<p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="6" COLOR="#32406b"><B><A NAME="toc680825_13"></A>Compensation Discussion and Analysis
</B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><I>The following discussion and analysis should be read in conjunction with the &#147;Summary Compensation Table&#148; and related
tables that are presented immediately below. </I><I> </I></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The purpose of this compensation discussion and analysis (&#147;CD&amp;A&#148;)
is to provide information about each material element of compensation that we pay or award to, or that is earned by, our NEOs. For our 2013 fiscal year, our NEOs were: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Steven J. Hilton, Chairman and Chief Executive Officer </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Larry W. Seay, Executive Vice President, Chief Financial Officer </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">C. Timothy White, Executive Vice President, General Counsel and Secretary </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Steven M. Davis, Executive Vice President, Chief Operating Officer </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">This CD&amp;A addresses and explains the numerical and related information contained in the summary compensation tables and includes actions regarding executive compensation that occurred during 2013, including the
award of bonuses related to 2013 performance, and the adoption of any new, or the modification of any existing, compensation programs, if applicable. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B><A NAME="toc680825_14"></A>2013 Environment </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">During 2013, the overall housing market
continued to improve after the recovery that began to accelerate in 2012. Existing pent-up demand and increased consumer confidence, together with excellent housing affordability metrics and relatively low inventories of homes for sale in many
markets resulted in strong financial and operational performance for the entire homebuilding sector. While individual markets continue to experience varying results as local economic and employment situations strongly influence demand, all of our
markets benefited from the homebuilding recovery, particularly those markets most affected by the downturn, including California, Arizona and Florida. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">Meritage&#146;s financial and operational performance continued to improve in 2013 with gains in our key operating metrics. In 2011 and 2012, we entered new markets in Tampa, Florida and Charlotte, North Carolina,
which began to meaningfully contribute to our results in 2013. We continued our expansion in the last half of 2013, when we entered the Nashville, Tennessee market through the acquisition of a local homebuilder. We believe our improved financial and
operating results were due to a combination of market conditions and strategic investments. Our investments in well-located new communities, growing markets and innovative product offerings have created a strategic differentiation for Meritage
Homes. We believe differentiation has benefited us throughout the last several years and will continue to provide us with opportunities for growth and profitability in the future. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The profitability and growth of Meritage is dependent on the executive management&#146;s vision and actions to establish and support these strategic
goals and we feel we have taken, and continue to take, appropriate steps for Meritage to be well-positioned for success. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B><A NAME="toc680825_15"></A>Executive Summary </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Meritage Homes is committed to building
long-term stockholder value. Accordingly our NEO compensation program is designed to be largely performance driven. At our 2013 Annual Meeting of Stockholders, the Company&#146;s stockholders approved the compensation of our NEOs (on an advisory
basis) by 99.7% of total votes cast, indicating that our stockholders were in agreement with our Executive Compensation Committee and its direction of setting compensation arrangements based on thresholds that are in line with the goals of our
stockholders. In order to further align the compensation program for our NEOs with those of our stockholders, in 2013 the Executive Compensation Committee engaged POE Group as an independent compensation consultant to evaluate the terms of our NEO
compensation programs as they relate to creating stockholder value as well as remaining competitive in the marketplace with the changing trends in NEO compensation. The results of their analysis and changes to compensation as a result of that review
are discussed further in this proxy in the section titled &#147;2014 Developments&#148;. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>2013 Business Highlights </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">2013 was another year of strong growth and progress on many strategic fronts for Meritage Homes. We improved across all of our key performance
indicators and were recognized for our industry leadership in several important areas. Below is a summary of some of the significant accomplishments achieved in 2013. </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">We grew total home closing revenue by 51% over 2012. </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">29</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;COMPENSATION&nbsp;DISCUSSION&nbsp;AND&nbsp;ANALYSIS&nbsp;&nbsp;&nbsp;</B></FONT></TD>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Rising prices drove our home closing gross margin to an eight-year high of 22% for the year, increasing home closing gross margins by 360 basis points.
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Pre-tax earnings grew by a multiple of six times over 2012, and 2013 net earnings of $124 million were the third highest in our history.
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Net orders for the year increased 17% in 2013 over 2012, and total order value increased 40% year over year, aided by a 20% increase in average sales prices.
</FONT></P></TD></TR></TABLE>
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<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The total value of orders in backlog at year-end 2013 was 43% higher than the prior year&#146;s ending backlog. </FONT></P></TD></TR></TABLE>
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<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">We broadened our geographic footprint by acquiring a highly-respected local builder in the Nashville market, entering our fourth new market since 2011.
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">We expanded our total active community count to 188 at year-end, 19% more than at year-end 2012. </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">With key market drivers indicating a high probability for continued growth in the housing market, we invested approximately $565 million in land and
development, contracted for approximately 11,200 new lots during the year, and ended with approximately a five-year supply of 25,700 total lots under control. </FONT></P></TD></TR></TABLE>
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<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">We raised additional capital in 2013 and early 2014 to ensure that Meritage has sufficient liquidity to continue to grow while maintaining a strong balance
sheet. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px;padding-bottom:0px; " ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Since Meritage committed to building every home to meet or exceed ENERGY STAR<FONT
STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">&reg;</SUP></FONT> standards, the Environmental Protection Agency has recognized Meritage as an ENERGY STAR Partner of the Year every year since
2010. In 2013, Meritage received its prestigious Partner of the Year for Sustained Excellence Award in recognition of our ongoing industry leadership in advancing energy-efficient building standards. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">In addition to the financial and operational successes Meritage Homes experienced in 2013, the Company also enjoyed successes in establishing itself
as a company that gives back and has been recognized for such efforts. In 2013, Meritage partnered with Operation Homefront to provide newly-built mortgage-free homes to three military families through its <I>Homes on the Homefront</I> program. In
addition, Meritage employees donated thousands of man-hours and tens of thousands of dollars in support of Make-A-Wish Foundation, Ronald McDonald House, Salvation Army, Desert Mission Food Bank and many other local and national charitable
organizations, which we will continue to support through the <I>Meritage Cares</I> Foundation. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">As mentioned, our executive compensation
program is designed to be driven with a focus on pay-for-performance. More than half of our executives&#146; compensation is determined on various performance metrics that are tied to Meritage&#146;s operational goals. While overall NEO compensation
has increased over the last several years, it has done so at a significantly slower pace than the overall improvement of the Company. The following graph illustrates CEO compensation as it relates to the improving performance of the Company.
</FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center">


<IMG SRC="g680825g92a42.jpg" ALT="LOGO">
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Before deduction of CEO total compensation (as reflected in the Summary Compensation Table). </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">30</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;COMPENSATION&nbsp;DISCUSSION&nbsp;AND&nbsp;ANALYSIS&nbsp;&nbsp;</B></FONT></TD></TR></TABLE></DIV>
<p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B><A NAME="toc680825_17"></A>Compensation Philosophy and Objectives </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Our executive compensation program is
designed to drive and reward superior corporate performance both annually and over the long term while simultaneously striving to be externally competitive. We continually review our executive compensation program to ensure it reflects good
governance practices and is in the best interests of stockholders, while meeting the following core objectives: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Pay for Performance
</B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">A substantial portion of the total potential compensation for each NEO is intended to be variable on a pay-for-performance basis.
The terms of the performance-based compensation contemplated in each NEO&#146;s employment agreement was based upon an assessment of external market data to ensure that the compensation formula is competitive relative to the compensation paid by
companies with which we compete for executive talent. This compensation is derived based on (i)&nbsp;the performance of the Company as a whole, as measured against our peer group and (ii)&nbsp;the officer&#146;s role in the attainment of the
Company&#146;s performance. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Stock Ownership </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">We are committed to utilizing our compensation program to increase executive stock ownership over time. We believe that equity ownership directly aligns the interests of our executives with those of our
stockholders and helps to focus our executives on long-term stockholder value creation. We award restricted stock and restricted stock units to our NEOs as we believe such awards provide our NEOs with an incentive to continue to increase long-term
stockholder value, even during periods of declining stock prices. We believe the granting of equity awards is an important retention tool and is widely used in our industry. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Recruiting and Retention </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Due to the competitive nature of our industry, we are
committed to providing total compensation opportunities that are competitive with, though not identical to, the practices of other large public homebuilders in our industry. We intend for our compensation program to be sufficiently aligned with
industry practices so that we can continue to attract and retain outstanding executives who are motivated to help us achieve our mission. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Compensation Peer Group </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">We
compete with homebuilding companies of various sizes for executive talent, and therefore the Compensation Committee generally reviews composite market data reflecting the market median compensation paid to executives with similar roles. On an
informal basis, the Company reviews the compensation of its NEOs and compares it to industry peers, analyzing the relationship of the relative amounts of the components of compensation (e.g., salary, bonus, equity compensation and other
compensation) to the relative size of each peer company&#146;s revenues, assets and equity. For the past several years, the peer group has been comprised of the top public homebuilders and for the current year was comprised of <I>Beazer Homes USA,
Inc., D.R. Horton, Inc., Hovnanian Enterprises, Inc., KB Home, Lennar Corporation, M.D.C. Holdings, Inc., M/I Homes, Inc., NVR, Inc., PulteGroup, Inc., The Ryland Group Inc., Standard Pacific Corp. and Toll Brothers, Inc.</I> </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Our analysis is used as an overall reasonableness check on the types and levels of compensation paid to our executive officers to ensure that the
pay of our NEOs is not excessive, nor too low as to not be deemed a sufficient tool to attract and maintain key talent. The analysis is completed on a retrospective basis and as such, it is used as a guide for our Compensation Committee in setting
reasonable future compensation levels and benefits. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The 2013 analysis included a percentile ranking of the Company&#146;s NEOs&#146;
compensation as compared to the peer group&#146;s NEOs as well as a mathematical computation of predicted compensation assuming the relationship between compensation and revenue, assets or equity derived from the peer group is applied to Meritage
Homes&#146; financial results. Our analysis is informal in nature and is not by itself used to specifically set any particular element of compensation (whether salary, bonus, equity compensation, or otherwise) or compensation targets. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">While market data is an important factor considered by the Compensation Committee when setting compensation, it is only one&nbsp;of
multiple factors, and the amount paid to each executive may be more or less than the composite market predicted value based on the performance of the Company and the executive, the roles and responsibilities of the executive, experience level of the
individual, internal equity and other factors that the Compensation Committee deems important. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">31</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;COMPENSATION&nbsp;DISCUSSION&nbsp;AND&nbsp;ANALYSIS&nbsp;&nbsp;&nbsp;</B></FONT></TD>
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<TD VALIGN="top"></TD></TR></TABLE> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B><A NAME="toc680825_18"></A>Compensation Best
Practices </B></FONT></P> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The best
practices evidenced by our compensation programs and processes include: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top" COLSPAN="3" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">WE DO</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">WE DO NOT</FONT></P></TD></TR>
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<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#252;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="2">Require a significant portion of the total compensation of our NEOs is determined based on performance tied to strategic objectives.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
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<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I></I></FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="2">Provide perquisites for our NEOs other than those limited to auto allowance, reimbursement of certain insurance premiums and other limited
benefits.</FONT></TD></TR>
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<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#252;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="2">Have executive Stock Ownership Guidelines in place set at a multiplier of base salary.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I></I></FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="2">Reprice or replace stock options and other equity awards.</FONT></TD></TR>
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<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#252;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="2">Have clawback policy permitting the recoupment of incentive bonuses in the event of a restatement of financial results.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I></I></FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="2">Allow hedging, as we have a policy that prohibits entering into any contract or instrument designed to hedge or offset any decrease in the market value
of Meritage stock.</FONT></TD></TR>
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<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#252;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="2">Require the Executive Compensation Committee to be composed of independent Directors.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I></I></FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="2">Allow pledging, as we have a policy prohibiting Directors and NEOs from pledging Meritage stock as collateral for a loan, subject to certain limited
grandfather provisions.</FONT></TD></TR>
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<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#252;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="2">The Compensation Committee retained POE Group Inc. (&#147;POE Group&#148;) as its independent executive compensation consultant.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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</TABLE> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Our executive compensation policies and practices are designed to align our NEOs&#146; long-term interests with
those of our stockholders via a pay-for-performance model. The charts below depict the 2013 percentage of compensation for our CEO and other NEOs that is fixed versus performance-based: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<IMG SRC="g680825g12n97.jpg" ALT="LOGO">
</B></TD></TR>
</TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2">*</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Inclusive of performance-based restricted stock awards and annual non-equity incentive compensation. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B><A NAME="toc680825_19"></A>Compensation Program and Payments </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The key components of our executive
compensation program are base salary, annual incentive compensation and long-term incentive compensation. In addition, our NEOs have the opportunity to participate in our company-wide 401(k) plan, a deferred compensation plan, and to receive certain
personal benefits, as described below. The employment agreements of our CEO and other NEOs are further described in this proxy under the section &#147;&#151;Employment Agreements in Effect for 2013&#148;. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">At the 2013 Annual Stockholder meeting, our stockholders overwhelmingly supported our compensation program with 99.7% of total votes cast. In
addition, we periodically solicit feedback from our largest stockholders, which has been generally positive and supportive of our compensation programs. The Compensation Committee considered the 2013 voting results in connection with
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">32</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


<p Style='page-break-before:always'>
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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;COMPENSATION&nbsp;DISCUSSION&nbsp;AND&nbsp;ANALYSIS&nbsp;&nbsp;</B></FONT></TD></TR></TABLE></DIV>
<p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">
its 2013 and 2014 compensation decisions and hired POE Group, which provided the following services for the Compensation Committee during 2013: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="2%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">evaluated our executive officers&#146; base salary, annual incentive and long-term incentive compensation, and total direct compensation relative to the
competitive market; </FONT></P></TD></TR></TABLE>
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<TD WIDTH="2%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">advised the Compensation Committee on executive officer target award levels within the annual and long-term incentive program and, as requested, on actual
compensation actions; </FONT></P></TD></TR></TABLE>
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<TD WIDTH="2%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">advised on changes to the design of our 2014 annual and long-term incentive plans, described in &#147;Compensation Discussion&nbsp;&amp; Analysis&#148;;
</FONT></P></TD></TR></TABLE>
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<TD WIDTH="2%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">briefed the Compensation Committee on executive compensation trends among our peers and the broader industry; </FONT></P></TD></TR></TABLE>
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<TD WIDTH="2%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">evaluated our non-employee director compensation levels and program relative to the competitive market; </FONT></P></TD></TR></TABLE>
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<TD WIDTH="2%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">provided tally sheets detailing total compensation for 2013, equity and deferred compensation gains for 2013, and severance payouts for change in control; and
</FONT></P></TD></TR></TABLE>
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<TD WIDTH="2%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">assisted with the preparation of the Compensation Discussion and Analysis for this proxy statement. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:11px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">After consultation with POE Group, we have implemented changes to the compensation program to further align our NEO compensation packages with
moving trends within the industry as detailed in the &#147;&#151;2014 Developments&#148; section of this proxy statement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Base
Salary </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The purpose of the base salary is to provide a fixed amount of cash compensation that is not variable and is generally
competitive with market practices. Consistent with industry practice and our pay-for-performance objective, the base salary for each of our NEOs is designed to account for only a portion of their overall target compensation. As compared to our
compensation peer group, we target our NEO salaries to be commensurate with other public homebuilders. We believe the NEO base salaries are appropriate based on the officers&#146; roles, responsibilities, experience and contributions to the company,
as well as market data. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Annual Incentive Compensation </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">In accordance with the terms of each NEO&#146;s employment agreement, each NEO is eligible for annual incentive compensation. As compared to our peer group, we target our NEO incentive compensation to be
commensurate with other public homebuilders. The annual incentive compensation is designed to generally comply with the requirements of Section&nbsp;162(m) of the Code to allow for the tax deductibility of incentive compensation paid to our NEOs.
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">We believe investors within the public homebuilder industry look to several key financial metrics when valuing companies. These metrics
include EBITDA (adjusted for non-recurring items), return on assets and return on equity. We believe these metrics are readily accepted by the capital markets and investment communities as key measures of a company&#146;s performance. The
Compensation Committee previously concluded that the combination of these metrics sets an optimal incentive program for our NEOs and aligns their interests with our stockholders. The Company believes that the use of these metrics together results in
an appropriate and acceptable balance between operating results (adjusted EBITDA), balance sheet and capital resource management (return on assets and return on equity). For our NEOs, we have structured the 2013 cash incentive component of their
compensation to result in the possible award of a percentage of the Company&#146;s Adjusted EBITDA, as defined below. In 2013, the level of cash incentive award was based on pre-determined annual targets of return on assets and return on equity. The
adjusted EBITDA percentages used to calculate the percentage of bonus to be paid were at 0.825%, 0.200%, 0.150% and </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">33</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<h5 align="left"><a href="#toc">Table of Contents</a></h5>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;COMPENSATION&nbsp;DISCUSSION&nbsp;AND&nbsp;ANALYSIS&nbsp;&nbsp;&nbsp;</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR></TABLE> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">
0.325% for Messrs. Hilton, Seay, White and Davis, respectively, for each of the return on assets and return on equity targets. Attainment of the goals was benchmarked internally as follows for
2013: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD></TD></TR>


<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>BENCHMARKS FOR 2013 ANNUAL INCENTIVE COMPENSATION:</B></FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:1px"><FONT SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>% of Budgeted Target
Achieved<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP></B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Percent&nbsp;of&nbsp;NEO&nbsp;annual&nbsp;incentive&nbsp;award&nbsp;as<BR>determined by adjusted
EBITDA<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(2)</SUP></B></FONT></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-left:1.00em; text-indent:-1.00em" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">&gt;90%</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">100%</FONT></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="top" ALIGN="center" BGCOLOR="#eaebf0"> <P STYLE="margin-left:1.00em; text-indent:-1.00em" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">80-89%</FONT></P></TD>
<TD VALIGN="bottom" BGCOLOR="#eaebf0"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" BGCOLOR="#eaebf0"><FONT STYLE="font-family:ARIAL" SIZE="1">80%</FONT></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-left:1.00em; text-indent:-1.00em" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">70-79%</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">60%</FONT></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="top" ALIGN="center" BGCOLOR="#eaebf0"> <P STYLE="margin-left:1.00em; text-indent:-1.00em" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">60-69%</FONT></P></TD>
<TD VALIGN="bottom" BGCOLOR="#eaebf0"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" BGCOLOR="#eaebf0"><FONT STYLE="font-family:ARIAL" SIZE="1">40%</FONT></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-left:1.00em; text-indent:-1.00em" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">50-59%</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">20%</FONT></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="top" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000" BGCOLOR="#eaebf0"> <P STYLE="margin-left:1.00em; text-indent:-1.00em" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">Below 50%</FONT></P></TD>
<TD VALIGN="bottom" BGCOLOR="#eaebf0" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000" BGCOLOR="#eaebf0"><FONT STYLE="font-family:ARIAL" SIZE="1">zero</FONT></TD></TR>
</TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="17%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Based on targets of return on assets and return on equity as established by the annual budget that is approved by the Board. </FONT></P></TD>
<TD WIDTH="17%"><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE>
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<TD WIDTH="17%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(2)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">One half of calculation applies to return on assets, remaining half applies to return on equity. Where actual results fall between the thresholds set forth
above, payments will be interpolated along a linear continuum from the threshold exceeded to the next highest threshold. </FONT></P></TD>
<TD WIDTH="17%"><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>ACTUAL RESULTS AS COMPARED TO BENCHMARK FOR 2013 ANNUAL INCENTIVE COMPENSATION: </B></FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="bottom" WIDTH="7%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="7%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="7%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="7%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000">&nbsp;<FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="14" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Named Executive Officer</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B><U>Steven&nbsp;J.&nbsp;Hilton</U></B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B><U>Larry&nbsp;W.&nbsp;Seay</U></B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B><U>C.&nbsp;Timothy&nbsp;White</U></B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B><U>&nbsp;&nbsp;Steven&nbsp;M.&nbsp;Davis</U>&nbsp;&nbsp;</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Actual Results</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="14" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Bonus as a Percentage of Adjusted EBITDA</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Company&#146;s Return on Assets</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">2013 Budget</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">7.30</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">7.30</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">7.30</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">7.30</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">2013 Actual</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">9.88</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">9.88</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">9.88</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">9.88</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">NEO Payout %</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">0.8250</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">0.2000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">0.1500</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">0.3250</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">NEO Payout $</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2,045,141</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">495,792</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">371,844</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">655,662</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Company&#146;s Return on Equity</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">2013 Budget</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">16.38</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">16.38</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">16.38</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">16.38</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">2013 Actual</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">23.43</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">23.43</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">23.43</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">23.43</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">NEO Payout %</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">0.8250</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">0.2000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">0.1500</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">0.3250</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">NEO Payout $</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2,045,141</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">495,791</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">371,844</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">655,661</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Company&#146;s actual return on assets and return on equity exceeded the benchmarks set, accordingly, each NEO
qualified for payment of 100% of the calculated amount.&nbsp;In accordance with the terms of the Incentive Plan and each NEO&#146;s employment agreement, the Compensation Committee has complete discretion to reduce the amount of the annual cash
incentive compensation based on any factors it deems appropriate or relevant.&nbsp;Although Mr.&nbsp;Davis qualified for payment of 100% of the calculated amount, the Compensation Committee exercised its discretion to reduce Mr.&nbsp;Davis&#146;
aggregate annual incentive compensation award amount for 2013 by approximately $300,000.&nbsp;The amounts listed in the table above for Mr.&nbsp;Davis reflect this reduced amount.&nbsp;The Compensation Committee&#146;s decision to exercise its
discretion to reduce Mr.&nbsp;Davis&#146; annual incentive compensation award for 2013 resulted from the Company&#146;s insufficient progress towards improving certain operational metrics that the Board identified as important and charged
Mr.&nbsp;Davis with the responsibility for implementing.</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">When determining the amount (or exclusion) of bonus and incentive compensation
to be paid for 2013, the Compensation Committee reviewed and considered the following information: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">feedback from the full Board of Directors (excluding the CEO) regarding the performance of the CEO for 2013, </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">the financial and stock performance of the Company, comparable public companies and other companies in our industry with which we compete, including the total
relative stockholder return of our Company and our competitors, and </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">feedback from the CEO supporting the bonus and incentive compensation to be paid to each NEO (other than the CEO), based on achieving their specified goals
and their personal and departmental contributions to the Company. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">34</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="70%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE">

<TR>
<TD WIDTH="9%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="17%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="17%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="17%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="36%"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom" BGCOLOR="#32406b"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;COMPENSATION&nbsp;DISCUSSION&nbsp;AND&nbsp;ANALYSIS&nbsp;&nbsp;</B></FONT></TD></TR></TABLE></DIV>
<p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">For purposes of determining the executives&#146; formula bonuses,
&#147;Adjusted EBITDA&#148; means earnings before interest expense and interest amortized to cost of sales, taxes, depreciation and amortization (&#147;EBITDA&#148;) adjusted to exclude impairments, one-time bond, refinancing and offering costs and
significant litigation settlement payments by the Company and similar costs associated with one-time extraordinary events as well as the deductions relating to the compensation of the Company&#146;s Chief Executive Officer, Chief Financial Officer,
Chief Operating Officer and General Counsel. As discussed below, the Executive Compensation Committee does from time to time award discretionary bonuses for additional efforts or achievements. Also, each NEO&#146;s employment agreement provides that
the Executive Compensation Committee has complete discretion to reduce the amount of the annual cash incentive bonus compensation based on any factors it deems appropriate or relevant. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The specific details of each NEO&#146;s 2013 incentive compensation are further described under the section &#147;&#151;Employment Agreements in
Effect for 2013&#148;. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Discretionary Bonuses </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">There were no discretionary bonuses awarded in 2013. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Long-Term Incentive Awards </B></FONT></P>
<P STYLE="margin-top:10px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Long-term incentives are intended to provide compensation opportunities based on the creation of stockholder value and an increase in our stock
price. The upside potential of stock option awards will be realized by the NEOs only if our stock price performance improves over the vesting period and/or the term of the awards. Historically, stock options granted to our NEOs generally have had a
five-year pro-rata vesting schedule and a seven-year term. Commencing in 2007, we began awarding our NEOs restricted stock awards as part of our total equity compensation structure. In addition, starting in 2009, we began granting performance-based
restricted stock awards to our NEOs, as further discussed below. The restricted stock and performance-based restricted stock awards generally have a three-year cliff vesting schedule. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">In connection with our equity awards, we have also adopted equity ownership requirements as further discussed below in the section
&#147;&#151;Security Ownership Requirements.&#148; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Executive Compensation Committee believes that equity awards provide a strong
long-term incentive for our NEOs (and other officers and employees) that, along with their stock ownership, help to align the interests of management with our stockholders. The Compensation Committee believes that these equity-based awards provide
the opportunity for our executives to benefit from strong equity performance and, particularly in the case of the restricted stock and restricted stock unit awards, the NEOs focus on balancing stability and preservation of the stock value against
being incentivized to potentially take on an imprudent level of additional risk to drive stock appreciation with more contingent equity awards such as stock options. The Company and the Compensation Committee also believe that an appropriate mix of
cash compensation and non-cash compensation in the form of equity awards is necessary and appropriate because, among other reasons, equity-based awards do not require the use of our working capital. The Compensation Committee is mindful of the fact
that equity awards represent an expense under generally accepted accounting principles and a cost to the Company and its stockholders in the form of dilution. Accordingly, we seek to achieve an appropriate balance between cash and non-cash
compensation such that management is appropriately incentivized, our working capital and financial results are minimally affected and our stockholders do not experience undue dilution. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Other Compensation </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Compensation Committee does not believe in the
extensive use of perquisites as a component of executive compensation. The Compensation Committee believes that the perquisites provided to our NEOs (above those received by all employees or officers in general) are limited, but help maintain the
competitiveness of our compensation package as compared to our peer companies. The types of perquisites we provide to our NEOs generally consist of car allowances, and enhanced life and disability or long-term care insurance. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Tax Considerations </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Section&nbsp;162(m) of the Code limits the deductibility of executive compensation paid by publicly held corporations to $1 million for each NEO.
The $1 million limitation generally does not apply to compensation that is paid pursuant to a performance-based plan approved by stockholders. Our policy is to comply with the requirements of Section&nbsp;162(m) and generally maintain deductibility
for executive compensation, although we reserve the right, as do most public companies, to make non-deductible payments where we determine it is in the best interests of Meritage and its stockholders. </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">35</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;COMPENSATION&nbsp;DISCUSSION&nbsp;AND&nbsp;ANALYSIS&nbsp;&nbsp;&nbsp;</B></FONT></TD>
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<TD VALIGN="top"></TD></TR></TABLE> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">At the 2006 Annual Meeting of
Stockholders, our stockholders approved the Incentive Plan. The purpose of the Incentive Plan is to provide for annual incentive awards to the Company&#146;s key executives, including the NEOs, and it is the vehicle through which we pay our cash
performance bonuses. The Incentive Plan is administered by the Compensation Committee and provides for cash awards payable to executives upon the attainment of certain predetermined performance goals for the Company. It is our intent that
performance-based awards made pursuant to the Incentive Plan qualify as deductible compensation under Section&nbsp;162(m) of the Code. Our stockholders reapproved the Incentive Plan at the 2010 Annual Meeting, and we are again seeking shareholder
approval at this year&#146;s 2014 Annual Meeting of Stockholders of the performance criteria under our Incentive Plan and to extend the plan through February 2019. See &#147;Amendment to and Extension of our Executive Management Incentive Plan
(Proposal 5).&#148; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The current employment agreement for our CEO contemplates the payment of a base salary and benefits that will likely
exceed the limitations provided for under Section&nbsp;162(m). We do not, however, expect that we will incur a Section&nbsp;162(m) excess resulting in a lost tax deduction that is material. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="4"><B><A NAME="toc680825_20"></A>Security Ownership Requirements </B></FONT></P> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">In 2006, we adopted security ownership requirements for our directors and certain executive officers. The Board of Directors believes that these
guidelines align the interests of our directors and executive officers with those of stockholders. Our directors and executive officers are required to comply with the following ownership guidelines: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Directors, three times annual director fees (exclusive of committee or lead director fees), </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">CEO, four times base salary, and </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">COO, CFO and General Counsel, one times base salary </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">In the case of the appointment of a new executive officer or director, such person is expected to comply with the requirements within three years of the date of appointment. In order to enable our directors and
officers to prudently manage their personal financial affairs, our policy provides that once compliance is obtained, subsequent changes in stock price will not affect the person&#146;s compliance with the guidelines. For purposes of the security
ownership requirement, stock options and non-vested restricted stock are not considered owned. As of December&nbsp;31, 2013, all officers and directors were in compliance with their respective security ownership requirements. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B><A NAME="toc680825_21"></A>Stock Options and Other Equity-Based Awards </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Meritage has traditionally granted
equity-based awards to directors, senior executive officers and other employees to provide a means for incentive compensation and to align the interests of management with the interest of Meritage&#146;s stockholders. In 2007, the Company began to
grant restricted stock awards to select employees and since 2009, all equity awards company-wide have been comprised of restricted stock and, since 2014, restricted stock units, as a means of providing sufficient incentive compensation, bringing it
more in line with industry trends. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">We have comprehensive policies relating to the granting of stock options and other equity-based
awards. Following is a summary of key aspects of our policies: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">All equity-based awards (&#147;stock-based grants&#148;) must be approved by the Compensation Committee. </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">All stock-based grants will be approved at formal meetings (including telephonic) of the Compensation Committee. </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The grant date of such awards will be the date of the meeting (or a specified date shortly after the meeting). </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The annual stock-based grant shall be approved at a regularly scheduled meeting of the Compensation Committee during the first part of the year, but generally
after the annual earnings release. We believe that coordinating the main annual award grant after our annual earnings release will generally result in this grant being made at a time when the public is in possession of all material information about
us. </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The customary annual grant (including performance-based grants) to executive officers and directors shall generally occur approximately at the same time as
the customary annual grant to other employees. </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Company shall not intentionally grant stock-based awards before the anticipated announcement of materially favorable news or delay the grant of
stock-based awards until after the announcement of materially unfavorable news. </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Compensation Committee will approve stock-based grants only for persons specifically identified at the meeting by management.
</FONT></P></TD></TR></TABLE>
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STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">36</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;COMPENSATION&nbsp;DISCUSSION&nbsp;AND&nbsp;ANALYSIS&nbsp;&nbsp;</B></FONT></TD></TR></TABLE></DIV>
<p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B><A NAME="toc680825_22"></A>Employment Agreements in Effect for 2013 </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">In January 2010, we entered into amended
employment agreements with our CEO and each NEO, and the Compensation Committee negotiated and approved the terms of each of these agreements. Each agreement was scheduled to expire on December&nbsp;31, 2012; however, the automatic one-year
extension renewal provisions continued the agreements for 2013. These renewal provisions extend the terms of the arrangements for one year unless on or before August&nbsp;31 of any renewal term, the executive or the Company notifies the other that
it wishes to terminate the agreement. Each of the employment agreements also includes a claw-back provision requiring the recovery by the Company of all or part of prior bonuses in the event the performance measure used to calculate the bonus is
restated downward as a result of the executive&#146;s willful misconduct or gross negligence. We may recover any such claw-backs through an offset to future awards payable under the employment agreement, or from the executive directly. All NEOs have
non-solicitation covenants, and Mr.&nbsp;Hilton&#146;s agreement also includes a non-compete covenant. In March 2014, we entered into new employment agreements with our CEO and each NEO, and the Compensation Committee negotiated and approved the
terms of these agreements. The changes in the new employment agreements are discussed further in the section under &#147;&#151;2014 Developments&#148;. A description of the other key components of each NEOs agreement in effect for 2013 follows.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Steven J. Hilton, CEO </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">Mr.&nbsp;Hilton&#146;s agreement provided Mr.&nbsp;Hilton with a base salary of $1,017,500 per year. This agreement also provided that Mr.&nbsp;Hilton is entitled to payment of, or reimbursement for, amounts paid
to purchase a $5 million term life insurance policy and disability and/or long-term care insurance providing for a monthly benefit up to $20,000, use of a chartered airplane for business purposes only, and use of a Company-provided automobile.
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Mr.&nbsp;Hilton&#146;s agreement also provided for an annual cash incentive bonus based on the Company&#146;s attainment of defined
performance objectives as outlined in the matrix on page 34. Mr.&nbsp;Hilton&#146;s employment agreement also contemplated that he will receive an annual award of a minimum of 50,000 shares of restricted stock (or such equivalent number of shares
subject to full value awards as the Compensation Committee determines in its discretion). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Larry W. Seay, Executive Vice President
and Chief Financial Officer </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Mr.&nbsp;Seay&#146;s agreement provided Mr.&nbsp;Seay with a base salary of $500,000 per year. This
agreement also provided that Mr.&nbsp;Seay is entitled to a $1,200 per month automobile allowance, payment of, or reimbursement for, amounts paid to purchase disability and/or long-term care insurance providing for a monthly benefit up to $20,000
and a $3 million term life insurance policy. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Mr.&nbsp;Seay&#146;s agreement also provided for an annual cash incentive bonus based on
the Company&#146;s attainment of defined performance objectives as outlined in the matrix on page 34. Mr.&nbsp;Seay&#146;s employment agreement also contemplated that he will receive an annual option grant to acquire a minimum of 36,667 shares of
Company stock at an exercise price equal to fair market value on date of grant (or such equivalent number of shares subject to full value awards as the Compensation Committee determines in its discretion). </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>C. Timothy White, Executive Vice President, General Counsel and Secretary </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Mr.&nbsp;White&#146;s agreement provided for a base salary of $525,000 per year. This agreement also provided that Mr.&nbsp;White is entitled to a
$1,200 per month automobile allowance, payment of, or reimbursement for, amounts paid to purchase disability and/or long-term care insurance providing for a monthly benefit up to $20,000 and a $3 million term life insurance policy. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Mr.&nbsp;White&#146;s agreement also provided for an annual cash incentive bonus based on the Company&#146;s attainment of defined performance
objectives as outlines in the matrix on page 34. Mr.&nbsp;White&#146;s employment agreement also contemplated that he will receive an annual option grant to purchase a minimum of 15,000 shares of Company stock at an exercise price equal to the fair
market value on the date of grant (or such equivalent number of shares subject to full value awards as the Compensation Committee determines in its discretion). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Steven M. Davis, Executive Vice President and Chief Operating Officer </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Mr.&nbsp;Davis&#146; agreement provided for a base salary of $500,000 per year. This agreement also provided that Mr.&nbsp;Davis is entitled to a
$1,200 per month automobile allowance, payment of, or reimbursement for, amounts paid to purchase disability and/or long-term care insurance providing for a monthly benefit up to $20,000 and a $3 million term life insurance policy. </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">37</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


<p Style='page-break-before:always'>
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<h5 align="left"><a href="#toc">Table of Contents</a></h5>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;COMPENSATION&nbsp;DISCUSSION&nbsp;AND&nbsp;ANALYSIS&nbsp;&nbsp;&nbsp;</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR></TABLE> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Mr.&nbsp;Davis&#146; agreement also
provided for an annual cash incentive bonus based on the Company&#146;s attainment of defined performance objectives as outlined in the matrix on page 34. Mr.&nbsp;Davis&#146; employment agreement also contemplated that he will receive an annual
option grant to purchase a minimum of 15,000 shares of Company stock at an exercise price equal to the fair market value on the date of grant (or such equivalent number of shares subject to full value awards as the Compensation Committee determines
in its discretion). </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B><A NAME="toc680825_23"></A>Discussion of CEO and NEO Compensation </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Following is a discussion of the
compensation paid, awarded or earned in 2013 to the Company&#146;s CEO and NEOs. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">As described below, since 2009, the Company conditioned
some of its restricted stock award grants to NEOs on the achievement of performance criteria, specifically Adjusted Pre-Tax Income and G&amp;A expenses being within a specified range and achievement of a certain level of customer service
satisfaction rating. Following is a summary of the key reasons the Compensation Committee selected these metrics: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Adjusted Pre-Tax Income being within a specified range&#151;the Compensation Committee believed that it was important that the executive officers be
accountable for managing the business towards the budget approved by the Board. The Compensation Committee also considered the metrics of revenue and net income, but determined pre-tax income was the most appropriate measure because revenue does not
take into account profitability of our core operations and after-tax net income takes into account factors largely outside the control of management, such as the creation and relief of non-cash deferred tax valuation allowances due to accounting
rules and tax laws. One of the Company&#146;s main goals during the economic downturn during the 2007-2011 period was to return to profitability and we believe Adjusted Pre-Tax Income appropriately measured management&#146;s success in achieving
this goal. </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Adjusted G&amp;A being within a specified range&#151;the Compensation Committee believed that overhead cost control is critical to the success of the Company
and that it is important to hold the executive officers accountable for managing costs within the budget approved by the Board. </FONT></P></TD></TR></TABLE>
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<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Customer service satisfaction rating&#151;the Compensation Committee believed the long-term success of the Company is dependent on delivering quality homes
with excellent customer service. In short, it is a fundamental prerequisite for almost any business to achieve high customer satisfaction. Accordingly, the Committee incorporated a customer service component. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>CEO Compensation </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Mr.&nbsp;Hilton was compensated in 2013 pursuant to the terms of his employment agreement in effect during 2013, which provided for a base salary,
an annual cash incentive bonus based on Company performance, if earned, and other customary executive benefits. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Under this agreement, a
substantial portion of Mr.&nbsp;Hilton&#146;s potential compensation was performance-based to align his goals and efforts with the interests of our stockholders. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2"><I>Salary.</I> Mr.&nbsp;Hilton was paid a base salary of $1,017,500 in 2013. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><I>Restricted Stock.</I>
In 2013, Mr.&nbsp;Hilton was granted an award of 25,000 shares of restricted stock. These shares cliff vest on the third anniversary of the date of grant. Additionally, Mr.&nbsp;Hilton was awarded 25,000 shares of performance-based restricted stock,
which cliff vest only if the following performance criteria are met: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="7%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="13%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="76%"></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Number&nbsp;of</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Shares</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Measurement&nbsp;Date</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Performance Criteria</B></FONT></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">8,334</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">February 13, 2016</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">125% of 2015 Adjusted Pre-Tax Income is greater than budget or 2015 Adjusted Pre-Tax Income is within $9&nbsp;million of budget</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">8,333</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">February 13, 2016</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">2015 Adjusted SG&amp;A expense less than 15% of total revenue</FONT></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">8,333</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">February 13, 2016</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">2015 Customer Service Satisfaction Rating greater than or equal to 80</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The number of shares and type of equity award for the 2013 grant was determined by the Compensation Committee and
was deemed commensurate with compensation packages of other CEOs of public homebuilders when evaluated in connection with Mr.&nbsp;Hilton&#146;s total cash and equity compensation as discussed previously in this proxy statement. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">38</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <DIV ALIGN="right">
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<TD WIDTH="36%"></TD></TR>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="bottom" BGCOLOR="#32406b"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;COMPENSATION&nbsp;DISCUSSION&nbsp;AND&nbsp;ANALYSIS&nbsp;&nbsp;</B></FONT></TD></TR></TABLE></DIV>
<p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">In connection with the grant of his 2011 performance-based restricted
stock, which was earned in 2013 and vested in early 2014, the following analysis was completed: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Company&#146;s Adjusted Pre-Tax Income was $229.1 million, which was within $9.0 million of budget and, when multiplied by 125%, was greater than budget.
Therefore, this performance trigger was met, releasing 6,250 shares of performance-based stock. The budget for Adjusted Pre-Tax Income was $117.5 million for 2013. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Company&#146;s 2013 Adjusted G&amp;A expense was $218.3 million, which was less than 15% of total revenue. This performance trigger was met, releasing
6,250 shares of performance-based restricted stock. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Company&#146;s 2013 Customer Service Satisfaction Rating exceeded 80. This performance trigger was met, releasing 6,250 shares of performance-based
restricted stock. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Accordingly, Mr.&nbsp;Hilton received 18,750 shares of the Company&#146;s common stock on
February&nbsp;9, 2014. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><I>Performance-Based Bonus.</I> For 2013, Mr.&nbsp;Hilton received a cash performance-based bonus of $4,090,282,
pursuant to the terms set forth in his employment agreement as outlined on page 33 in this proxy statement. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><I>Other Benefits.</I> The
Company also provided to Mr.&nbsp;Hilton other benefits consistent with our normal executive employment arrangements. These benefits are detailed in the All Other Compensation Table included in this proxy statement and in 2013 totaled less than
$39,000. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Other NEO Compensation </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">Following is a discussion of compensation paid during 2013 to the other NEOs named in this proxy statement. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">Messrs. Seay, White and Davis were compensated in 2013 pursuant to the terms of their respective prior employment agreements in effect during 2013, which provided for a base salary, a bonus based on Company
performance, if earned, and other customary executive benefits. Under these agreements, a substantial portion of the NEOs&#146; potential compensation is performance-based to align their goals and efforts with the interests of our stockholders.
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><I>Salary.</I> Messrs Seay, White and Davis were paid base salaries of $500,000, $525,000 and $500,000, respectively, in 2013.
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><I>Restricted Stock.</I> In 2013, Messrs. Seay, White and Davis were each granted an award of 12,500 shares of restricted stock. These
shares cliff vest on the third anniversary of the date of grant. Additionally, Messrs. Seay, White and Davis were awarded 12,500 shares each of performance stock, which also cliff vest only if the following performance-based restricted criteria are
met. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="7%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="13%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="76%"></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Number&nbsp;of</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Shares</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Measurement&nbsp;Date</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Performance Criteria</B></FONT></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">4,167</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">February&nbsp;13,&nbsp;2016</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">125% of 2015 Adjusted Pre-Tax Income is greater than budget or 2015 Adjusted Pre-Tax Income is within $9&nbsp;million of budget</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">4,167</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">February 13, 2016</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">2015 Adjusted SG&amp;A expense less than 15% of total revenue</FONT></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">4,166</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">February 13, 2016</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">2015 Customer Service Satisfaction Rating greater than or equal to 80</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The number of shares and type of equity award for the 2013 grant was determined by the Compensation Committee and
was deemed commensurate with compensation packages of other NEOs of public homebuilders when evaluated in connection with Messrs. Seay, White, and Davis total cash and equity compensation as discussed previously in this proxy statement. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">In connection with the grant of their 2011 performance-based restricted stock, which was earned in 2013 and vested in early 2014, the following
analysis was completed: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Company&#146;s Adjusted Pre-Tax Income was $229.1 million, which was within $9.0 million of budget and, when multiplied by 125%, was greater than budget.
Therefore, this performance trigger was met, releasing 4,167 shares of performance-based stock shares. The budget for Adjusted Pre-Tax Income was $117.5&nbsp;million for 2013. </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Company&#146;s 2013 Adjusted G&amp;A expense was $218.3 million, which was less than 15% of total revenue. This performance trigger was met, releasing
4,167 shares of performance-based stock. </FONT></P></TD></TR></TABLE>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Company&#146;s 2013 Customer Service Satisfaction Rating exceeded 80. This performance trigger was met, releasing 4,166 shares of performance-based stock.
</FONT></P></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Accordingly, Messrs. Seay, White and Davis each received 12,500 shares of the Company&#146;s common stock on
February&nbsp;9, 2014. </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">39</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<h5 align="left"><a href="#toc">Table of Contents</a></h5>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;COMPENSATION&nbsp;DISCUSSION&nbsp;AND&nbsp;ANALYSIS&nbsp;&nbsp;&nbsp;</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="top"></TD></TR></TABLE> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><I>Performance-Based Bonus.</I> For
2013, Messrs. Seay, White and Davis received cash performance-based bonuses of $991,583, $743,688, and $1,311,323, respectively, pursuant to the terms set forth in their respective employment agreements as discussed previously in this proxy
statement. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><I>Other Benefits.</I> We also provided to Messrs. Seay, White and Davis other benefits consistent with our normal executive
employment arrangements and his employment agreement. These benefits are detailed in the All Other Compensation Table included in this proxy statement and in 2013 totaled less than $59,000, $58,000, and $51,000, respectively. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B><A NAME="toc680825_24"></A>2014 Developments </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">During 2013, the Compensation Committee
undertook a holistic review of the executive compensation program with the assistance of our independent compensation consultant, POE Group. The program was analyzed with respect to the following strategic principles: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Alignment with key outcomes of our business strategies; </FONT></P></TD></TR></TABLE>
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<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The appropriate balance of short- and long-term incentive award opportunity; </FONT></P></TD></TR></TABLE>
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<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Provision of market-competitive total compensation opportunity within our industry and peer group; </FONT></P></TD></TR></TABLE>
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<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Appropriate alignment with our stockholders by delivering a significant percentage of total compensation opportunity through equity;
</FONT></P></TD></TR></TABLE>
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<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Provision of performance criteria where a significant percentage of total compensation is at risk; </FONT></P></TD></TR></TABLE>
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<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Transparency in the communication of plan design and performance goals to enhance understanding; and </FONT></P></TD></TR></TABLE>
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<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Adherence to sound governance practices, including the prudent management of compensation risk. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Based on the results of the analysis, effective January&nbsp;1, 2014, we have adopted modifications to our NEO compensation program, including
changes to both our annual non-equity incentive plan and long-term incentive compensation plans as outlined below. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Non-Equity
Incentive Plan </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2">The non-equity incentive plan will have three primary performance measures: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2">1.</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Targeted EBITDA as adjusted for specific and pre-determined items (adjusted EBITDA); </FONT></P></TD></TR></TABLE>
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<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2">2.</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Targeted number of home closings; and </FONT></P></TD></TR></TABLE>
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<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2">3.</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Targeted customer satisfaction rating as determined by our third party rating agency. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">These performance measures may be weighted differently for each NEO based on their direct and individual contributions to the respective metrics.
For each of the three primary performance measures noted above, our Compensation Committee has specified: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">A threshold level of achievement below which no incentives will paid; </FONT></P></TD></TR></TABLE>
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<TD WIDTH="2%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">A target level of achievement associated with a market-competitive incentive award; and </FONT></P></TD></TR></TABLE>
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<TD WIDTH="2%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">A maximum level of achievement above which incentives will not increase (payout ceiling). </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">In addition to the three company-based measures that apply to all NEOs, our new program may also consider individual performance for certain
executive positions as appropriate. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">We believe these changes to our non-equity incentive plan focus our NEO team on the most important
short-term measures of our business, establish a clear connection between performance and earned compensation, and provide greater transparency to our stockholders as to the operation of our non-equity incentive plan. Each goal represents a fixed
percentage of total potential compensation with each goal assessed separately from the others. The charts below illustrate the maximum non-equity incentive payout amounts at threshold, intermediate, target and maximum levels for 2014 for each NEO
based on the established performance metrics. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">40</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;COMPENSATION&nbsp;DISCUSSION&nbsp;AND&nbsp;ANALYSIS&nbsp;&nbsp;</B></FONT></TD></TR></TABLE></DIV>
<p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="2"><B>Payout based on Attainment of Performance Goals </B></FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Name and Principal Position</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Threshold</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Intermediate</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Target</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Maximum</B></FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Steven J. Hilton,</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">625,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,250,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2,500,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">5,000,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Chairman and CEO</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Larry W. Seay,</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">150,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">300,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">600,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,200,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">EVP and CFO</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>C. Timothy White,</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">150,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">300,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">600,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,200,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">EVP, General Counsel and Secretary</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Steven M. Davis,</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">250,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">500,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,000,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2,000,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">EVP and COO</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The relationship between the level of performance and associated payout with each level is reflected below. Where
actual results fall between the performance levels set forth above, payments will be calculated based on linear interpolation. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


<TR>
<TD WIDTH="47%"></TD>
<TD VALIGN="bottom" WIDTH="9%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="9%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="9%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="9%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000">&nbsp;<FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Below<BR>Threshold</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Threshold</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Intermediate</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Target</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Maximum</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Adjusted EBITDA and Number of Home Closings</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Performance (as % of Goal)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&lt;80</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">80</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">90</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">100</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">110</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Payout as % of Target</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">0</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">25</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">50</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">100</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">200</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Customer Satisfaction Rating</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Performance (as % of Goal)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&lt;88</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">88</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">94</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">100</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">113</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Payout as % of Target</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">0</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">25</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">50</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">100</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">200</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">As indicated, our new program may also consider individual performance. In addition to the company-based
performance measures and payouts as set forth in the tables above, Mr. Davis must meet certain additional operational and financial metrics in order to qualify for the payout amounts set forth above. Accordingly, if Mr. Davis does not achieve one or
more of such additional measures, his 2014 non-equity incentive will be reduced from the amount otherwise payable, up to a maximum reduction of&nbsp;20%. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Long-Term Incentive Awards </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">On February&nbsp;12, 2014, the Board of Directors
approved an amendment to the Current Stock Plan allowing for the awards of restricted stock units. Consistent with our approach in previous years, our long-term incentive awards will continue to consist of two equity delivery vehicles: time-vested
restricted stock units and a performance award plan where 50% of the long-term award opportunity will be provided through a performance-based approach and 50% based on the continued employment for the NEO, subject to acceleration in certain events.
All potential performance-based awards will be paid out in Meritage shares and cliff vest on the third anniversary of the date of grant if the requisite performance measures are attained. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The performance share portion of the long-term incentive awards has three measures: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="2%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2">1.</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Three-year total shareholder return (&#147;TSR&#148;) relative to our peer group (defined below); </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="2%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2">2.</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Achievement of a targeted three-year cumulative earnings per share (&#147;EPS&#148;) goal; and </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="2%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2">3.</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Achievement of a targeted three-year average return on asset (&#147;ROA&#148;) goal. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The payout weighting for TSR, EPS and ROA are 40%, 30% and 30%, respectively, are each assessed separately from the others, and each may be adjusted
for specific and pre-determined items. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Compensation Committee selected these three measures for our long-term incentive awards as
they believe they best align with our current shareholder interests of strong returns, increased profitability per share, and increased efficiency in generating profits from assets. Additionally, the three metrics are assessed from both relative and
absolute measurement approaches providing internal and external performance perspective. Finally, the measures assess performance on a cumulative basis over three years, linking compensation opportunity to performance over an extended period.
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">For each of the three performance share plan measures, our Compensation Committee has specified: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="2%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">A threshold level of achievement below which no incentives will paid; </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="2%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">A target level of achievement associated with a market-competitive incentive award; and </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="2%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">A maximum level of achievement above which incentives will not increase (payout ceiling). </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">41</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="70%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE">

<TR>
<TD WIDTH="36%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="9%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="17%"></TD>
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<TD WIDTH="17%"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;COMPENSATION&nbsp;DISCUSSION&nbsp;AND&nbsp;ANALYSIS&nbsp;&nbsp;&nbsp;</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR></TABLE> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The table below illustrates the
potential share awards through the performance share plan for 2014 at threshold, target and maximum performance levels for each NEO based on the established performance metrics. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="2"><B>Shares Awarded through the Performance Share Plan (1) </B></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


<TR>
<TD WIDTH="45%"></TD>
<TD VALIGN="bottom" WIDTH="8%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="8%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="8%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Name and Principal Position</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000">
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Grant&nbsp;Date&nbsp;Fair&nbsp;Value</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:ARIAL" SIZE="1"><B>(at Target level) ($)</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Threshold<BR>(Shares)&nbsp;(#)</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Target<BR>(Shares)&nbsp;(#)</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Maximum<BR>(Shares)&nbsp;(#)</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Steven J. Hilton,</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,000,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">10,965</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">21,930</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">32,895</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Chairman and CEO</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Larry W. Seay,</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">450,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">4,934</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">9,868</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">14,802</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">EVP and CFO</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>C. Timothy White,</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">425,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">4,660</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">9,320</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">13,980</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">EVP, General Counsel and Secretary</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Steven M. Davis,</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">500,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">5,483</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">10,965</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">16,448</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">EVP and COO</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
</TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Number of shares based on a grant price of $45.60, the closing stock price on the date of grant. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The relationship between the level of performance and the shares awarded with each level is reflected in the table below. Where actual results fall
between the performance levels set forth above, payments will be calculated based on linear interpolation. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


<TR>
<TD WIDTH="56%"></TD>
<TD VALIGN="bottom" WIDTH="6%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD VALIGN="bottom" WIDTH="6%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD WIDTH="15%"></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000">&nbsp;<FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Below<BR>Threshold</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Threshold</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Target</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Maximum</B></FONT></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>EPS and ROA Leverage</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Performance as % of Goal</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&lt;85</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">85</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">100</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">115%&nbsp;or&nbsp;Greater</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Shares Awarded as % of Target</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">0</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">50</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">100</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">150%</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Relative TSR Leverage</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Peer Group Percentile</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&lt;40</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">40</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">50</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1">80% or Greater</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Shares Awarded as % of Target</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">0</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">50</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">100</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">%&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">150%</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">Revised and Expanded Peer Group </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">As a member of the homebuilding industry, we predominantly compete for executive talent and have historically compared ourselves to other companies in our industry. Our previous peer group contained twelve
companies, of which some were larger and some smaller than Meritage in terms of revenue and market capitalization. Since a limited number of homebuilders have revenue and market capitalization similar to ours, the Compensation Committee, with the
assistance of POE Group, revised and expanded the peer group to include fourteen comparably sized companies selected from both the homebuilding and building products industries. The peer group companies fall within the following parameters:
</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="2%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">0.4 times to 2.5 times our revenues, and </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="2%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">0.25 times to 0.4 times our market capitalization. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">The peer group companies that will be used in 2014 for executive compensation benchmarking and performance benchmarking are set forth below. We believe that this larger peer group provides an appropriate benchmark
comparison for our Company. </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;
</P><DIV STYLE="position:relative;float:left; margin-right:1%; width:48%;padding-right:9px;padding-bottom:8px;overflow:hidden;padding-top:3px">

<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="15" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Armstrong World Industries </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="15" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Beazer Homes USA </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="15" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Builders First Source </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="15" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Gibraltar Industries </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="15" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Hovnanian Enterprises </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="15" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">KB Home </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="15" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Louisiana Pacific Corp
</FONT></P></TD></TR></TABLE></DIV><DIV STYLE="position:relative;float:right; width:48%;padding-right:9px;padding-bottom:8px;overflow:hidden;padding-top:3px">

<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="15" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">M.D.C. Holdings </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="15" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Quanex Building Products </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="15" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Ryland Group </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="15" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Standard Pacific </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="15" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Taylor Morrison Home </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="15" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Toll Brothers </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="15" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">USG </FONT></P></TD></TR></TABLE></DIV><div style="clear:both; height:0px; font-size:0px">&nbsp;</div>
 <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">42</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="70%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE">

<TR>
<TD WIDTH="9%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="15%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="16%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="16%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="40%"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom" BGCOLOR="#32406b"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;EXECUTIVE&nbsp;COMPENSATION&nbsp;COMMITTEE&nbsp;REPORT&nbsp;&nbsp;</B></FONT></TD></TR></TABLE></DIV>
<p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><I>The following Executive Compensation Committee Report does not
constitute soliciting material and should not be deemed filed or incorporated by reference to any Company filing under the Securities Act of 1933, as amended (the &#147;Securities Act&#148;), or the Exchange Act, except to the extent the Company
specifically incorporates this report. </I></FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="6" COLOR="#32406b"><B><A NAME="toc680825_25"></A>Executive Compensation Committee Report </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Executive Compensation Committee of the Board of Directors of the Company has reviewed and discussed the Compensation Discussion and Analysis
required by Item&nbsp;402(b) of Regulation S-K with management and, based on such review and discussions, the Executive Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this
proxy statement. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE">


<TR>
<TD WIDTH="100%"></TD></TR>


<TR>
<TD VALIGN="top" NOWRAP> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">THE EXECUTIVE COMPENSATION COMMITTEE</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Raymond Oppel&#151;Chairman</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">Peter L. Ax</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Richard T. Burke Sr.</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Gerald Haddock</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Dana
Bradford</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Michael R. Odell</FONT></P></TD></TR>
</TABLE></DIV>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">43</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="70%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE">

<TR>
<TD WIDTH="38%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="9%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="17%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="16%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="16%"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;COMPENSATION&nbsp;OF&nbsp;OFFICERS&nbsp;AND&nbsp;DIRECTORS&nbsp;&nbsp;</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR></TABLE> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="6" COLOR="#32406b"><B><A NAME="toc680825_26"></A>Compensation of Officers and Directors </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Summary Compensation Table </B></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


<TR>
<TD WIDTH="29%"></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Name and Principal Position</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Year</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Salary</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>($)</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Bonus</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>($)<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(2)</SUP></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Stock</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Awards</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>($)<SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(3)</SUP></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Non-Equity</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Incentive&nbsp;Plan</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Compensation</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>($)<SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(4)</SUP></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>All</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Other</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Compensation</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>($)<SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(5)</SUP></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Total</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>($)</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Steven J. Hilton,</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2013</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,017,500</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2,128,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">4,090,282</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">38,274</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">7,274,056</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Chairman and CEO<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2012</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,017,500</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">999,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,719,745</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">30,421</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">3,766,666</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2011</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,017,500</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">800,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">961,876</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">30,299</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2,809,675</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Larry W. Seay,</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2013</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">500,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,064,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">991,583</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">58,183</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2,613,766</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">EVP and CFO</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2012</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">500,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">50,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">666,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">416,908</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">53,444</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,686,352</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2011</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">500,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">375,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">641,250</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">54,259</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,570,509</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>C. Timothy White,</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2013</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">525,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,064,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">743,688</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">57,106</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2,389,794</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">EVP, General Counsel</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2012</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">525,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">125,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">666,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">312,681</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">67,872</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,696,553</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">and Secretary</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2011</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">525,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">400,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">641,250</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">54,613</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,620,863</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Steven M. Davis,</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2013</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">500,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,064,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,311,323</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">50,841</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2,926,164</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">EVP and COO</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2012</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">500,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">666,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">677,475</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">46,045</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,889,520</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2011</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">500,000</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">320,000</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">641,250</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">41,272</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,502,522</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
</TABLE> <P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">All compensation is for Mr.&nbsp;Hilton&#146;s services in his capacity as the Chairman and Chief Executive Officer of the Company. Mr.&nbsp;Hilton did not
receive any separate compensation for his services as a director. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(2)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Amounts represent discretionary bonuses awarded by the Compensation Committee and were paid subsequent to year-end for each respective year.
</FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(3)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">The non-vested share (restricted stock) grants have a fair value equal to the closing price of our stock on the date of the grant, in accordance with the
requirements of Accounting Standards Codification Subtopic (&#147;ASC&#148;) 718<I>.</I> Balance includes all restricted stock awards granted in the year to our NEOs and not the prorated share of all unvested grants that vested in the current year.
See Note 8 &#147;Stock Based Compensation&#148; of our Consolidated Financial Statements included in our 2013 Annual Report on Form 10-K for discussion of assumptions used for computing the fair value of awards granted. For the performance-based
restricted stock award components included in this column, the amounts represent the grant-date fair value assuming all three performance measures are achieved (i.e., Adjusted Pre-Tax Income, Adjusted SG&amp;A Expense and Customer Service Rating).
Additional detail is also provided in the &#147;Grant of Plan-Based Awards&#148; table. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(4)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Non-equity plan compensation earned in 2013 was paid subsequent to each respective year-end. Non-equity plan compensation earned in 2012 was partially paid in
2012 with $1,461,225, $354,236, $256,677 and $575,634 for Messrs. Hilton, Seay, White and Davis, respectively, with the balance being paid subsequent to year-end. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(5)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">See following table for more detail: </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>All Other Compensation Table </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Year Ended December&nbsp;31, 2013
</B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


<TR>
<TD WIDTH="52%"></TD>
<TD VALIGN="bottom" WIDTH="6%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="6%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="6%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="6%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Name</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000">
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Health&nbsp;and</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Insurance</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Premiums<BR>($)<SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000">
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>401(k)<BR>Match</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>($)</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Car</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Allowance<BR>($)</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Other<BR>($)<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(2)</SUP>
</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000">
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Total&nbsp;All&nbsp;Other</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Compensation<BR>($)</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Steven J Hilton,</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">28,542</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">6,120</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">3,612</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">38,274</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Larry W. Seay,</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">33,923</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">6,120</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">14,400</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">3,740</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">58,183</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">C. Timothy White,</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">32,846</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">6,120</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">14,400</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">3,740</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">57,106</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Steven M. Davis,</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">26,769</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">6,120</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">14,400</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">3,552</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">50,841</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
</TABLE> <P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Includes: (i)&nbsp;employer portion of benefits provided to all employees and (ii)&nbsp;life and disability insurance premiums as contemplated in each
NEO&#146;s employment agreement if such elections were made. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(2)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Other represents the income gross-up to reflect tax consequences of spousal travel. </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">44</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="70%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE">

<TR>
<TD WIDTH="9%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="17%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="16%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="16%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="38%"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom" BGCOLOR="#32406b"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;COMPENSATION&nbsp;OF&nbsp;OFFICERS&nbsp;AND&nbsp;DIRECTORS&nbsp;&nbsp;</B></FONT></TD></TR></TABLE></DIV>
<p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>2013 Grants of Plan-Based Awards </B></FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


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<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000" BGCOLOR="#c1c5d2">&nbsp;<FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" BGCOLOR="#c1c5d2" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD COLSPAN="2" VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000" BGCOLOR="#c1c5d2">&nbsp;<FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000" BGCOLOR="#c1c5d2"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" BGCOLOR="#c1c5d2" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="10" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000;border-bottom:1px solid #000000" BGCOLOR="#c1c5d2"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Estimated Future Payouts Under<BR>Non-Equity&nbsp;Incentive Plan
Awards</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000" BGCOLOR="#c1c5d2"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" BGCOLOR="#c1c5d2" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ROWSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000" BGCOLOR="#c1c5d2">
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Estimated</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Future</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Payouts
under</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Equity&nbsp;Incentive<BR>Plan
Awards<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(2)<BR></SUP>Maximum</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>(#)</B></FONT></P></TD>
<TD VALIGN="bottom" ROWSPAN="2" STYLE="BORDER-TOP:1px solid #000000" BGCOLOR="#c1c5d2"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" BGCOLOR="#c1c5d2" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ROWSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000" BGCOLOR="#c1c5d2">
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>All Other</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Stock</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Awards:</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Number of<BR>Shares of<BR>Stock&nbsp;or&nbsp;Units<BR>(#)</B></FONT></P></TD>
<TD VALIGN="bottom" ROWSPAN="2" STYLE="BORDER-TOP:1px solid #000000" BGCOLOR="#c1c5d2"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" BGCOLOR="#c1c5d2" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ROWSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000" BGCOLOR="#c1c5d2">
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Grant Date</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Fair
Value</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>of Stock
and<BR>Option&nbsp;Awards<BR>($)<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(3)</SUP></B></FONT></P></TD>
<TD VALIGN="bottom" ROWSPAN="2" STYLE="BORDER-TOP:1px solid #000000" BGCOLOR="#c1c5d2"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Name</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Grant&nbsp;Date</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Threshold</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>($)</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Target</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>($)</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Maximum</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>($)</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Steven J Hilton, Chairman and CEO</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2/13/2013</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">25,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,064,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2/13/2013</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">25,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,064,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP></FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP></FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP></FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Larry W. Seay,<BR>EVP and CFO</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2/13/2013</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">12,500</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">532,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2/13/2013</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">12,500</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">532,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP></FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP></FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP></FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">C. Timothy White,<BR>EVP, General Counsel and Secretary</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2/13/2013</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">12,500</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">532,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2/13/2013</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">12,500</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">532,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP></FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP></FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP></FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Steven M. Davis,<BR>EVP and COO</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2/13/2013</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">12,500</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">532,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2/13/2013</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">12,500</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">532,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP></FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP></FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP></FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
</TABLE> <P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">As discussed in this proxy statement under the heading &#147;Compensation Discussion and Analysis&#151;Compensation Programs and Payments&#151;Annual
Incentive Compensation&#148;, pursuant to the terms of their respective employment agreements, Messrs. Hilton, Seay, White and Davis are entitled to performance-based bonuses based on the calculations provided on page&nbsp;34. For our program in
effect for 2013, there is no target award and there was no dollar maximum bonus that could be earned. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(2)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">See additional information regarding these performance-based restricted stock awards in this proxy statement under the heading &#147;Compensation Discussion
and Analysis&#151;Discussion of CEO and NEO Compensation&#148;. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(3)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">The restricted stock grants have a fair value equal to the closing price of our stock on the date of grant in accordance with the requirements of ASC 718. The
grant-date fair value amounts relating to the performance-based restricted stock awards represent the grant-date fair value assuming all three performance measures are achieved (i.e., Adjusted Pre-Tax Income, Adjusted SG&amp;A Expense and Customer
Service Rating). </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">45</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


<p Style='page-break-before:always'>
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<h5 align="left"><a href="#toc">Table of Contents</a></h5>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;COMPENSATION&nbsp;OF&nbsp;OFFICERS&nbsp;AND&nbsp;DIRECTORS&nbsp;&nbsp;</B></FONT></TD>
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<TD VALIGN="top"></TD></TR></TABLE> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Outstanding Equity Awards at
2013 Fiscal Year-End </B></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000">&nbsp;<FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="bottom" COLSPAN="14" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000;border-bottom:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Option Awards</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="14" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000;border-bottom:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Stock Awards</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Equity&nbsp;Incentive&nbsp;Plan&nbsp;Awards</B></FONT></TD>
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<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Name</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Number of<BR>Securities<BR>Underlying<BR>Unexercised<BR>Options (#)<BR>Exercisable</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Number of<BR>Securities<BR>Underlying<BR>Unexercised<BR>Options (#)<BR>Unexercisable</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Option<BR>Exercise<BR>Price</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>($)</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Option<BR>Expiration<BR>Date</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Number<BR>of Shares<BR>or Units<BR>of Stock<BR>that&nbsp;Have<BR>Not<BR>Vested</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Market<BR>Value of<BR>Shares of<BR>Units of<BR>Stock<BR>that<BR>Have Not<BR>Vested <SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(5)</SUP></B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Number
of<BR>Unearned<BR>Shares,&nbsp;Units&nbsp;or<BR>Other Rights<BR>that Have Not<BR>Vested</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>(#)<SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(4)</SUP></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Market
or<BR>Payout&nbsp;Value<BR>of&nbsp;Unearned<BR>Shares,&nbsp;Units&nbsp;or<BR>Other Rights<BR>that Have Not<BR>Vested</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>($)<SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(5)</SUP></B></FONT></P></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Steven J. Hilton, Chairman and CEO</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">20,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">13.69</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1/2/2015</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">139,840</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">19.90</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">5/19/2015</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">81,250<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP></FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)(3)</SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">3,899,188</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">43,750</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2,099,562</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Larry W. Seay, EVP and CFO</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">53</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">13.69</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1/2/2015</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">10,642</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">15.98</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">12/11/2014</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
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<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">50,000<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP></FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(2)(3)</SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2,399,500</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">25,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,199,750</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">C. Timothy White, EVP, General Counsel and Secretary</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">50,000<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP></FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(2)(3)</SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2,399,500</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">25,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,199,750</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Steven M. Davis, EVP and COO</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">9,080</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">42.82</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1/29/2014</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">50,000<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP></FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(2)(3)</SUP>&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">2,399,500</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">25,000</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,199,750</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
</TABLE> <P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Remaining unvested shares vest 18,750 each on February&nbsp;9, 2014 and February&nbsp;10, 2015 and 25,000 on February&nbsp;13, 2016. See also Notes
(3)&nbsp;and (5)&nbsp;below. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(2)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Remaining unvested shares vest 12,500 each on February&nbsp;9, 2014, February&nbsp;10, 2015 and February&nbsp;13, 2016. See also Notes (3)&nbsp;and
(5)&nbsp;below. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(3)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Includes performance-based restricted stock that satisfied performance criteria as of December&nbsp;31, 2013 and vested on February&nbsp;9, 2014 (18,750 for
Mr.&nbsp;Hilton, and 12,500 each for Messrs. Seay, White and Davis). </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(4)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Represents performance-based restricted stock that vests 18,750 on February&nbsp;10, 2015 and 25,000 on February&nbsp;13, 2016 for Mr.&nbsp;Hilton and 12,500
each for Messrs. Seay, White and Davis on February&nbsp;10, 2015 and February&nbsp;13, 2016 subject first to the satisfaction of specific performance criteria. See additional discussion regarding these performance stock awards in footnote (2), in
the 2013 Grants of Plan-Based Awards table included in this proxy statement. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(5)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Computed as the number of shares or units of stock that have not yet vested multiplied by the closing price of the Company&#146;s stock on December&nbsp;31,
2013 of $47.99. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>2013 Option Exercises and Stock Vested </B></FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


<TR>
<TD WIDTH="52%"></TD>
<TD VALIGN="bottom" WIDTH="7%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="7%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="7%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000">&nbsp;<FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000;border-bottom:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Option Awards</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000;border-bottom:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Stock Awards</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Name</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Number&nbsp;of&nbsp;Shares</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Acquired on</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Exercise
(#)</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Value&nbsp;Realized<BR>on</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Exercise ($)</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Number&nbsp;of</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Shares&nbsp;Acquired</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>on
Vesting&nbsp;(#)</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Value</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Realized</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>on&nbsp;Vesting&nbsp;($)</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Steven J Hilton, Chairman and CEO</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">75,160</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">487,894</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">37,500</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,573,875</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Larry W. Seay, EVP and CFO</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">56,490</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">775,459</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">25,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,049,250</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">C. Timothy White, EVP, General Counsel and Secretary</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">25,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">365,281</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">25,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,049,250</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Steven M. Davis, EVP and COO</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">5,920</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">24,627</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">25,000</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,049,250</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
</TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">46</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;COMPENSATION&nbsp;OF&nbsp;OFFICERS&nbsp;AND&nbsp;DIRECTORS&nbsp;&nbsp;</B></FONT></TD></TR></TABLE></DIV>
<p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B>Nonqualified Deferred Compensation Plans </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">In 2013, we began to offer a non-qualified
deferred compensation plan (&#147;deferred compensation plan&#148;) to our NEOs as well as other highly compensated employees in order to allow them additional pre-tax income deferrals above and beyond the limited caps that qualified plans, such as
401k plans, impose on highly compensated employees. We do not currently offer a contribution match on the deferred compensation plan. All contributions to the plan to date have been funded by the employees. The below table reflects all activity of
the deferred compensation plan during 2013. </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Executive Officer (5)</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Executive<BR>Contributions<BR>in Last Fiscal<BR>Year ($)<SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP></B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Registrant<BR>Contributions&nbsp;in<BR>Last Fiscal Year<BR>($)<SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(2)</SUP></B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Aggregate<BR>Earnings&nbsp;in<BR>Last Fiscal<BR>Year ($)<SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(3)</SUP></B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Aggregate<BR>Withdrawals/<BR>Distributions<BR>($)</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Aggregate<BR>Balance&nbsp;at&nbsp;Last<BR>Fiscal&nbsp;Year&nbsp;End<BR>($)<SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(4)</SUP></B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>


<TR BGCOLOR="#eaebf0">
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Steven M. Davis, EVP and COO</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">87,500</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">4,283</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">91,783</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
</TABLE> <P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">These amounts reflect compensation the NEOs earned in our 2013 fiscal year that they have voluntarily deferred and are included in the Summary Compensation
Table. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(2)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Meritage does not provide matching contributions. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(3)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">These amounts do not include any above-market or preferential earnings. Accordingly, these amounts are not reported in the Summary Compensation Table.
</FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(4)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">These amounts reflect compensation the NEOs earned in our 2013 fiscal year or in prior years, but which they voluntarily elected to defer receipt, adjusted
for changes in the value of their investments and distributions, if any. As all contributions are made by the NEOs, the full amount of the year-end balance is vested. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(5)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Messrs. Hilton, Seay and White did not participate in the Deferred Compensation Plan for the 2013 fiscal year. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B><A NAME="toc680825_27"></A>Potential Payments upon Termination or Change of Control </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="4"><B>Summary </B></FONT></P> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">During 2010, we entered into amended employment agreements and change of control agreements with our CEO and each of our other NEOs. Under the terms of these agreements, our CEO and other NEOs are entitled to
severance payments and other benefits in the event of certain types of terminations. These benefits can include cash payments, continuation of insurance benefits and the acceleration of outstanding stock options and restricted shares. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Following is a summary of the severance provisions contained in the employment agreements and change of control agreements between the Company and
its NEOs that were in effect on December&nbsp;31, 2013. New employment and change-of-control agreements were recently negotiated, and the following provisions from the 2010 agreements are not in effect as of the date of this proxy. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B><A NAME="toc680825_28"></A>Employment Agreements--Severance Benefits </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Each employment agreement provides the
executive with severance benefits in certain situations upon his termination of employment. Following is a summary the potential severance payments and benefits depending on the reason for termination. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Voluntary termination by executive without Good Reason </B></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><B></B>If Mr.&nbsp;Hilton voluntarily terminates his employment with the Company without Good Reason, he will be entitled to receive from the Company
(i)&nbsp;his base salary through the date of termination and (ii)&nbsp;at the Company&#146;s option, a $5 million severance payment in monthly installments of $208,333 over a period of two years if the Board elects to impose the non-compete and
non-solicitation covenants contained in his agreements. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><B></B>If Messrs. Seay, White or Davis voluntarily terminates their employment with the Company without Good Reason, they will be entitled to receive from the
Company their base salary through the date of termination. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Voluntary termination by executive with Good Reason
</B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">If any executive voluntarily terminates his employment with Good Reason, he will be entitled to receive from the Company
(i)&nbsp;his base salary through the date of termination and any bonus earned in a previous year but not yet paid, (ii)&nbsp;reimbursement of COBRA premiums and (iii)&nbsp;a severance payment equal to sum of (x)&nbsp;two times the executive&#146;s
base salary on the date of termination and (y)&nbsp;two times the higher of (I)&nbsp;the executive&#146;s average actual bonus compensation* earned for the two years prior to termination and (II) the annual bonus paid to the executive in the year
preceding the date of termination; provided, however, with respect to (a)&nbsp;Mr.&nbsp;Hilton, his severance payment shall not be less than $5 million and shall not exceed $10 million, (b)&nbsp;the
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">47</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


<p Style='page-break-before:always'>
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<h5 align="left"><a href="#toc">Table of Contents</a></h5>


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<TD WIDTH="9%"></TD>
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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;COMPENSATION&nbsp;OF&nbsp;OFFICERS&nbsp;AND&nbsp;DIRECTORS&nbsp;&nbsp;</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="top"></TD></TR></TABLE> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">
severance payment for Messrs. Seay, White and Davis shall not exceed $3 million, and (c)&nbsp;if Messrs. Seay, White or Davis&#146; employment is terminated during the last six months of the
Company&#146;s fiscal year, he will also be paid a pro rata bonus for that fiscal year. In addition, any restricted stock, options and other equity-based awards shall become immediately accelerated and fully vested and exercisable and all
restrictions on restricted stock awards shall immediately lapse. </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2">*</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Bonus compensation is determined as the greater of (i)&nbsp;the actual bonus paid to the executive or (ii)&nbsp;the fair value on the day of grant of the
shares of the restricted stock, stock options and other equity awards that become vested in such year of termination. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Termination by the Company without Cause </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">If the Company terminates the executive Without Cause, each executive will be entitled to receive from the Company (i)&nbsp;his base salary through the date of termination and any bonus earned in a previous year
but not yet paid, and, if such termination occurs during the final six months of the fiscal year, a pro rata portion of the bonus then in effect for that year, (ii)&nbsp;reimbursement of COBRA premiums and (iii)&nbsp;a severance payment as follows:
</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><B></B>For Mr.&nbsp;Hilton, the sum of (x)&nbsp;two times Mr.&nbsp;Hilton&#146;s base salary on the date of termination and (y)&nbsp;two times his average
bonus compensation* earned for the two years prior to termination; provided, however, Mr.&nbsp;Hilton&#146;s severance payment shall not be less than $5 million and shall not exceed $10 million. </FONT></P></TD></TR></TABLE>
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<TR>
<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><B></B>For Messrs. Seay, White and Davis, sum of (x)&nbsp;one times the executive&#146;s base salary on the date of termination and (y)&nbsp;one times his
actual bonus compensation* earned for the two years prior to termination; provided, however the severance payment for Messrs. Seay, White and Davis shall not exceed $2 million. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">In addition, any restricted stock, options and other equity-based awards shall
become immediately accelerated and fully vested and exercisable and all restrictions on restricted stock awards shall immediately lapse. </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2">*</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Bonus compensation is determined as the greater of (i)&nbsp;the actual bonus paid to the executive or (ii)&nbsp;the fair value on the day of grant of the
shares of the restricted stock, stock options and other equity awards that become vested in such year of termination. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Termination by the Company for Cause </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">If the Company terminates any executive&#146;s employment for Cause, the executive will be entitled to receive only his base salary through the date of termination and any bonus earned in a previous year but not
yet paid. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>Death or Disability </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">If the executive&#146;s employment is terminated as a result of the executive&#146;s death or disability, the executive will be entitled to receive from the Company (i)&nbsp;his then current base salary through the
date of termination and any bonus earned in the previous year but not paid, (ii)&nbsp;a pro rata portion of the executive&#146;s actual bonus for the year, and (iii)&nbsp;reimbursement of COBRA premiums. In addition, any restricted stock, options
and other equity-based awards shall become immediately accelerated and fully vested and exercisable and all restrictions on restricted stock awards shall immediately lapse. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:ARIAL" SIZE="4"><B><A NAME="toc680825_29"></A>Change of Control Agreements--Severance Benefits </B></FONT></P> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B>General Terms </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Termination
Date: Effective so long as executive is employed by the Company </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Triggering Event: Pursuant to each executive&#146;s change of control
agreement, each executive is entitled to severance benefits if (i)&nbsp;his employment is terminated by the Company without Cause at anytime within 90 days prior to or within two years following a Change of Control or (ii)&nbsp;the executive
terminates his employment for Good Reason at any time within two years following a Change of Control. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">48</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;COMPENSATION&nbsp;OF&nbsp;OFFICERS&nbsp;AND&nbsp;DIRECTORS&nbsp;&nbsp;</B></FONT></TD></TR></TABLE></DIV>
<p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b"><B><A NAME="toc680825_29"></A>Severance Benefits </B></FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><B></B>For Mr.&nbsp;Hilton, the severance payment is equal to the sum of (i)&nbsp;three times the higher of (x)&nbsp;Mr.&nbsp;Hilton&#146;s annual base salary
on the date of termination or (y)&nbsp;his base salary on the date preceding the Change of Control and (ii)&nbsp;three times the highest of (x)&nbsp;Mr.&nbsp;Hilton&#146;s average annual incentive compensation* for the two years prior to termination
of employment or (y)&nbsp;his annual incentive compensation* for the two years preceding the year in which the Change of Control occurred. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="1%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#32406b">&#149;</FONT><FONT STYLE="font-family:ARIAL" SIZE="2"></FONT></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><B></B>For Messrs. Seay, White and Davis, the severance payment is equal to the sum of (i)&nbsp;two times the higher of (x)&nbsp;the executive&#146;s annual
base salary on the date of termination or (y)&nbsp;the executive&#146; base salary on the date preceding the Change of Control and (ii)&nbsp;two times the highest of (x)&nbsp;the executive&#146;s average annual incentive compensation* for the two
years prior to termination of employment or (y)&nbsp;the executive&#146;s annual incentive compensation* for the year preceding the year in which the Change of Control occurred. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">In addition, any restricted stock, options and other equity-based awards shall become immediately accelerated and fully vested and exercisable and
all restrictions on restricted stock awards shall immediately lapse. </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="2">*</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Incentive compensation is determined as the sum of (a)&nbsp;the actual incentive compensation paid to executive and (b)&nbsp;the fair value on the date of
grant of the shares of restricted stock, stock options and other equity-based awards that become vested in such year of termination. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B><A NAME="toc680825_30"></A>Other Matters Regarding the Employment Agreements and Change of Control Agreements </B></FONT></P>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The terms &#147;Good Reason&#148;,
&#147;Cause&#148; and &#147;Change of Control&#148; are defined in the employment and change of control agreements. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">All severance
payments under the employment agreements and change of control agreements are conditioned upon the delivery and non-revocation of a customary release by the executive in favor of the Company. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Each executive&#146;s employment agreement and change of control agreement is structured so that the executive is entitled to the greater benefit
under the two agreements, but is not entitled to duplicative benefits. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Each of the employment agreements and change of control
agreements include customary provisions concerning the timing, limitation and alteration of payments to comply with Section&nbsp;409A of the Internal Revenue Code. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">Consistent with the SEC&#146;s rules and regulations concerning executive compensation disclosure, the potential value of each executive&#146;s benefits assumes that the termination occurred on December&nbsp;31,
2013, and with a closing stock price of $47.99 on the last business day of 2013. The benefit derived from the acceleration of options was computed as the difference between the strike price and the closing price of our stock on the last day of 2013
for each equity award affected. Total termination benefits represent payments for severance, non-compete and non-disclosure covenants. This summary reflects the terms of the NEOs&#146; employment and change of control agreements that were in effect
on December&nbsp;31, 2013. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Executive Officer</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Voluntary</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Termination&nbsp;by</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Executive</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Without</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Good
Reason</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Voluntary</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Termination&nbsp;by</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Executive With</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Good
Reason</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Termination</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>By Company</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Without&nbsp;Cause</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Death or</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Disability</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000">
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Change&nbsp;of</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Control</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Steven J. Hilton</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">5,018,491</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">11,756,875</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">11,756,875</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">6,024,632</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">19,813,433</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Larry W. Seay</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">6,286,685</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">4,952,128</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">3,617,598</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">7,269,999</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">C. Timothy White</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">5,751,473</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">4,875,503</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">3,625,503</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">6,666,274</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Steven Davis</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">6,033,153</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">4,830,361</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">3,618,131</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">7,055,845</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
</TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">49</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="70%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE">

<TR>
<TD WIDTH="38%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="9%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="17%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="16%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="16%"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;COMPENSATION&nbsp;OF&nbsp;OFFICERS&nbsp;AND&nbsp;DIRECTORS&nbsp;&nbsp;</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR></TABLE> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="4"><B><A NAME="toc680825_30a"></A>Director
Compensation </B></FONT></P> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #32406b">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">In 2013, our
non-employee directors received an annual retainer of $50,000, committee chairmen received an additional annual payment of $15,000, and other committee members received an additional payment of $10,000, with the exception of Land Committee, as there
is currently no compensation paid for service on this transaction-based committee, which meets at irregular intervals. The lead director received an additional $40,000 annually. In addition, during 2013, each of our directors (other than
Mr.&nbsp;Hilton) received a grant of 6,000 shares of restricted stock, which cliff vest on February&nbsp;13, 2016. The 2013 director compensation is set forth below: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


<TR>
<TD WIDTH="50%"></TD>
<TD VALIGN="bottom" WIDTH="8%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="8%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="8%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Name</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000">
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Fees&nbsp;Earned&nbsp;or&nbsp;Paid</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:ARIAL" SIZE="1"><B>in Cash ($)</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000">
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Stock&nbsp;Awards</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>($)<SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>All Other</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Compensation&nbsp;($)<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(2)</SUP></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Total&nbsp;($)</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Robert G. Sarver</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">50,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">255,360</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">305,360</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Raymond Oppel</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">85,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">255,360</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,200</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">341,560</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Peter L. Ax</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">125,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">255,360</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">380,360</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Richard T. Burke, Sr.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">80,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">255,360</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">335,360</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Gerald Haddock</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">85,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">255,360</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">340,360</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Dana Bradford</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">80,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">255,360</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">335,360</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Michael R. Odell</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">80,000</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">255,360</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,000</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">336,360</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
</TABLE> <P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">See Note 8 &#147;Stock Based Compensation&#148; of our Consolidated Financial Statements included in our 2013 Annual Report on Form 10-K for discussion of the
assumptions used for computing the fair value of options and awards granted. As required, the calculation is equal to the fair value of the award multiplied by the total number of awards granted in 2013, not the proportionate share of all existing
unvested awards that vested in the current year. </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(3)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">As part of the reimbursement to directors for out-of-pocket expenses incurred in attending Board and committee meetings, we reimburse certain directors for
charter aircraft service or other travel and lodging-related expenses. During 2013, we made reimbursements of approximately $43,500; $4,000; $6,000, $5,000 and $5,000 to Messrs. Burke, Haddock, Oppel, Bradford and Odell, respectively. The
reimbursement to Mr.&nbsp;Burke included charter aircraft services for various Board members to two meetings. Mr.&nbsp;Oppel and Mr.&nbsp;Odell were reimbursed for spousal travel for one of the board meetings in 2013 where spouses accompanied them.
These reimbursements were included as taxable compensation in accordance with IRS guidelines. </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">50</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

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<TD WIDTH="8%"></TD>
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<TD WIDTH="64%"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom" BGCOLOR="#32406b"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;SECURITIES&nbsp;AUTHORIZED&nbsp;FOR&nbsp;ISSUANCE&nbsp;UNDER&nbsp;EQUITY&nbsp;COMPENSATION&nbsp;PLANS&nbsp;&nbsp;
</B></FONT></TD></TR></TABLE></DIV> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="6" COLOR="#32406b"><B><A NAME="toc680825_31"></A>Securities Authorized for Issuance Under Equity Compensation Plans </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The following table summarizes our equity compensation under all of our equity compensation plans as of December&nbsp;31, 2013: </FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


<TR>
<TD WIDTH="43%"></TD>
<TD VALIGN="bottom" WIDTH="14%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="14%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="9%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Plan Category</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>(a)</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Number&nbsp;of&nbsp;Shares&nbsp;to</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:ARIAL" SIZE="1"><B>be&nbsp;Issued&nbsp;Upon</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Exercise&nbsp;of</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Outstanding&nbsp;Options,</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Warrants&nbsp;and&nbsp;Right<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>(b)</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Weighted&nbsp;Average</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Exercise Price of</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Outstanding</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Options,&nbsp;Warrants</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>and
Rights</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>(c)</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>&nbsp;&nbsp;Number&nbsp;of&nbsp;Securities&nbsp;Remaining&nbsp;&nbsp;</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:ARIAL" SIZE="1"><B>Available for Future Issuance</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>under Equity Compensation</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Plans (Excluding Securities</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Reflected in Column (a)<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(2)</SUP></B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Equity compensation plans approved by stockholders</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,317,710</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">3.86</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">965,404</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Equity compensation plans not approved by stockholders</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="border-bottom:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">N/A</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="border-bottom:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Total</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,317,710</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">3.86</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">965,404</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD></TR>
</TABLE> <P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Balance includes 258,815 options, 883,895 time-based restricted stock awards, and 175,000 performance-based restricted stock awards.
</FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(2)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">The number of securities remaining available for issuance is comprised of shares under our Plan as defined in our annual report on Form 10-K. In addition to
stock options, stock appreciation rights and performance share awards, the Plan allows for the grant of restricted stock shares. Under the Plan, awards other than stock options and stock appreciation rights are counted against the shares available
for grant as 1.38 shares for every one share issued in connection with such awards. </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">51</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


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<TR>
<TD WIDTH="53%"></TD>
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<TD WIDTH="9%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="12%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="11%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
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<TR>
<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;&nbsp;SECTION&nbsp;16(A)&nbsp;BENEFICIAL&nbsp;OWNERSHIP&nbsp;REPORTING&nbsp;COMPLIANCE&nbsp;&nbsp;</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR></TABLE> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="6" COLOR="#32406b"><B><A NAME="toc680825_32"></A>Section&nbsp;16(a)&nbsp;Beneficial&nbsp;Ownership Reporting Compliance </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Executive officers, directors and &#147;beneficial owners&#148; of more than ten percent of our common stock must file initial reports of ownership
and changes in ownership with the SEC under Section&nbsp;16(a) of the Exchange Act. SEC regulations require these reporting persons to furnish us with copies of all Forms 3, 4 and 5, and amendments thereto, that they file with the SEC. Based solely
on our review of the copies of such forms furnished to us, or representations that no forms were required, we believe that during 2013 and through the date of this filing all of our officers, directors and greater than ten percent beneficial owners
complied with all filing requirements of Section&nbsp;16(a) of the Exchange Act. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">52</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="70%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE">

<TR>
<TD WIDTH="9%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="13%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="14%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="15%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="45%"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom" BGCOLOR="#32406b"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;CERTAIN&nbsp;RELATIONSHIPS&nbsp;AND&nbsp;RELATED&nbsp;TRANSACTIONS&nbsp;&nbsp;</B></FONT></TD></TR></TABLE></DIV>
<p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="6" COLOR="#32406b"><B><A NAME="toc680825_33"></A>Certain Relationships and Related
Transactions </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Meritage maintains a written policy concerning conflict of interest transactions that generally applies, among other
things, to transactions between the Company and related persons, including employees, officers and directors and applies to direct and indirect relationships and transactions. Because of the nature of our business, which involves the ownership,
development, construction and sale of real estate and single family homes, our policy was carefully constructed to capture transactions and relationships between the Company or its competitors, and related persons and relationships between
employees, directors, suppliers, vendors, subcontractors (&#147;trades&#148;) and others. At the same time, we were mindful to not inadvertently create the potential for conflicts relating to transactions that are primarily of a personal nature and
do not involve the Company, or conflict with its business (for example, the construction of a vacation home or the purchase of a home from the Company pursuant to our home purchase policy that is available to most employees). </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">For transactions not exempted from the policy, Meritage&#146;s policy requires that designated members of senior management must review and approve
any transaction between a covered person (e.g., employees, officers and directors) and the Company, or between a covered person and a trade contractor. The policy provides that the Company&#146;s legal and internal audit departments are to be
involved in the review and approval process. For transactions involving directors or senior executive officers (including the officers named in this proxy statement), the proposed transaction must be approved in advance by the Audit Committee of the
Board of Directors. Real estate transactions between the Company and related persons are subject to strict scrutiny. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Each of the
transactions listed below was approved by the Audit Committee of the Board of Directors pursuant to the policy. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">During 2013, 2012 and
2011, we chartered aircraft services from companies in which Mr.&nbsp;Hilton has a significant ownership interest. Payments made to these companies were as follows: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


<TR>
<TD WIDTH="76%"></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000">&nbsp;<FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="10" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000;border-bottom:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Year Ended December&nbsp;31,</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000">&nbsp;<FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>2013</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>2012</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>2011</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>


<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Air Charter Services</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">359,000</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">330,000</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">288,000</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">During 2009, we entered into an FDIC insured bank deposit account agreement with Alliance Bank of Arizona
(&#147;Alliance Bank&#148;) through the Certificate of Deposit Account Registry Service (&#147;CDARS&#148;). In 2012, we entered into an additional FDIC insured bank deposit account agreement with Alliance Bank through the Insured Cash Sweep Service
(&#147;ICS&#148;). CDARS and ICS are accepted and recognized services through which participating banks may accept and provide FDIC insurance coverage for large deposits that would otherwise exceed FDIC insurance limits (currently $250,000) by
placing, as custodian for the deposit customer (Meritage), that portion of the deposit exceeding FDIC insurance limits with other CDARS and ICS banks participating in the programs such that for FDIC insurance purposes, the deposit is divided into
insured amounts and deposited with other network banks to allow for full FDIC coverage. CDARS and ICS deposits differ in that ICS deposits may offer &#147;on demand&#148; withdrawals whereas CDARS are certificates of deposits with pre-determined
maturity dates and interest rates. Alliance Bank has divided these amounts into FDIC insured amounts deposited with other CDARS and ICS participating FDIC insured institutions. We do not pay any separate fees to Alliance Bank for these programs.
Rather, Alliance Bank receives a small fee from the other CDARS and ICS institutions for certain funds placed. Robert Sarver, a Meritage director, is a director and the chief executive officer of Western Alliance Bancorporation, the parent company
of Alliance Bank. In addition, Steven Hilton, our Chairman and CEO is also a director of Western Alliance Bancorporation We placed cash deposits through Alliance Bank as the CDARS custodian or relationship bank and as the ICS custodian or
relationship bank and earned market-rate interest on deposits pursuant to the CDARS and ICS programs as follows (in thousands): </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


<TR>
<TD WIDTH="76%"></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000">&nbsp;<FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="10" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000;border-bottom:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>As of December&nbsp;31,</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000">&nbsp;<FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>2013</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>2012</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>2011</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">CDARS</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">89,500</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">102,100</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">149,400</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">ICS</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">157,500</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">84,200</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
</TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


<TR>
<TD WIDTH="82%"></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000">&nbsp;<FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="10" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000;border-bottom:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>Year&nbsp;Ended&nbsp;December&nbsp;31,</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000">&nbsp;<FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>2013</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>2012</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>2011</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>


<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Interest Earned</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">654</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">687</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">767</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
</TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">53</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="70%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE">

<TR>
<TD WIDTH="21%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="9%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="22%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="22%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="22%"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;INDEPENDENT&nbsp;AUDITORS&nbsp;&nbsp;</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR></TABLE> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="6" COLOR="#32406b"><B><A NAME="toc680825_34"></A>Independent Auditors </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">Deloitte&nbsp;&amp; Touche LLP serves as our principal independent registered public accounting firm. We expect representatives of Deloitte&nbsp;&amp; Touche LLP to be present at our Annual Meeting of Stockholders
to respond to appropriate questions, and they will be given an opportunity to make a statement if they desire to do so. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The following
table presents fees for professional accounting services rendered by our principal accountant for the audit of our annual financial statements for 2013 and 2012, and fees billed for other services rendered. </FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


<TR>
<TD WIDTH="80%"></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD></TR>
<TR BGCOLOR="#c1c5d2">
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000">&nbsp;<FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>2013</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1"><B>2012</B></FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Audit fees(1)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,049,800</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,142,300</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Audit-related fees</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="border-bottom:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="border-bottom:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:2.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Audit and audit-related fees</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,049,800</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,142,300</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Tax fees</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">All other fees</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="border-bottom:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="border-bottom:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#eaebf0">
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:ARIAL" SIZE="1">Total fees</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,049,800</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1">1,142,300</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:ARIAL" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
</TABLE> <P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:ARIAL" SIZE="1">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="1">Audit fees consisted principally of fees for audit and review services, and approximately $133,000 and $292,000 in 2013 and 2012, respectively, for services
related to various SEC comfort letters provided in connection with securities offerings and expert consents provided in connection with SEC filings. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">Each year, the Audit Committee approves the annual audit engagement in advance. The Audit Committee also has established procedures to pre-approve all non-audit services provided by the principal independent
registered public accounting firm. All 2013 and 2012 non-audit services listed above were pre-approved. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">54</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;REPORT&nbsp;OF&nbsp;THE&nbsp;AUDIT&nbsp;COMMITTEE&nbsp;&nbsp;</B></FONT></TD></TR></TABLE></DIV>
<p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><I>The following report of the Audit Committee does not constitute
soliciting material and should not be deemed filed or incorporated by reference into any Company filing under the Securities Act or the Exchange Act, except to the extent the Company specifically incorporates this report. </I></FONT></P>
<P STYLE="margin-top:24px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="6" COLOR="#32406b"><B><A NAME="toc680825_35"></A>Report of the Audit Committee </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">We have reviewed Meritage&#146;s audited consolidated financial statements and met with both management and Deloitte&nbsp;&amp; Touche LLP, the Company&#146;s independent registered public accounting firm, to
discuss those consolidated financial statements. Management has represented to us that the consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America. We have also
reviewed, and discussed with management and Deloitte&nbsp;&amp; Touche LLP, management&#146;s report and Deloitte&nbsp;&amp; Touche LLP&#146;s report and attestation on internal control over financial reporting in accordance with Section&nbsp;404 of
the Sarbanes-Oxley Act. We have received from, and discussed with, Deloitte&nbsp;&amp; Touche LLP the written disclosure and the letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding independence.
These items related to that firm&#146;s independence from Meritage. We also discussed with Deloitte&nbsp;&amp; Touche LLP those matters required to be discussed by Statement on Auditing Standards No.&nbsp;114, as amended, &#147;The Auditor&#146;s
Communication with those charged with Governance&#148; and Rule 2-07 of Regulation S-X &#147;Communications with Audit Committees.&#148; Based on these reviews and discussions, we recommended to the Board that Meritage&#146;s audited financial
statements be included in its Annual Report on Form 10-K for the fiscal year ended December&nbsp;31, 2013. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
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<TD VALIGN="top" NOWRAP> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">THE AUDIT COMMITTEE</FONT></P></TD></TR>
<TR>
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Peter L. Ax&#151;Chairman</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">Raymond Oppel</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Richard T. Burke Sr.</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Gerald Haddock</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Dana
Bradford</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Michael R. Odell</FONT></P></TD></TR>
</TABLE></DIV>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">55</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B>&nbsp;&nbsp;STOCKHOLDER&nbsp;PROPOSALS&nbsp;&nbsp;</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="6" COLOR="#32406b"><B><A NAME="toc680825_36"></A>Stockholder Proposals </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT
STYLE="font-family:ARIAL" SIZE="2">If any stockholder would like to make a proposal at our 2015 annual meeting pursuant to Rule 14a-8 of the Exchange Act, we must receive it no later than December&nbsp;2, 2014 in order that it may be considered for
inclusion in the proxy statement and form of proxy relating to that meeting. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Stockholders may propose director candidates for
consideration for membership on the Board of Directors to the Nominating/Governance Committee by following the procedures set forth under the heading &#147;Corporate Governance Principles and Board Matters&#151;The Board and Board
Committees&#151;Director Nomination Process&#151;Stockholder Nominees&#148; on page 26 of this proxy statement. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Proposals to be
presented at the 2015 Annual Meeting that are not intended for inclusion in the proxy statement, including director nominations, 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 earlier than the 150th day nor later than the 120th day prior to the first anniversary date of mailing of this proxy statement, which is
expected to occur on or about April&nbsp;1, 2014&nbsp;, (or, with respect to a proposal required to be included in Meritage&#146;s proxy statement pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, or its successor provision, the earlier
date such proposal was received); provided, however, that in the event that the date of the 2015 Annual Meeting is advanced or delayed by more than 30 days from the first anniversary of the date of this year&#146;s annual meeting, which is to be
held on May&nbsp;14, 2014, notice by the stockholder must be delivered not earlier than the 150th day prior to the date of such annual meeting and not later than the later of the 120th day prior to the date of such annual meeting or the tenth day
following the date on which public announcement of the date of such meeting is first made. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">A nomination or other proposal will be
disregarded if it does not comply with the above procedures. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">56</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B><FONT STYLE="white-space:nowrap">&nbsp;&nbsp;FORWARD-LOOKING&nbsp;STATEMENTS&nbsp;&nbsp;</FONT></B></FONT></TD></TR></TABLE></DIV>
<p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="6" COLOR="#32406b"><B><A NAME="toc680825_37"></A>Forward-Looking Statements
</B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">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 made in the CD&amp;A section of this proxy statement regarding trends in the homebuilding industry; future compensation actions or events; our projected equity award burn rate and the
duration of the sufficiency of the new shares being proposed under our Amended and Restated 2006 Stock Incentive Plan; the deductibility of executive compensation under Section&nbsp;16(m) of the Internal Revenue Code; the anticipated effects of our
compensation structure and programs, and the potential benefits of our strategic investments and their future benefits. Meritage undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information,
future events, or otherwise. Forward-looking statements should be evaluated together with the many uncertainties that affect Meritage&#146;s business, particularly those mentioned under the heading &#147;Risk Factors&#148; in Meritage&#146;s Annual
Report on Form 10-K, and in the periodic reports that Meritage files with the SEC on Form 10-Q and Form 8-K. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">MERITAGE
HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT
STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">57</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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<TD VALIGN="top" NOWRAP ALIGN="center" BGCOLOR="#32406b"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#ffffff"><B><FONT STYLE="white-space:nowrap">&nbsp;&nbsp;ANNUAL&nbsp;REPORT&nbsp;ON&nbsp;FORM&nbsp;10-K&nbsp;AND&nbsp;OTHER&nbsp;MATTERS&nbsp;
&nbsp;</FONT></B></FONT></TD>
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<TD VALIGN="top"></TD></TR></TABLE> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="6" COLOR="#32406b"><B><A NAME="toc680825_38"></A><FONT
STYLE="white-space:nowrap">Annual&nbsp;Report&nbsp;on&nbsp;Form&nbsp;10-K&nbsp;and&nbsp;Other&nbsp;Matters</FONT> </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">The Board of
Directors is not aware of any other matters to be presented at the meeting. If any other business should properly come before the meeting, the proxy holders will vote according to their best judgment. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">A copy of the Company&#146;s Annual Report on Form 10-K for the year ended December&nbsp;31, 2013 may be viewed and downloaded from
<I>investors.meritagehomes.com</I>, may be requested via email through such website or may be requested telephonically at 480-515-8100. The Annual Report is not considered to be proxy solicitation material. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2"><B>Upon request, the Company will provide by first class mail, to each stockholder of record on the record date, without charge, a copy of this
proxy statement and all attachments hereto, the proxy card, and the Company&#146;s Annual Report on Form 10-K for the fiscal year ended December&nbsp;31, 2013, including the required financial statements and financial statement schedules. Written
requests for this information should be directed to: Corporate Secretary, Meritage Homes Corporation, 8800 East Raintree Drive, Suite 300, Scottsdale, AZ 85260. </B></FONT></P>
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<TD VALIGN="top" NOWRAP> <P ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Meritage Homes Corporation</FONT></P></TD></TR>
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<TD VALIGN="top"> <P ALIGN="justify">


<IMG SRC="g680825g94o52.jpg" ALT="LOGO">
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">C. Timothy White</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">Executive&nbsp;Vice&nbsp;President,&nbsp;General&nbsp;Counsel&nbsp;and&nbsp;Secretary</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="justify"><FONT STYLE="font-family:ARIAL" SIZE="2">March&nbsp;24, 2014</FONT></P></TD></TR>
</TABLE></DIV>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747">58</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b">&nbsp;&nbsp;&nbsp;&nbsp;MERITAGE HOMES</FONT><FONT STYLE="font-family:ARIAL" SIZE="1" COLOR="#474747"><I>&nbsp;&nbsp;</I><FONT
STYLE="font-family:Times New Roman" SIZE="2" COLOR="#32406b"><FONT STYLE="FONT-FAMILY:SYMBOL">&#124;</FONT></FONT><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#474747"><I></I></FONT><I>&nbsp;&nbsp;2014 Proxy Statement</I></FONT><FONT
STYLE="font-family:ARIAL" SIZE="1" COLOR="#32406b"> </FONT></P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right"><B>Appendix A </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>MERITAGE HOMES CORPORATION </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>AMENDED AND RESTATED </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>2006 STOCK INCENTIVE PLAN </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 1 </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>PURPOSE
</B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">1.1 <B><I>GENERAL</I></B>.&nbsp;The purpose of the Meritage Homes Corporation 2006 Stock Incentive Plan (the &#147;<I>Plan</I>&#148;)
is to promote the success and enhance the value of Meritage Homes Corporation (the &#147;<I>Company</I>&#148;) by linking the personal interests of the members of the Board, employees, officers, executives, consultants and advisors to those of
Company stockholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to Company stockholders.&nbsp;The Plan is further intended to provide flexibility to the Company in its ability to
motivate, attract, and retain the services of Board members, employees, officers, executives, consultants and advisors upon whose judgment, interest, and special effort the successful conduct of the Company&#146;s operation is largely dependent.
</P> <P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 2 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>EFFECTIVE AND EXPIRATION DATE </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">2.1 <B><I>EFFECTIVE DATE</I></B>. This amended and restated Plan document will become effective as of the date it is approved by the
Company&#146;s stockholders at its 2014 annual meeting (the &#147;<I>Effective Date</I>&#148;). The current Plan document, as amended, will remain in effect until this amended and restated Plan document is approved by the stockholders. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">2.2 <B><I>EXPIRATION DATE</I></B>. The Plan was originally approved by stockholders on May&nbsp;17, 2006 (the &#147;Original Effective
Date&#148;) at the Company&#146;s 2006 Annual Meeting of Stockholders. On May&nbsp;19, 2010, the Company&#146;s stockholders approved an amendment to the Plan that reapproved, expanded and clarified the Performance Criteria and increased the number
of shares of Stock authorized under the Plan. The Plan shall terminate on May&nbsp;13, 2019 (the &#147;Expiration Date&#148;). No Award may be granted under the Plan after the Expiration Date. Any Awards that are outstanding on the Expiration Date
shall remain in force according to the terms of the Plan and the Award Agreement. </P> <P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 3 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>DEFINITIONS AND CONSTRUCTION </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">3.1 <B><I>DEFINITIONS</I></B>. The following words and phrases shall have the following meanings: </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(a) &#147;<I>Award</I>&#148; means any Option, Stock Appreciation Right, Restricted Stock Award, Performance Share Award, Performance-Based
Award or Restricted Stock Unit Award granted to a Participant under the Plan. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(b) &#147;<I>Award Agreement</I>&#148; means any written
agreement, contract, or other instrument or document evidencing an Award. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(c)&nbsp;&#147;<I>Board</I>&#148; means the Board of Directors
of the Company. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(d)&nbsp;&#147;<I>Cause</I>&#148; means and will exist in the following circumstances in which the Participant:
(i)&nbsp;is convicted of a felony, (ii)&nbsp;engages in any fraudulent or other dishonest act to the detriment of the Company, (iii)&nbsp;fails to report for work on a regular basis, except for periods of authorized absence or bona fide illness,
(iv)&nbsp;misappropriates trade secrets, customer lists, or other proprietary information belonging to the Company for his or her own benefit or for the benefit of a competitor, (v)&nbsp;engages in any willful misconduct designed to harm
</P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
the Company or its stockholders, or (vi)&nbsp;fails to perform properly his or her assigned duties. Notwithstanding the foregoing, the definition of &#147;Cause&#148; in this Plan shall be
superseded by the definition of &#147;Cause&#148; in any employment agreement that a Participant has with the Company. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(e)&nbsp;&#147;<I>Change of Control</I>&#148; means and includes each of the following: </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">(i)&nbsp;A sale, transfer, or other disposition by the Company through a single transaction or a series of transactions of securities of the
Company representing 50% or more of the combined voting power of the Company&#146;s then outstanding securities to any &#147;Unrelated Person&#148; or &#147;Unrelated Persons&#148; acting in concert with one another.&nbsp;For purposes of this
definition, the term &#147;Person&#148; shall mean and include any individual, partnership, joint venture, association, trust, corporation, or other entity (including a &#147;group&#148; as referred to in Section&nbsp;13(d)(3)&nbsp;of the Exchange
Act).&nbsp;For purposes of this definition, the term &#147;Unrelated Person&#148; shall mean and include any Person other than the Company, or an employee benefit plan of the Company; or </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">(ii)&nbsp;A sale, transfer, or other disposition through a single transaction or a series of related transactions of all or substantially all
of the assets of the Company to an Unrelated Person or Unrelated Persons acting in concert with one another; or </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">(iii)&nbsp;Any
consolidation or merger of the Company with or into an Unrelated Person, unless immediately after the consolidation or merger the holders of the common stock of the Company immediately prior to the consolidation or merger are the beneficial owners
of securities of the surviving corporation representing at least 50% of the combined voting power of the surviving corporation&#146;s then outstanding securities. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">Notwithstanding the foregoing, the definition of &#147;Change of Control&#148; in this Plan shall be superseded by the definition of
&#147;Change of Control&#148; in any change of control agreement that a Participant has with the Company. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(f)&nbsp;&#147;<I>Code</I>&#148; means the Internal Revenue Code of 1986, as amended. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(g)&nbsp;&#147;<I>Committee</I>&#148; means the committee of the Board described in Section&nbsp;4.1. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(h)&nbsp;&#147;<I>Covered Employee</I>&#148; means an employee who is, or could be, a &#147;covered employee&#148; within the meaning of
Section&nbsp;162(m)&nbsp;of the Code. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(i)&nbsp;&#147;<I>Disability</I>&#148; means, for purposes of this Plan, that the Participant
qualifies to receive long term disability payments under the Company&#146;s long term disability insurance program, as it may be amended from time to time. Notwithstanding the foregoing, the definition of &#147;Disability&#148; in this Plan shall be
superseded by the definition of &#147;Disability&#148; in any employment agreement that a Participant has with the Company. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(j)&nbsp;&#147;<I>Exchange Act</I>&#148; means the Securities Exchange Act of 1934, as amended. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(k)&nbsp;&#147;<I>Fair Market Value</I>&#148; means, as of any given date, the fair market value of Stock on a particular date determined by
such methods or procedures as may be established from time to time by the Committee.&nbsp;Unless otherwise determined by the Committee, the Fair Market Value of Stock as of any date shall be the closing price for the Stock as reported on the New
York Stock Exchange (or on any national securities exchange on which the Stock is then listed) for that date or, if no such prices are reported for that date, the average of the high and low trading prices on the next preceding date for which such
prices were reported. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(l)&nbsp;&#147;<I>Incentive Stock Option</I>&#148; means an Option that is intended to meet the requirements of
Section&nbsp;422 of the Code or any successor provision thereto. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(m)&nbsp;&#147;<I>Non-Employee Director</I>&#148; means a member of the
Board who qualifies as a &#147;Non-Employee Director&#148; as defined in Rule&nbsp;16b-3(b)(3) of the Exchange Act, or any successor definition adopted by the Board. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">A-2 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(n)&nbsp;&#147;<I>Non-Qualified Stock Option</I>&#148; means an Option that is not intended to be
an Incentive Stock Option. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(o)&nbsp;&#147;<I>Option</I>&#148; means a right granted to a Participant pursuant to Article&nbsp;7 of the
Plan to purchase Stock at a specified price during specified time periods. An Option may be either an Incentive Stock Option or a Non-Qualified Stock Option. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(p)&nbsp;&#147;<I>Participant</I>&#148; means a person who, as a member of the Board, employee, officer, or executive of, or consultant or
advisor to, the Company or any Subsidiary, has been granted an Award pursuant to the Plan. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(q)&nbsp;&#147;<I>Performance-Based
Awards</I>&#148; means the Performance Share Awards, Restricted Stock Awards and Restricted Stock Unit Awards granted to select Covered Employees pursuant to Articles 9, 10 and 10A, respectively, but which are subject to the terms and conditions set
forth in Article&nbsp;11. All Performance-Based Awards are intended to qualify as &#147;performance-based compensation&#148; pursuant to Section&nbsp;162(m) of the Code. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(r)&nbsp;&#147;<I>Performance Criteria</I>&#148; means the criteria that the Committee selects for purposes of establishing the Performance
Goal or Performance Goals for a Participant for a Performance Period. The Performance Criteria that will be used to establish Performance Goals are limited to the following: pre- or after-tax net earnings, earnings before interest expense (including
interest amortized to cost of sales) and income taxes, including or excluding, at the discretion of the Committee, non-cash charges, impairments, and similar one-time, non-recurring or extraordinary charges (&#147;EBIT&#148;), earnings before
interest expense (including interest amortized to cost of sales), income taxes, depreciation and amortization, including or excluding, at the discretion of the Committee, non-cash charges, impairments, and similar one-time, non-recurring or
extraordinary charges (&#147;EBITDA&#148;), revenue growth, operating income, operating cash flow, return on net assets, operating expenses, including, without limitation, general and administrative expenses, return on shareholders&#146; equity,
return on assets, return on capital, share price growth, shareholder returns, gross or net profit margin, earnings per share, price per share, and market share, operational metrics, including but not limited to, number of sales, closings and backlog
for a community, division or company-wide, community growth, specs per community or time to construct a home, objective customer service or satisfaction ratings, whether measured internally or by an accepted third party, any of which may be measured
either in absolute terms or as compared to any incremental increase or as compared to results of a budget or peer group. The Committee shall, within the time prescribed by Section&nbsp;162(m) of the Code, define in an objective fashion the manner of
calculating the Performance Criteria it selects to use for such Performance Period for each such Participant. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(s)&nbsp;&#147;<I>Performance Goals</I>&#148; means, for a Performance Period, the goals established in writing by the Committee for the
Performance Period based upon the Performance Criteria.&nbsp;Depending on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms of overall Company performance or the performance of a
division, business unit, or an individual.&nbsp;The Committee, in its discretion, may, within the time prescribed by Section&nbsp;162(m)&nbsp;of the Code, adjust or modify the calculation of Performance Goals for such Performance Period in order to
prevent the dilution or enlargement of the rights of Participants (i)&nbsp;in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event, or development, or (ii)&nbsp;in recognition of, or in anticipation
of, any other unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or in response to, or in anticipation of, changes in applicable laws, regulations, accounting principles, or business conditions. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(t)&nbsp;&#147;<I>Performance Period</I>&#148; means one or more periods of time, which may be of varying and overlapping durations, as the
Committee may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant&#146;s right to, and the payment of, a Performance-Based Award. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(u)&nbsp;&#147;<I>Performance Share Award</I>&#148; means a right granted to a Participant pursuant to Article&nbsp;9, to receive cash, Stock,
or other Awards, the payment of which is contingent upon achieving certain performance goals established by the Committee. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(v)&nbsp;&#147;<I>Plan</I>&#148; means this Meritage Homes Corporation 2006 Stock Incentive Plan, as amended. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">A-3 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(w)&nbsp;&#147;<I>Restricted Stock Award</I>&#148; means Stock granted to a Participant pursuant
to Article&nbsp;10 that is subject to certain restrictions and to risk of forfeiture. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(x)&nbsp;&#147;<I>Stock</I>&#148; means the common
stock of the Company and such other securities of the Company that may be substituted for Stock pursuant to Article&nbsp;13. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(y)&nbsp;&#147;<I>Stock Appreciation Right</I>&#148; or &#147;<I>SAR</I>&#148; means a right granted to a Participant under Article&nbsp;8 to
receive the appreciation on Stock. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(z)&nbsp;&#147;<I>Subsidiary</I>&#148; means any corporation or other entity of which a majority of
the outstanding voting stock or voting power is beneficially owned directly or indirectly by the Company. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(aa) <I>&#147;Restricted
Period&#148;</I> means the period during which Restricted Stock Units are subject to restrictions pursuant to the relevant provisions of the Plan or an Award Agreement. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(bb) <I>&#147;Restricted Stock Unit Award&#148;</I> means the right granted to a Participant to receive a specified number of shares of Stock
in the future, at no monetary cost to the Participant, the payment of which is subject to certain restrictions and to risk of forfeiture as determined by the Committee in accordance with Article 10A. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(cc) <I>&#147;Separation from Service&#148;</I> is a term that applies only in the context of an Award that the Company concludes is subject
to Section&nbsp;409A of the Code and shall have the meaning as defined for purposes of Section&nbsp;409A. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(dd) <I>&#147;Specified
Employee&#148;</I> means certain officers and highly compensated employees of the Company as defined in Treas. Reg. &#167;&nbsp;1.409A-1(i). </P>
<P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 4 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ADMINISTRATION </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">4.1&nbsp;<B><I>COMMITTEE</I></B>.&nbsp;The Plan shall be administered by the Executive Compensation Committee of the Board.&nbsp;The Committee
(or subcommittee thereof) shall consist of at least two individuals, each of whom qualifies as (i)&nbsp;a Non-Employee Director, and (ii)&nbsp;an &#147;outside director&#148; pursuant to Section&nbsp;162(m)&nbsp;of the Code and the regulations
issued thereunder. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">4.2&nbsp;<B><I>ACTION BY THE COMMITTEE</I></B>.&nbsp;A majority of the Committee shall constitute a quorum. The acts
of a majority of the members present at any meeting at which a quorum is present, and acts approved in writing by a majority of the Committee in lieu of a meeting, shall be deemed the acts of the Committee. Each member of the Committee is entitled
to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Subsidiary, the Company&#146;s independent registered public accountants, or any executive
compensation consultant or other professional retained by the Company to assist in the administration of the Plan. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">4.3&nbsp;<B><I>AUTHORITY OF COMMITTEE</I></B>.&nbsp;Subject to any specific designation in the Plan, the Committee has the exclusive power,
authority and discretion to: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(a)&nbsp;designate Participants to receive Awards; </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(b)&nbsp;determine the type or types of Awards to be granted to each Participant; </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(c)&nbsp;determine the number of Awards to be granted and the number of shares of Stock to which an Award will relate; </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">A-4 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(d)&nbsp;determine the terms and conditions of any Award granted pursuant to the Plan, including,
but not limited to, the exercise price, grant price, or purchase price, any restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers
thereof, based in each case on such considerations as the Committee in its sole discretion determines; provided, however, that the Committee shall not (i)&nbsp;except as otherwise provided in the Plan, have the authority to accelerate the vesting or
waive the forfeiture of any Performance-Based Awards, or (ii)&nbsp;take any action or fail to take any action with respect to the operation of the Plan that would cause all or part of the payment under any Award to be subject to the additional tax
under Section&nbsp;409A of the Code; </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(e)&nbsp;determine whether, to what extent, and pursuant to what circumstances an Award may be
settled in, or the exercise price of an Award may be paid in, cash, Stock, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered; </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(f)&nbsp;prescribe the form of each Award Agreement, which need not be identical for each Participant; </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(g)&nbsp;decide all other matters that must be determined in connection with an Award; </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(h)&nbsp;establish, adopt, or revise any rules&nbsp;and regulations as it may deem necessary or advisable to administer the Plan; </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(i)&nbsp;interpret the terms of, and any matter arising pursuant to, the Plan or any Award Agreement; and </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(j)&nbsp;make all other decisions and determinations that may be required pursuant to the Plan or as the Committee deems necessary or
advisable to administer the Plan. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">4.4&nbsp;<B><I>DECISIONS BINDING</I></B>.&nbsp;The Committee&#146;s interpretation of the Plan, any
Awards granted pursuant to the Plan, any Award Agreement and all decisions and determinations by the Committee with respect to the Plan are final, binding, and conclusive on all parties. </P>
<P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 5 </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>SHARES
SUBJECT TO THE PLAN </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">5.1&nbsp;<B><I>NUMBER OF SHARES</I></B>.&nbsp;Subject to adjustment provided in Article&nbsp;13, the aggregate
number of shares of Stock reserved and available for grant pursuant to the Plan shall be 4,150,000,<SUP STYLE="font-size:85%; vertical-align:top">1</SUP> plus (i)&nbsp;the number of shares of Stock available for grant pursuant to the Meritage Homes
Corporation Stock Option Plan (&#147;Prior Plan&#148;) as of the Original Effective Date, and (ii)&nbsp;the number of shares of Stock that were previously granted pursuant to the Prior Plan and that either terminate, expire, or lapse for any reason
after the Original Effective Date. Any shares of Stock issued in connection with Awards other than Options and Stock Appreciation Rights shall be counted against the shares available for grant pursuant to the previous sentence as 1.38 shares for
every one share issued in connection with such Award or by which the Award is valued by reference. Notwithstanding the above, the maximum number of shares of Stock that may be awarded as Incentive Stock Options under the Plan is 1,200,000. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">5.2&nbsp;<B><I>LAPSED OR ASSUMED AWARDS</I></B>.&nbsp;To the extent that an Award terminates, expires, or lapses for any reason, any shares of
Stock subject to the Award will again be available for the grant of an Award pursuant to the Plan.&nbsp;Additionally, to the maximum extent permitted by applicable law or any securities exchange rule, shares of Stock issued in assumption of, or in
substitution for, any outstanding awards of any entity acquired in any form of combination by the Company or any Subsidiary shall not be counted against shares of Stock available for grant pursuant to this Plan.&nbsp;However, for avoidance of doubt,
the exercise of a stock-settled SAR or net-cashless exercise of an Option (or a portion thereof) will reduce the number of shares of Stock available for issuance hereunder by the entire number of shares of Stock subject to that SAR or Option (or
applicable portion thereof), </P> <P STYLE="line-height:8.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1px solid #000000;width:10%">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><SUP STYLE="font-size:85%; vertical-align:top">1</SUP>&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE="font-family:Times New Roman; font-size:10pt">This is the total number of shares of Stock that have been authorized under the Plan since its Original Effective Date.
</P></TD></TR></TABLE>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">A-5 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
even though a smaller number of shares of Stock will be issued upon such an exercise.&nbsp;Also, shares of Stock tendered to pay the exercise price of an Option or to satisfy a tax withholding
obligation arising in connection with an Award will not become available for grant or sale under the Plan. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">5.3&nbsp;<B><I>STOCK
DISTRIBUTED</I></B>.&nbsp;Any Stock distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Stock, treasury Stock or Stock purchased on the open market. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">5.4&nbsp;<B><I>LIMITATION ON NUMBER OF SHARES SUBJECT TO AWARDS</I></B>.&nbsp;Notwithstanding any provision in the Plan to the contrary, and
subject to the adjustment in Article&nbsp;13, the maximum number of shares (counted, as described in Section&nbsp;5.1 above, as 1.38 shares awarded for every one share issued in connection with such Award or by which the Award is valued by
reference) of Stock with respect to one or more Awards that may be granted to any one Participant during a calendar year shall be 250,000. The maximum Performance-Based Award payable to any one Participant pursuant to the Plan for a Performance
Period is 250,000 shares (counted, as described in Section&nbsp;5.1 above, as 1.38 shares awarded for every one share issued in connection with such Award or by which the Award is valued by reference) of Stock. If the Performance Period exceeds 12
months, the share limit expressed in the preceding sentence shall be increased proportionately, as the case may be. For example, if the Performance Period is three years, the limit shall be increased by multiplying it by three. </P>
<P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 6 </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ELIGIBILITY
AND PARTICIPATION </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">6.1&nbsp;<B><I>ELIGIBILITY</I></B>. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(a)&nbsp;<B><I>General</I></B>.&nbsp;Persons eligible to participate in this Plan include all members of the Board, employees, officers, and
executives of, and consultants and advisors providing services to, the Company or a Subsidiary, as determined by the Committee. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(b)&nbsp;<B><I>Foreign Participants</I></B>.&nbsp;In order to assure the viability of Awards granted to Participants employed in foreign
countries, the Committee may provide for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy, or custom.&nbsp;Moreover, the Committee may approve such supplements to, or amendments,
restatements, or alternative versions of, the Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of the Plan as in effect for any other purpose; provided, however, that no such supplements,
amendments, restatements, or alternative versions shall increase the share limitations contained in Article&nbsp;5 of the Plan. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">6.2&nbsp;<B><I>ACTUAL PARTICIPATION</I></B>.&nbsp;Subject to the provisions of the Plan, the Committee may, from time to time, select from
among all eligible individuals, those to whom Awards shall be granted and shall determine the nature and amount of each Award.&nbsp;No individual shall have any right to be granted an Award pursuant to this Plan. </P>
<P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 7 </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>STOCK OPTIONS
</B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">7.1&nbsp;<B><I>GENERAL</I></B>.&nbsp;The Committee is authorized to grant Options to Participants on the following terms and
conditions: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(a)&nbsp;<B><I>Exercise Price</I></B>.&nbsp;The exercise price per share of Stock pursuant to an Option shall be determined by
the Committee and set forth in the Award Agreement; provided that the exercise price for any Option shall not be less than the Fair Market Value as of the date of grant. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">A-6 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(b)&nbsp;<B><I>Time and Conditions of Exercise</I></B>.&nbsp;The Committee shall determine the
time or times at which an Option may be exercised in whole or in part provided that the term of any Option granted under the Plan shall not exceed ten years.&nbsp;The Committee shall also determine the performance or other conditions, if any, that
must be satisfied before all or part of an Option may be exercised.&nbsp;Unless otherwise provided in an Award Agreement, an Option will lapse immediately if a Participant&#146;s employment is terminated for Cause. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(c)&nbsp;<B><I>Payment</I></B>.&nbsp;The Committee shall determine the methods by which the exercise price of an Option may be paid, the form
of payment, including, without limitation, cash, promissory note, shares of Stock held for longer than six months (through actual tender or by attestation), or other property acceptable to the Committee (including broker-assisted &#147;cashless
exercise&#148; arrangements), and the methods by which shares of Stock shall be delivered or deemed to be delivered to Participants. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(d)
<B><I>Evidence of Grant</I></B>. All Options shall be evidenced by a written Award Agreement between the Company and the Participant in the form attached to this Plan as Exhibit&nbsp;A.&nbsp;The Award Agreement shall include such additional
provisions as may be specified by the Committee. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">7.2 <B><I>INCENTIVE STOCK OPTIONS</I></B>. Incentive Stock Options shall be granted only
to employees and the terms of any Incentive Stock Options granted pursuant to the Plan must comply with the following additional provisions of this Section&nbsp;7.2: </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(a)&nbsp;<B><I>Exercise Price</I></B>.&nbsp;Subject to Section&nbsp;7.2(d), the exercise price per share of Stock shall be set by the
Committee, provided that the exercise price for any Incentive Stock Option may not be less than the Fair Market Value as of the date of the grant. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(b)&nbsp;<B><I>Exercise</I></B>.&nbsp;In no event, may any Incentive Stock Option be exercisable for more than ten years from the date of its
grant. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(c)&nbsp;<B><I>Lapse of Option</I></B>.&nbsp;An Incentive Stock Option shall lapse pursuant to the following circumstances. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">(i)&nbsp;The Incentive Stock Option shall lapse ten years from the date it is granted, unless an earlier time is set in the Award Agreement.
</P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">(ii)&nbsp;The Incentive Stock Option shall lapse upon termination of employment for Cause or for any other reason other than the
Participant&#146;s death or Disability, unless otherwise provided in the Award Agreement. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">(iii)&nbsp;If the Participant terminates
employment on account of Disability or death before the Option lapses pursuant to paragraph (i)&nbsp;or (ii)&nbsp;above, the Incentive Stock Option shall lapse, unless it is previously exercised, on the earlier of (1)&nbsp;the scheduled termination
date of the Option; or (2)&nbsp;12 months after the date of the Participant&#146;s termination of employment on account of Disability or death.&nbsp;Upon the Participant&#146;s Disability or death, any Incentive Stock Options exercisable at the
Participant&#146;s Disability or death may be exercised by the Participant&#146;s legal representative or representatives, by the person or persons entitled to do so pursuant to the Participant&#146;s last will and testament, or, if the Participant
fails to make testamentary disposition of such Incentive Stock Option or dies intestate, by the person or persons entitled to receive the Incentive Stock Option pursuant to the applicable laws of descent and distribution. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(d)&nbsp;<B><I>Individual Dollar Limitation</I></B>.&nbsp;The aggregate Fair Market Value (determined as of the time an Award is made) of all
shares of Stock with respect to which Incentive Stock Options are first exercisable by a Participant in any calendar year may not exceed $100,000.00 or such other limitation as imposed by Section&nbsp;422(d)&nbsp;of the Code, or any successor
provision.&nbsp;To the extent that Incentive Stock Options are first exercisable by a Participant in excess of such limitation, the excess shall be considered Non-Qualified Stock Options. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">A-7 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(e)&nbsp;<B><I>Ten Percent Owners</I></B>.&nbsp;An Incentive Stock Option shall be granted to any
individual who, at the date of grant, owns stock possessing more than ten percent of the total combined voting power of all classes of Stock of the Company only if such Option is granted at a price that is not less than 110% of Fair Market Value on
the date of grant and the Option is exercisable for no more than five years from the date of grant. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(f)&nbsp;<B><I>Expiration of
Incentive Stock Options</I></B>.&nbsp;No Award of an Incentive Stock Option may be made pursuant to this Plan after the tenth anniversary of the Effective Date. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(g)&nbsp;<B><I>Right to Exercise</I></B>.&nbsp;Except as provided in Section&nbsp;12.5, during a Participant&#146;s lifetime, an Incentive
Stock Option may be exercised only by the Participant. </P> <P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 8 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>STOCK APPRECIATION RIGHTS </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">8.1&nbsp;<B><I>GRANT OF SARS</I></B>.&nbsp;The Committee is authorized to grant SARs to Participants on the following terms and conditions:
</P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(a)&nbsp;<B><I>Right to Payment</I></B>.&nbsp;Upon the exercise of a SAR, the Participant to whom it is granted has the right to receive
the excess, if any, of: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">(i)&nbsp;the Fair Market Value of a share of Stock on the date of exercise; over </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">(ii)&nbsp;the grant price of the SAR as determined by the Committee, which shall not be less than the Fair Market Value of a share of Stock
on the date of grant. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(b)&nbsp;<B><I>Term</I></B>.&nbsp;The term of each SAR shall not exceed ten years from the date of grant. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(c)&nbsp;<B><I>Other Terms</I></B>.&nbsp;All SARs grants will be evidenced by an Award Agreement.&nbsp;The terms, methods of exercise, methods
of settlement, and any other terms and conditions of any SAR will be determined by the Committee at the time of the grant of the Award and as set forth in the Award Agreement; provided that the form of consideration payable in settlement of a SAR
shall be Stock. </P> <P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 9 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>PERFORMANCE SHARES </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">9.1&nbsp;<B><I>GRANT OF PERFORMANCE SHARES</I></B>.&nbsp;The Committee is authorized to grant Performance Shares to Participants on such terms
and conditions as may be selected by the Committee; provided, however and except as otherwise provided in Section&nbsp;12.8 of the Plan, the minimum vesting period for Performance Share Awards shall be (i)&nbsp;one year in the case of non-tenure
Performance Share Awards (i.e., Performance Share Awards subject to performance vesting criteria), and (ii)&nbsp;pro rata over three years in the case of tenure Performance Share Awards.&nbsp;Subject to Section&nbsp;12.8, the Committee shall have
the complete discretion to determine the number of Performance Shares granted to each Participant.&nbsp;All Awards of Performance Shares shall be evidenced by an Award Agreement. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">9.2&nbsp;<B><I>RIGHT TO PAYMENT</I></B>.&nbsp;A grant of Performance Shares gives the Participant rights, valued as determined by the
Committee, and payable to, or exercisable by, the Participant to whom the Performance Shares are granted, in whole or in part, as the Committee shall establish at grant or thereafter.&nbsp;Subject to the terms of the Plan, the Committee shall set
performance goals and other terms or conditions to payment of the Performance Shares in its discretion which, depending on the extent to which they are met, will determine the number and value of Performance Shares that will be paid to the
Participant. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">A-8 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">9.3&nbsp;<B><I>OTHER TERMS</I></B>.&nbsp;Performance Shares may be payable in cash, Stock, or
other property, and have such other terms and conditions as determined by the Committee and reflected in a written Award Agreement or any other written document such as an employment agreement or a change of control agreement.&nbsp;Unless otherwise
provided in an Award Agreement, Performance Shares will lapse immediately if a Participant&#146;s employment is terminated for Cause. </P>
<P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 10 </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>RESTRICTED
STOCK AWARDS </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">10.1&nbsp;<B><I>GRANT OF RESTRICTED STOCK</I></B>.&nbsp;The Committee is authorized to make Awards of Restricted Stock
to Participants in such amounts and subject to such terms and conditions as determined by the Committee; provided, however and except as otherwise provided in Section&nbsp;12.8 of the Plan, the minimum vesting period for Restricted Stock Awards
shall be (i)&nbsp;one year in the case of non-tenure Restricted Stock Awards (i.e., Restricted Stock Awards subject to performance vesting criteria), and (ii)&nbsp;pro rata over three years in the case of tenure Restricted Stock Awards.&nbsp;All
Awards of Restricted Stock shall be evidenced by a written Restricted Stock Award Agreement. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">10.2&nbsp;<B><I>ISSUANCE AND
RESTRICTIONS</I></B>.&nbsp;Restricted Stock shall be subject to such restrictions on transferability and other restrictions as the Committee may impose (including, without limitation, limitations on the right to vote Restricted Stock or the right to
receive dividends on the Restricted Stock).&nbsp;These restrictions may lapse separately or in combination at such times, pursuant to such circumstances, in such installments, or otherwise, as the Committee determines at the time of the grant of the
Award or thereafter. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">10.3&nbsp;<B><I>FORFEITURE</I></B>.&nbsp;Except as otherwise determined by the Committee at the time of the grant of
the Award or thereafter, upon termination of employment during the applicable restriction period, Restricted Stock that is at that time subject to restrictions shall be forfeited; provided, however, that the Committee may provide in any Award
Agreement or other written document such as an employment agreement or a change of control agreement, that restrictions or forfeiture conditions relating to Restricted Stock will be waived in whole or in part in the event of terminations resulting
from specified causes, and the Committee may in other cases waive in whole or in part restrictions or forfeiture conditions relating to Restricted Stock.&nbsp;Unless otherwise provided in an Award Agreement, Restricted Stock will be forfeited
immediately if a Participant&#146;s employment is terminated for Cause. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">10.4&nbsp;<B><I>CERTIFICATES FOR RESTRICTED
STOCK</I></B>.&nbsp;Restricted Stock granted pursuant to the Plan may be evidenced in such manner as the Committee shall determine.&nbsp;If certificates representing shares of Restricted Stock are registered in the name of the Participant,
certificates must bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock, and the Company may, at its discretion, retain physical possession of the certificate until such time as all
applicable restrictions lapse. </P> <P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 10A </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>RESTRICTED STOCK UNITS </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">10A.1 <B><I>GRANT OF RESTRICTED STOCK UNITS</I></B>. The Committee is authorized to make Awards of Restricted Stock Units to Participants in
such amounts and subject to such terms and conditions as determined by the Committee. All Awards of Restricted Stock Units shall be evidenced by a written Award Agreement, which shall specify the number of Restricted Stock Units granted. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">10A.2 <B><I>ISSUANCE AND RESTRICTIONS</I></B>. Restricted Stock Units shall be subject to such restrictions on transferability and other
restrictions as the Committee may impose. These restrictions may lapse separately or in combination at such time, pursuant to such circumstances, in such installments, or otherwise, as the Committee determines at the time of the grant of the Award
or thereafter. No shares of Stock shall be issued at the time a Restricted Stock Unit is granted, and the Company will not be required to set aside a fund for the payment of any such Award. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">A-9 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">10A.3 <B><I>DIVIDEND EQUIVALENTS AND OTHER DISTRIBUTIONS</I></B>. In the Award Agreement for any
Restricted Stock Unit Award, the Committee may also grant the Participant dividend equivalents and other distribution rights. Any dividend equivalents or other distributions to which a Participant may be entitled pursuant to this Section shall be
payable in accordance with the related Award Agreement, which shall comply with the requirements of Section&nbsp;409A of the Code (or an applicable exception thereto) to the extent Section&nbsp;409A of the Code applies to such dividend equivalents
or other distributions. In no event may a dividend equivalent awarded in connection with a Restricted Stock Unit that vests based on the achievement of Performance Goals be paid unless and until such Restricted Stock Unit Award vests or is earned by
satisfaction of the applicable Performance Goals. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">10A.4 <B><I>FORFEITURE</I></B>. Except as otherwise determined by the Committee at the
time of the grant of the Award or thereafter, upon termination of employment during the applicable restriction period, Restricted Stock Units that are at that time subject to restrictions shall be forfeited; provided, however, that the Committee may
provide in any Award Agreement or any other written document such as an employment agreement or a change of control agreement, that restrictions or forfeiture conditions relating to Restricted Stock Units will be waived in whole or in part in the
event of terminations resulting from specified causes, and the Committee may in other cases waive in whole or in part restrictions or forfeiture conditions related to Restricted Stock Units. Unless otherwise provided in an Award Agreement,
Restricted Stock Units will be forfeited immediately if a Participant&#146;s employment is terminated for Cause. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><B></B>10A.5
<B></B><B><I>DELIVERY OF RESTRICTED STOCK UNITS</I></B><B></B>. Payment for any vested Restricted Stock Unit Award issued pursuant to this Article shall be made in one lump sum payment of shares of Stock. As a general rule, the shares payable under
any Restricted Stock Unit Award will be issued to the Participant within sixty (60)&nbsp;days following the date on which the Restricted Stock Units vest. Unless the related Award Agreement is structured to qualify for an exception to the
requirements of Section&nbsp;409A of the Code, such payment is intended to be made at a specified time or pursuant to a fixed schedule under Treas. Reg. &#167;&nbsp;1.409A-3(a)(4). Restricted Stock Units that vest upon a Participant&#146;s
Separation from Service will be issued to the Participant within sixty (60)&nbsp;days following the date of the Participant&#146;s Separation from Service. Such payment is intended to be made upon the Participant&#146;s Separation from Service
pursuant to Treas. Reg. <FONT STYLE="white-space:nowrap">&#167;&nbsp;1.409A-3(a)(1)</FONT> and accordingly, if the Participant is a Specified Employee on the date on which the Restricted Stock Units become payable, the six (6)&nbsp;month delay
described in Section&nbsp;15.14 shall apply if required under Section 409A.<B> </B></P> <P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 11 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>PERFORMANCE-BASED AWARDS </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">11.1&nbsp;<B><I>PURPOSE</I></B>.&nbsp;The purpose of this Article 11 is to provide the Committee the ability to qualify the Performance Share
Awards pursuant to Article 9, the Restricted Stock Awards pursuant to Article 10 and the Restricted Stock Unit Awards pursuant to Article 10A as &#147;performance-based compensation&#148; pursuant to Section&nbsp;162(m) of the Code. If the
Committee, in its discretion, decides to grant a Performance-Based Award to a Covered Employee, the provisions of this Section&nbsp;11 shall control over any contrary provision contained in Articles 9, 10 or 10A. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">11.2&nbsp;<B><I>APPLICABILITY</I></B>.&nbsp;This Article 11 shall apply only to those Covered Employees selected by the Committee to receive
Performance-Based Awards. The Committee may, in its discretion, grant Restricted Stock Awards, Restricted Stock Unit Awards or Performance Share Awards to Covered Employees that do not satisfy the requirements of this Article 11. The designation of
a Covered Employee as a Participant for a Performance Period shall not in any manner entitle the Participant to receive an Award for the period. Moreover, designation of a Covered Employee as a Participant for a particular Performance Period shall
not require designation of such Covered Employee as a Participant in any subsequent Performance Period and designation of one Covered Employee as a Participant shall not require designation of any other Covered Employees as a Participant in such
period or in any other period. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">A-10 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">11.3&nbsp;<B><I>DISCRETION OF COMMITTEE WITH RESPECT TO PERFORMANCE AWARDS</I></B>.&nbsp;With
regard to a particular Performance Period, the Committee shall have full discretion to select the length of such Performance Period (provided, however, and except as otherwise provided in Section&nbsp;12.8 of the Plan, that, in no event may the
Performance Period be for less than one year), the type of Performance-Based Awards to be issued, the kind and/or level of the Performance Goal, and whether the Performance Goal is to apply to the Company, a Subsidiary or any division or business
unit thereof.&nbsp;Unless otherwise provided in an Award Agreement, Performance-Based Awards will be forfeited if a Participant&#146;s employment is terminated for Cause. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">11.4&nbsp;<B><I>PAYMENT OF PERFORMANCE AWARDS</I></B>.&nbsp;Unless otherwise provided in the relevant Award Agreement or other written
document such as an employment agreement or a change of control agreement, a Participant must be employed by the Company or a Subsidiary on the day a Performance Award for such Performance Period is to be paid to the Participant. Furthermore, a
Participant shall be eligible to receive payment pursuant to a Performance-Based Award for a Performance Period only if the Performance Goals for such period are achieved, except as otherwise provided in an Award Agreement and due to a
Participant&#146;s death, Disability or a Change of Control. In no event may a dividend or a dividend equivalent awarded in connection with a Performance-Based Award that vests based on the achievement of Performance Goals be paid unless and until
such Performance-Based Award vests or is earned by satisfaction of the applicable Performance Goals. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">11.5&nbsp;<B><I>SECTION&nbsp;162(m)
COMPLIANCE</I></B>. The Performance-Based Awards granted under the Plan shall be administered to comply with Section&nbsp;162(m) of the Code and, if any provisions of the Plan cause any Performance-Based Award to not qualify as performance-based
compensation under Section&nbsp;162(m) of the Code, that provision shall be stricken from this Plan, but the other provisions of this Plan shall remain in effect. Any action striking any portion of this Plan shall modify the stricken terms as
narrowly as possible to give as much effect as possible to the intentions of the parties under this Plan. Furthermore, if any portion of the Plan or any Award Agreement conflicts with Section&nbsp;162(m) or the regulations issued thereunder, the
provisions of Section&nbsp;162(m) and such regulations shall control. </P> <P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 12 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>PROVISIONS APPLICABLE TO AWARDS </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">12.1&nbsp;<B><I>STAND-ALONE AND TANDEM AWARDS</I></B>.&nbsp;Awards granted pursuant to the Plan may, in the discretion of the Committee, be
granted either alone, in addition to, or in tandem with, any other Award granted pursuant to the Plan.&nbsp;Awards granted in addition to or in tandem with other Awards may be granted either at the same time as or at a different time from the grant
of such other Awards. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">12.2&nbsp;<B><I>TERM OF AWARD</I></B>.&nbsp;The term of each Award shall be for the period as determined by the
Committee, provided that in no event shall the term of any Option or Stock Appreciation Right granted in tandem with the Incentive Stock Option exceed a period of ten years from the date of its grant. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">12.3&nbsp;<B><I>FORM&nbsp;OF PAYMENT FOR AWARDS</I></B>.&nbsp;Subject to the terms of the Plan and any applicable law or Award Agreement,
payments or transfers to be made by the Company or a Subsidiary on the grant or exercise of an Award may be made in such forms as the Committee determines at or after the time of grant, including, without limitation, cash, promissory note, Stock
held for more than six months, other Awards, or other property, or any combination, and may be made in a single payment or transfer, in installments, or on a deferred basis, in each case determined in accordance with rules&nbsp;adopted by, and at
the discretion of, the Committee. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">12.4 <B><I>LIMITS ON TRANSFER</I></B>. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(a)&nbsp;<B><I>General</I></B>.&nbsp;Except as provided in Section&nbsp;12.4(b)&nbsp;or Section&nbsp;12.5, no right or interest of a
Participant in any Award may be pledged, encumbered, or hypothecated to, or in favor of, any party other than the Company or a Subsidiary, or shall be subject to any lien, obligation, or liability of such Participant to any other party other than
the Company or a Subsidiary.&nbsp;Except as provided in Section&nbsp;12.4(b)&nbsp;or Section&nbsp;12.5, and except as </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">A-11 </P>


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otherwise provided by the Committee, no Award shall be assigned, transferred, or otherwise disposed of by a Participant other than by will or the laws of descent and distribution. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(b)&nbsp;<B><I>Transfers to Family Members</I></B>.&nbsp;The Committee shall have the authority, in its discretion, to grant (or to sanction
by way of amendment to an existing Award) Awards which may be transferred by the Participant during his or her lifetime to any Family Member (as defined below).&nbsp;Unless transfers for the Participant have been previously approved by the
Committee, a transfer of an Award pursuant hereto may only be affected by the Company at the written request of the Participant.&nbsp;In the event an Award is transferred as contemplated herein, such transferred Award may not be subsequently
transferred by the transferee (other than another transfer meeting the conditions herein) except by will or the laws of descent and distribution.&nbsp;A transferred Award shall continue to be governed by and subject to the terms and limitations of
the Plan and relevant Award Agreement, and the transferee shall be entitled to the same rights as the Participant, as if the transfer had not taken place.&nbsp;For purposes of this Section&nbsp;12.4(b), the term &#147;Family Member&#148; means
spouse and any parent, stepparent, grandparent, child, stepchild, or grandchild, including adoptive relationships or a trust or any other entity in which these persons (or the Participant) have more than 50% of the beneficial interest. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">12.5&nbsp;<B><I>BENEFICIARIES</I></B>.&nbsp;Notwithstanding Section&nbsp;12.4, a Participant may, in the manner determined by the Committee,
designate a beneficiary to exercise the rights of the Participant and to receive any distribution with respect to any Award upon the Participant&#146;s death.&nbsp;A beneficiary, legal guardian, legal representative, or other person claiming any
rights pursuant to the Plan is subject to all terms and conditions of the Plan and any Award Agreement applicable to the Participant, except to the extent the Plan and Award Agreement otherwise provide, and to any additional restrictions deemed
necessary or appropriate by the Committee.&nbsp;If the Participant is married and resides in a community property state, a designation of a person other than the Participant&#146;s spouse as his beneficiary with respect to more than 50% of the
Participant&#146;s interest in the Award shall not be effective without the prior written consent of the Participant&#146;s spouse.&nbsp;If no beneficiary has been designated or survives the Participant, payment shall be made to the person entitled
thereto pursuant to the Participant&#146;s will or the laws of descent and distribution.&nbsp;Subject to the foregoing, a beneficiary designation may be changed or revoked by a Participant at any time provided the change or revocation is provided to
the Committee. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">12.6&nbsp;<B><I>STOCK CERTIFICATES</I></B>.&nbsp;Notwithstanding anything herein to the contrary, the Company shall not be
required to issue or deliver any certificates evidencing shares of Stock pursuant to the exercise of any Award, unless and until the Board has determined, with advice of counsel, that the issuance and delivery of such certificates is in compliance
with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the shares of Stock are listed or traded.&nbsp;All Stock certificates delivered pursuant to the Plan are subject to any
stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply with Federal, state, or foreign jurisdiction, securities or other laws, rules&nbsp;and regulations and the rules&nbsp;of any national securities
exchange or automated quotation system on which the Stock is listed, quoted, or traded.&nbsp;The Committee may place legends on any Stock certificate to reference restrictions applicable to the Stock.&nbsp;In addition to the terms and conditions
provided herein, the Board may require that a Participant make such reasonable covenants, agreements, and representations as the Board, in its discretion, deems advisable in order to comply with any such laws, regulations, or requirements. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">12.7&nbsp;<B><I>ACCELERATION UPON A CHANGE OF CONTROL</I></B>.&nbsp;Except as otherwise provided in an Award Agreement or other written
document such as an employment agreement or a change of control agreement, if a Change of Control occurs and Awards are converted, assumed, or replaced by a successor, the Committee shall have the discretion to cause all outstanding Awards to become
fully exercisable and all restrictions on outstanding Awards to lapse.&nbsp;Except as otherwise provided in an Award Agreement or other written document such as an employment agreement or a change of control agreement, if a Change of Control occurs
and Awards are not converted, assumed, or replaced by a successor, all outstanding Awards shall automatically become fully exercisable and all restrictions on outstanding Awards shall lapse.&nbsp;To the extent that this provision causes Incentive
Stock Options to exceed the dollar limitation set forth in Section&nbsp;7.2(d), the excess Options shall be deemed to be Non-Qualified Stock Options.&nbsp;Upon, or in anticipation of, such an event, the Committee may cause </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">A-12 </P>


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every Award outstanding hereunder to terminate at a specific time in the future and shall give each Participant the right to exercise Awards during a period of time as the Committee, in its sole
and absolute discretion, shall determine. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">12.8&nbsp;<B><I>LIMITATION ON GRANTS OF AWARDS.&nbsp;</I></B>Notwithstanding the provisions of
Section&nbsp;9.1, Section&nbsp;10.1 and Section&nbsp;11.3 of the Plan, the Committee shall not have the authority to grant shares pursuant to any Performance Share Award or Restricted Stock Award that does not comply with the minimum vesting period
or minimum Performance Period that exceeds five percent (5%)&nbsp;of the aggregate number of shares of Stock authorized for grant pursuant to Section&nbsp;5.1 of the Plan. Notwithstanding any other provision contained herein, the Committee may
provide in an Award Agreement for accelerated vesting upon a Change of Control, the Participant&#146;s death, Disability,&#148; &#147;retirement,&#148; &#147;voluntary termination for good reason&#148; or termination by the Company without Cause (as
such terms may be defined in the Award Agreement). </P> <P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 13 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>CHANGES IN CAPITAL STRUCTURE </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">13.1&nbsp;<B><I>SHARES AVAILABLE FOR GRANT</I></B>.&nbsp;In the event of any change in the number of shares of Stock outstanding by reason of
any stock dividend or split, recapitalization, merger, consolidation, combination or exchange of shares or similar corporate change, the maximum aggregate number of shares of Stock with respect to which the Committee may grant Awards, the number of
shares of Stock subject to any Award, and any numeric limitation expressed in the Plan shall be appropriately adjusted by the Committee. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">13.2&nbsp;<B><I>OUTSTANDING AWARDS&#151;INCREASE OR DECREASE IN ISSUED SHARES WITHOUT CONSIDERATION</I></B>.&nbsp;Subject to any required
action by the stockholders of the Company, in the event of any increase or decrease in the number of issued shares of Stock resulting from a subdivision or consolidation of shares of Stock or the payment of a stock dividend (but only on the shares
of Stock), or any other increase or decrease in the number of such shares effected without receipt or payment of consideration by the Company, the Committee shall proportionally adjust the number of shares of Stock subject to each outstanding Award
and the exercise price per share of Stock of each such Award. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">13.3&nbsp;<B><I>OUTSTANDING AWARDS&#151;CERTAIN
MERGERS</I></B>.&nbsp;Subject to any required action by the stockholders of the Company, in the event that the Company shall be the surviving corporation in any merger or consolidation (except a merger or consolidation as a result of which the
holders of shares of Stock receive securities of another corporation), each Award outstanding on the date of such merger or consolidation shall pertain to and apply to the securities that a holder of the number of shares of Stock subject to such
Award would have received in such merger or consolidation. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">13.4&nbsp;<B><I>OUTSTANDING AWARDS&#151;OTHER CHANGES</I></B>.&nbsp;In the
event of any other change in the capitalization of the Company or corporate change other than those specifically referred to in Article&nbsp;13, the Committee may, in its absolute discretion, make such adjustments in the number and class of shares
subject to Awards outstanding on the date on which such change occurs and in the per share exercise price of each Award as the Committee may consider appropriate to prevent the dilution or enlargement of rights relating to Awards granted under the
Plan. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">13.5&nbsp;<B><I>NO OTHER RIGHTS</I></B>.&nbsp;Except as expressly provided in the Plan, no Participant shall have any rights by
reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend, any increase or decrease in the number of shares of stock of any class or any dissolution, liquidation, merger, or consolidation of the Company
or any other corporation.&nbsp;Except as expressly provided in the Plan, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number of shares of Stock subject to an Award or the exercise price of any Award. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">A-13 </P>


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<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>AMENDMENT, MODIFICATION, AND TERMINATION </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">14.1&nbsp;<B><I>AMENDMENT, MODIFICATION, AND TERMINATION</I></B>.&nbsp;With the approval of the Board, at any time and from time to time, the
Committee may terminate, amend or modify the Plan; provided, however, that (i)&nbsp;to the extent necessary and desirable to comply with any applicable law, regulation, or stock exchange rule, the Company shall obtain stockholder approval of any
Plan amendment in such a manner and to such a degree as required, (ii)&nbsp;shareholder approval is required for any amendment to the Plan that (A)&nbsp;increases the number of shares available under the Plan (other than any adjustment as provided
by Article&nbsp;13), (B)&nbsp;permits the Committee to grant Options with an exercise price that is below Fair Market Value on the date of grant, (C)&nbsp;permits the Committee to extend the exercise period for an Option beyond ten years from the
date of grant, or (D)&nbsp;permits the Committee to reprice previously granted Options, and (iii)&nbsp;no such action shall be taken that would cause all or part of the payment under any Award to be subject to the additional tax under
Section&nbsp;409A of the Code. Except in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination, or exchange of shares), the terms of outstanding Options or SAR awards may not, without stockholder approval, be amended to reduce the exercise price of, or cancel such outstanding Options or SARs in
exchange for cash, other awards, Options or SARs, with an exercise price that is less than the exercise price of the original Options or SARs. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">14.2&nbsp;<B><I>AWARDS PREVIOUSLY GRANTED</I></B>.&nbsp;No termination, amendment, or modification of the Plan shall adversely affect in any
material way any Award previously granted pursuant to the Plan without the prior written consent of the Participant. </P> <P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 15
</B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>GENERAL PROVISIONS </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">15.1&nbsp;<B><I>NO RIGHTS TO AWARDS</I></B>.&nbsp;No Participant, employee, or other person shall have any claim to be granted any Award
pursuant to the Plan, and neither the Company nor the Committee is obligated to treat Participants, employees, and other persons uniformly. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">15.2&nbsp;<B><I>NO STOCKHOLDERS RIGHTS</I></B>.&nbsp;No Award gives the Participant any of the rights of a stockholder of the Company unless
and until shares of Stock are in fact issued to such person in connection with such Award. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">15.3&nbsp;<B><I>WITHHOLDING</I></B>.&nbsp;The
Company or any Subsidiary shall have the authority and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy Federal, state, and local taxes (including the Participant&#146;s FICA
obligation) required by law to be withheld with respect to any taxable event concerning a Participant arising as a result of this Plan.&nbsp;With the Committee&#146;s consent, a Participant may elect to (i)&nbsp;have the Company withhold from those
shares of Stock that would otherwise be received upon the exercise of any Option, a number of shares having a Fair Market Value equal to the minimum statutory amount necessary to satisfy the Company&#146;s applicable federal, state, local or foreign
income and employment tax withholding obligations with respect to such Participant, or (ii)&nbsp;tender <FONT STYLE="white-space:nowrap">previously-owned</FONT> shares of Stock held by the Participant for six months or longer to satisfy the
Company&#146;s applicable federal, state, local, or foreign income and employment tax withholding obligations with respect to the Participant. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">15.4&nbsp;<B><I>NO RIGHT TO EMPLOYMENT OR SERVICES</I></B>.&nbsp;Nothing in the Plan or any Award Agreement shall interfere with or limit in
any way the right of the Company or any Subsidiary to terminate any Participant&#146;s employment or services at any time, nor confer upon any Participant any right to continue in the employ or service of the Company or any Subsidiary. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">15.5&nbsp;<B><I>UNFUNDED STATUS OF AWARDS</I></B>.&nbsp;The Plan is intended to be an &#147;unfunded&#148; plan for incentive
compensation.&nbsp;With respect to any payments not yet made to a Participant pursuant to an Award, nothing </P>
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contained in the Plan or any Award Agreement shall give the Participant any rights that are greater than those of a general creditor of the Company or any Subsidiary. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">15.6&nbsp;<B><I>INDEMNIFICATION</I></B>.&nbsp;To the extent allowable pursuant to applicable law, each member of the Committee or of the Board
shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to which he
or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding
against him or her provided he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf.&nbsp;The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Company&#146;s Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify
them or hold them harmless. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">15.7&nbsp;<B><I>RELATIONSHIP TO OTHER BENEFITS</I></B>.&nbsp;No payment pursuant to the Plan shall be taken
into account in determining any benefits pursuant to any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">15.8&nbsp;<B><I>EXPENSES</I></B>.&nbsp;The expenses of administering the Plan shall be borne by the Company and its Subsidiaries. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">15.9&nbsp;<B><I>TITLES AND HEADINGS</I></B>.&nbsp;The titles and headings of the Sections in the Plan are for convenience of reference only
and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">15.10&nbsp;<B><I>FRACTIONAL
SHARES</I></B>.&nbsp;No fractional shares of Stock shall be issued and the Committee shall determine, in its discretion, whether cash shall be given in lieu of fractional shares or whether such fractional shares shall be eliminated by rounding up or
down as appropriate. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">15.11&nbsp;<B><I>SECURITIES LAW COMPLIANCE</I></B>.&nbsp;With respect to any person who is, on the relevant date,
obligated to file reports pursuant to Section&nbsp;16 of the Exchange Act, transactions pursuant to this Plan are intended to comply with all applicable conditions of Rule&nbsp;16b-3 or its successors pursuant to the Exchange Act.&nbsp;To the extent
any provision of the Plan or action by the Committee fails to so comply, it shall be void to the extent permitted by law and voidable as deemed advisable by the Committee. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">15.12&nbsp;<B><I>GOVERNMENT AND OTHER REGULATIONS</I></B>.&nbsp;The obligation of the Company to make payment of awards in Stock or otherwise
shall be subject to all applicable laws, rules, and regulations, and to such approvals by government agencies as may be required.&nbsp;The Company shall be under no obligation to register pursuant to the Securities Act of 1933, as amended, any of
the shares of Stock paid pursuant to the Plan.&nbsp;If the shares paid pursuant to the Plan may in certain circumstances be exempt from registration pursuant to the Securities Act of 1933, as amended, the Company may restrict the transfer of such
shares in such manner as it deems advisable to ensure the availability of any such exemption. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">15.13&nbsp;<B><I>GOVERNING
LAW</I></B>.&nbsp;The Plan and all Award Agreements shall be construed in accordance with and governed by the laws of the State of Maryland. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">15.14&nbsp;<B><I>SECTION&nbsp;409A</I></B>.&nbsp;If any payments under this Plan are subject to the provisions of Section&nbsp;409A of the
Code, it is intended that the terms of this Plan and the applicable Award Agreement will comply fully with and meet all of the requirements of Section&nbsp;409A of the Code. If, at the time of a Participant&#146;s Separation from Service, the
Company has any Stock which is publicly traded on an established securities market or otherwise, and if the Participant is considered to be a Specified Employee, to the extent any payment for any Award is
</P>
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subject to the requirements of Section&nbsp;409A of the Code and is payable upon the Participant&#146;s Separation from Service, such payment shall not commence prior to the first business day
following the date which is six (6)&nbsp;months after the Participant&#146;s Separation from Service (or if earlier than the end of the six (6)&nbsp;month period, the date of the Participant&#146;s death). Any amounts that would have been
distributed during such six (6)&nbsp;month period will be distributed on the day following the expiration of the six (6)&nbsp;month period. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">A-16 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right"><B>Appendix B </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>MERITAGE HOMES CORPORATION </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B><STRIKE>2006 ANNUAL</STRIKE><U>EXECUTIVE MANAGEMENT</U> INCENTIVE PLAN </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 1. </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ESTABLISHMENT, AND PURPOSE, AND DURATION </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">1.1<I> Establishment of the Plan</I>. Meritage Homes Corporation (the &#147;Company&#148;), hereby establishes an annual incentive plan to be
known as the &#147;Meritage Homes Corporation <STRIKE><B>2006</B> <B></B></STRIKE>Executive Management Incentive Plan&#148; (the &#147;Plan&#148;).<U> <B>Historically, the Plan also has been referred to as the &#147;Meritage Homes Corporation 2006
Annual Incentive Plan.&#148;</B> </U> </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">1.2 <I>Purpose of the Plan</I>. The Plan is designed to (i)&nbsp;recognize and reward on an annual
basis select Company executives for their contributions to the overall success of the Company, and (ii)&nbsp;qualify compensation paid under the Plan as &#147;performance-based compensation&#148; as that term is defined in Section&nbsp;162(m) of the
Internal Revenue Code of 1986 (the &#147;Code&#148;) and the regulations thereunder. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">1.3<I> Duration of the Plan. </I>The <STRIKE><B>Plan
commenced on February&nbsp;15, 2006 upon the approval of the </B></STRIKE>Company&#146;s stockholders <U><B>approved the Plan </B></U>at the Company&#146;s 2006 Annual Meeting <STRIKE><B>of Stockholders. </B></STRIKE><U><B>and the Plan commenced as
of February&nbsp;15, 2006. On May&nbsp;19, 2010, the Company&#146;s stockholders approved an amendment to the Plan that reapproved, expanded and clarified the Performance Criteria and extended the Plan&#146;s termination date until February&nbsp;14,
2015. </B></U>The Plan <STRIKE><B>shall</B></STRIKE><U><B>will</B></U><STRIKE></STRIKE> terminate on February&nbsp;14, <STRIKE><B>2011</B></STRIKE><U><B>2015</B></U><STRIKE></STRIKE>, unless the Company&#146;s stockholders approve the
<STRIKE><B>First</B></STRIKE><U><B>Second</B></U> Amendment. If the <STRIKE><B>First</B></STRIKE><U><B>Second</B></U> Amendment is approved by the Company&#146;s stockholders, the Plan shall <U><B>be extended and </B></U>terminate on
<STRIKE><B>February&nbsp;14, 2015</B></STRIKE><U><B>May&nbsp;13, 2019</B></U>. This <STRIKE><B>First</B></STRIKE><U><B>Second</B></U> Amendment shall be effective as of the date on which it is approved by the Company&#146;s
<B><STRIKE>shareholders</STRIKE><U>stockholders</U></B> at the <STRIKE><B>Company&#146;s 2010</B></STRIKE><U><B>2014</B></U> Annual Meeting. </P>
<P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 2. </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>DEFINITIONS
AND CONSTRUCTION </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><I></I>2.1<I> Definitions</I>. Whenever used in the Plan, the following terms shall have the meanings set forth
below and, when the meaning is intended, the initial letter of the word is capitalized:<I> </I></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(a) &#147;Award&#148; means the agreement
of the Company to pay compensation to a Participant upon the attainment of specified Performance Goals. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(b) &#147;Award Agreement&#148;
means the written agreement evidencing the terms and conditions of an Award. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(c) &#147;Board&#148; or &#147;Board or Directors&#148;
means the Board of Directors of Meritage Homes Corporation. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(d) &#147;Code&#148; means the Internal Revenue Code of 1986, as amended from
time to time. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(e) &#147;Committee&#148; means the Compensation Committee of the Board or the committee appointed by the Board pursuant to
Article 3 to administer the Plan. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(f) &#147;Company&#148; means Meritage Homes Corporation, or any successor thereto. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(g) &#147;Covered Employee&#148; means an Employee <U><B>with the title of Chief Executive Officer, Chief Financial Officer, or Executive Vice
President or</B></U><U> </U>who is a &#147;covered employee&#148; within the meaning of Section&nbsp;162(m) of the Code. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">B-1 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(h) &#147;Director&#148; means any individual who is a member of the Board of Directors of the
Company. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(i) &#147;Employee&#148; means any full-time, nonunion employee of the Company. Directors who are not otherwise employed by the
Company shall not be considered Employees under this Plan. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(j) &#147;Participant&#148; means a Covered Employee who is designated by the
Committee to participate in the Plan for a Performance Period pursuant to Article 4. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(k) &#147;Performance Criteria&#148; means the
criteria that the Committee selects for purposes of establishing the Performance Goal or Performance Goals for a Participant for a Performance Period. The Performance Criteria that will be used to establish Performance Goals are limited to the
following: pre- or after-tax net earnings, earnings before interest expense (including interest amortized to cost of sales) and income taxes, including or excluding, at the discretion of the Committee, non-cash charges, impairments, and similar
one-time, non-recurring or extraordinary charges (&#147;EBIT&#148;), earnings before interest expense (including interest amortized to cost of sales), income taxes, depreciation and amortization, including or excluding, at the discretion of the
Committee, non-cash charges, impairments, and similar one-time, non-recurring or extraordinary charges (&#147;EBITDA&#148;), revenue growth, operating income, operating cash flow, return on net assets, operating expenses, including, without
limitation, general and administrative expenses, return on shareholders&#146; equity, return on assets, return on capital, Share price growth, shareholder returns, gross or net profit margin, earnings per Share, price per Share, market share,
operational metrics, including but not limited to, number of sales<STRIKE><B> per</B></STRIKE><U><B>, closings and backlog for a</B></U><STRIKE></STRIKE> community<U><B>, division or company-wide</B>,</U> community growth, specs per community or
time to construct a home, objective customer service or satisfaction ratings, whether measured internally or by an accepted third party, any of which may be measured either in absolute terms or as compared to any incremental increase or as compared
to results of a budget or peer group. The Committee may provide that the Performance Criteria may include or exclude extraordinary charges, non-recurring or unusual items, accounting charges or similar items. The Committee shall, within the time
prescribed by Section&nbsp;162(m) of the Code, define in an objective fashion the manner of calculating the Performance Criteria it selects to use for such Performance Period for such Participant. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(l) &#147;Performance Goals&#148; means, for a Performance Period, the goals established in writing by the Committee for the Performance
Period based upon the Performance Criteria. Depending on the Performance Criteria used to establish such Goal, the Goal may be expressed in terms of overall Company performance or the performance of an operating unit, division, or community. The
Committee, in its discretion, may, within the time prescribed by Section&nbsp;162(m) of the Code, adjust or modify the calculation of Performance Goals for such Performance Period in order to prevent the dilution or enlargement of the rights of
Participants, (i)&nbsp;in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event, or development; and (ii)&nbsp;in recognition of, or in anticipation of, any other unusual or nonrecurring events
affecting the Company, or the financial statements of the Company, or in response to, or in anticipation of, changes in applicable laws, regulations, accounting principles, or business conditions. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(m) &#147;Performance Period&#148; means the one or more periods of time, which may be of varying and overlapping durations, as the Committee
may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant&#146;s right to, and the payment of, compensation under the Plan. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(n) &#147;Shares&#148; means the shares of common stock of Meritage Homes Corporation. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><I></I>2.2<I> Severability</I>. In the event that a court of competent jurisdiction determines that any portion of this Plan is in violation
of any statute, common law, or public policy, then only the portions of this Plan that violate such statute, common law, or public policy shall be stricken. All portions of this Plan that do not violate any statute or public policy shall continue in
full force and effect. Further, any court order striking any portion of this Plan shall modify the stricken terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Plan.<I> </I></P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">B-2 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 3. </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ADMINISTRATION </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><I></I>3.1<I> The Committee</I>. The Plan shall be administered by the Compensation Committee of the Board, or by any other Committee
appointed by the Board consisting of not less than two Directors who qualify as &#147;outside directors&#148; under Section&nbsp;162(m) of the Code and the regulations issued thereunder. The members of the Committee shall be appointed from time to
time by, and shall serve at the discretion of, the Board of Directors.<I> </I></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">3.2 <I>Authority of the Committee</I>. The Committee shall
have all the authority that is necessary or helpful to enable it to discharge its responsibilities under the Plan. Without limiting the generality of the preceding sentence, the Committee shall have the exclusive right to interpret the Plan, to
determine eligibility for participation in the Plan, to decide all questions concerning eligibility for and the amount of Awards payable under the Plan, to establish and administer the Performance Goals and certify whether, and to what extent, they
are attained, to cancel and reissue any Awards granted hereunder in the event the Award lapses for any reason (provided that the Committee shall not have the authority to re-price previously issued and currently outstanding Awards without
shareholder approval), to construe any ambiguous provisions of the Plan, to correct any default, to supply any omission, to reconcile any inconsistency, to issue administrative guidelines as an aide to the administration of the Plan, to make
regulations for carrying out the Plan, and to decide any and all questions arising in the administration, interpretation, and application of the Plan. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><I></I>3.3<I> Decisions Binding</I>. All determinations and decisions made by the Committee pursuant to the provisions of the Plan and all
related orders or resolutions of the Board of Directors shall be final, conclusive, and binding on all persons, including the Company, its stockholders, Employees, Participants, and their estates and beneficiaries.<I> </I></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><I></I>3.4<I> Section&nbsp;162(m) Compliance</I>. This Plan shall be administered to comply with Section&nbsp;162(m) of the Code and, if any
provisions of the Plan cause any Award to not qualify as performance-based compensation under Section&nbsp;162(m) of the Code, that provision shall be stricken from this Plan, but the other provisions of this Plan shall remain in effect. Any action
striking any portion of this Plan shall modify the stricken terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Plan. Furthermore, if any portion of the Plan or any Award Agreement conflicts
with Section&nbsp;162(m) or the regulations issued thereunder, the provisions of Section&nbsp;162(m) and such regulations shall control.<I> </I></P>
<P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 4. </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ELIGIBILITY
AND PARTICIPATION </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><I></I>4.1<I> Eligibility</I>. Participation is limited in any fiscal year to Employees who the Committee concludes
will be Covered Employees for such year.<I> </I></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><I></I>4.2<I> Actual Participation</I>. From among the Covered Employees eligible to
participate each year, the Committee may select those to receive Awards in any one or more Performance Periods under the Plan.<I> </I></P>
<P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 5. </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>FORM OF
AWARDS</B>.<B> </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Awards shall be paid in cash. The Committee may, in its sole discretion, subject any Award to such terms, conditions,
restrictions, or limitations (including but not limited to restrictions on transferability, vesting, termination of employment for cause or otherwise, or change of control) that the Committee deems to be appropriate, provided that such terms are not
inconsistent with the terms of the Plan or Section&nbsp;162(m) of the Code. All Awards will be evidenced by an Award Agreement. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">B-3 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 6. </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>DETERMINATION AND LIMITATION OF AWARDS</B>.<B> </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><I></I>6.1<I> Determination of Awards</I>. Within the time prescribed by Section&nbsp;162(m) of the Code for each Performance Period, the
Committee shall, in its sole discretion, determine and establish:<I> </I></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(a) the Performance Goals applicable to the Performance Period
for each Participant; </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(b) the total dollar amount (or formula pursuant to which the total dollar amount is determined) payable to each
Participant under the Award based upon attaining the Performance Goals; and </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(c) such other terms and conditions of such Award as the
Committee determines to be appropriate under the circumstances. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Such determinations shall be reflected in the minutes of a Committee meeting, or in a
written action adopted without the necessity of a meeting, and also shall be documented in the Award Agreement. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><B></B>6.2<B></B><I>
Limitations of Awards</I><B></B>. If only one Performance Goal is established for a Performance Period, the Performance Goal for such Performance Period must be achieved in order for a Participant to receive payment for an Award for such Performance
Period. If more than one Performance Goal is established for a Performance Period, one or more of the Performance Goals for such Performance Period must be achieved in order for a Participant to receive payment for an Award for such Performance
Period, all as set forth in accordance with the terms of the Award Agreement. Furthermore, the Committee is authorized at any time during or after a Performance Period to reduce or eliminate (but not to increase) the amount of an Award payable to
any Covered Employee for a Performance Period for any reason.<B><U> Notwithstanding the foregoing, the Committee, in its sole discretion may in an Award Agreement or in an employment agreement, provide that if a Participant dies or becomes disabled
(as defined in the Award Agreement or in an employment agreement), the Participant or the Participant&#146;s beneficiary will receive a payment for the Performance Period equal to the Participant&#146;s target Award for the Performance Period in
which the death or disability occurs. The Committee may provide in a change of control agreement or in an Award Agreement that in the event of a &#147;change of control&#148; (as defined in the Company&#146;s 2006 Stock Incentive Plan, as amended)
during the Performance Period, if (1) the Participant is employed on the date of the change of control, or (2)&nbsp;if the Participant&#146;s employment is terminated by the Company without Cause after the beginning of the Performance Period and
within 150 days prior to the change of control, the Participant shall be entitled to receive payment for an Award equal to the greater of (i)&nbsp;the Participant&#146;s target Award for the Performance Period in which the change of control occurs
or (ii)&nbsp;an amount equal to the Award the Participant would be entitled to receive by projecting actual performance as of the date of the change of control through the end of the Performance Period. </U> </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><I></I>6.3<I> Maximum Awards</I>. Notwithstanding any provision in the Plan to the contrary, the maximum Award payable to any Covered Employee
under the Plan for a Performance Period shall be <I></I><B><STRIKE>1.85</STRIKE><U>2.25</U></B><I></I>% of EBITDA, before consideration of bonuses paid to Covered Employees.<I> </I></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><I></I>6.4<I> Employment Continuation</I>. Unless otherwise determined by the Committee, provided in the Award Agreement, or required by
applicable law, no payment pursuant to this Plan shall be made to a Participant unless the Participant is employed by the Company on the last day of the Performance Period.<I> </I></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><I></I>6.5<I> Payment of Awards</I>. The Awards under this Plan shall be paid to each Participant no later than the 15th day of the third
month following the calendar year in which the Award is earned, or, if payment by such date is not &#147;administratively practicable&#148; (as determined by the regulations issued under Section&nbsp;409A of the Code), such later date as permitted
by the regulations issued under Section&nbsp;409A of the Code.<I> </I></P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">B-4 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><B><U>6.6</U></B><B><I><U> Non-exclusive</U></I></B><B><U>. Nothing in the Plan shall limit the
authority of the Company, the Board or the Committee to adopt such other compensation arrangements, as it may deem desirable for any Participant.</U> </B></P>
<P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 7. </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>RIGHTS OF
EMPLOYEES </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><I></I>7.1<I> Employment</I>. Nothing in the Plan shall interfere with or limit in any way the right of the Company to
terminate any Participant&#146;s employment at any time, nor confer upon any Participant any right to continue in the employ of the Company.<I> </I></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><I></I>7.2<I> Participation</I>. No Employee shall have the right to be selected to receive an Award under this Plan, or, having been so
selected, to be selected to receive a future Award.<I> </I></P> <P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 8. </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>AMENDMENT, MODIFICATION, AND TERMINATION </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Committee may suspend or terminate the Plan at any time with or without prior notice. In addition, the Committee may from time to time and
with or without prior notice, amend or modify the Plan in any manner, but may not without shareholder approval adopt any amendment that would require the vote of shareholders of the Company pursuant to Section&nbsp;162(m) of the Code. </P>
<P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 9. </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>WITHHOLDING
</B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes (including the Participant&#146;s FICA obligation) required by law to be withheld with respect to any grant, exercise, or payment made under or as a result of this Plan. </P>
<P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 10. </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>SUCCESSORS
</B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">All obligations of the Company under the Plan, with respect to Awards granted hereunder, shall be binding on any successor to the
Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company. </P>
<P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>ARTICLE 11. </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>REQUIREMENTS OF LAW </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><I></I>11.1<I> Requirements of Law</I>. The granting of Awards under the Plan shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies as may be required.<I> </I></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><I></I>11.2<I> Governing Law</I>. The Plan, and all
agreements hereunder, shall be governed by the laws of the State of Maryland.<I> </I></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><I></I>11.3<I> Section&nbsp;409A of the Code</I>. If
any payments under this Plan are subject to the provisions of Section&nbsp;409A of the Code, it is intended that the Plan will comply fully with and meet all the requirements of Section&nbsp;409A of the Code.<I> </I></P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">B-5 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>MERITAGE HOMES CORPORATION </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Annual Meeting of Stockholders May 14, 2014 </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The shareholder(s) signing below hereby appoint(s) Steven J. Hilton, C. Timothy White and Larry W. Seay, or any of them, as proxies, each with the power to
appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common stock of MERITAGE HOMES CORPORATION that the shareholder(s) is/are entitled to vote at the
Annual Meeting of shareholders to be held at 10:00 AM, local time on May 14, 2014, at Meritage&#146;s new headquarters at 8800 E. Raintree Drive, Suite 300, Scottsdale, Arizona 85260, and any adjournment or postponement thereof. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO SUCH DIRECTION IS MADE, THIS PROXY WILL BE VOTED &#147;FOR&#148;
EACH OF THE DIRECTOR NOMINEES AND &#147;FOR&#148; EACH OF THE PROPOSALS 2, 3, 4 AND 5, AND AT THE DISCRETION OF THE PROXY HOLDERS ON ANY OTHER MATTER(S) THAT PROPERLY COME BEFORE THE MEETING, OR ANY POSTPONEMENT OR ADJOURNMENT THEREOF. </B></P>
<P STYLE="margin-top:36pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>CONTINUED AND TO BE SIGNED ON REVERSE </B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<P STYLE="line-height:3.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1px solid #000000">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B></B><FONT
STYLE="FONT-FAMILY:'WINGDINGS 3'">&#112;</FONT><B></B><B>&nbsp;&nbsp;PLEASE DETACH ALONG PERFORATED LINE AND MAIL IN THE ENVELOPE PROVIDED.&nbsp;&nbsp;</B><FONT STYLE="FONT-FAMILY:'WINGDINGS 3'">&#112;</FONT><B></B><B> </B></P>
<P STYLE="margin-top:60pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>of Stockholders to be held May 14, 2014. The Proxy Statement and our 2013 Annual </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Report to Stockholders are available at: <U>www.allianceproxy.com/meritagehomes/2014</U> </B></P>

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<TD VALIGN="bottom" ALIGN="center"><B>FOR</B></TD>
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<TD VALIGN="bottom" ALIGN="center"><B>AGAINST</B></TD>
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<TD VALIGN="bottom" ALIGN="center"><B>ABSTAIN</B></TD></TR>
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<TD VALIGN="top" COLSPAN="13">1. Election of four Class I Directors, each to hold office until our 2016 annual meeting,</TD>
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<TD VALIGN="top">2.</TD>
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<TD VALIGN="bottom">Ratification of the selection of Deloitte &amp; Touche LLP as the Company&#146;s independent</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></TD></TR>
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<TD COLSPAN="13" VALIGN="top"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
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<TD VALIGN="top"></TD>
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<TD VALIGN="bottom">registered public accounting firm for the</TD>
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<TD VALIGN="bottom">2014 fiscal year,</TD>
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<TD VALIGN="bottom" ALIGN="center"><B>&nbsp;FOR</B></TD>
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<TD VALIGN="bottom" ALIGN="center"><B>&nbsp;WITHHOLD</B><BR> <P STYLE="margin-bottom:1pt; margin-top:0pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>&nbsp;AUTHORITY</B></P></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center"><B>&nbsp;FOR&nbsp;ALL</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top"></TD>
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<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P> <P STYLE="margin-bottom:1pt; margin-top:0pt; font-size:8pt; font-family:Times New Roman">3.</P></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:8pt; font-family:Times New Roman">Advisory vote to approve compensation of</P></TD>
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<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></TD></TR>
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<TD VALIGN="bottom" ALIGN="center"><B>&nbsp;ALL</B></TD>
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<TD VALIGN="bottom" ALIGN="center"><B>&nbsp;FOR ALL</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center"><B>&nbsp;EXCEPT</B></TD>
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<TD VALIGN="bottom">our Named Executive Officers,</TD>
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<TD VALIGN="bottom">01</TD>
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<TD VALIGN="bottom">&nbsp;Steven&nbsp;J.&nbsp;Hilton</TD>
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<TD VALIGN="bottom">&nbsp;&nbsp;02</TD>
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<TD VALIGN="bottom">&nbsp;Raymond&nbsp;Oppel</TD>
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<TD VALIGN="bottom" ALIGN="center">&nbsp;<FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></TD>
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<TD VALIGN="bottom" ALIGN="center">&nbsp;<FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center">&nbsp;<FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></TD>
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<TD VALIGN="top"> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P> <P STYLE="margin-bottom:1pt; margin-top:0pt; font-size:8pt; font-family:Times New Roman">4.</P></TD>
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<TD VALIGN="bottom"> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:8pt; font-family:Times New Roman">Approve the Amended and Restated 2006</P></TD>
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<TD VALIGN="top">03</TD>
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<TD VALIGN="bottom">&nbsp;Richard&nbsp;T.&nbsp;Burke,&nbsp;Sr.</TD>
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<TD VALIGN="bottom">&nbsp;&nbsp;04</TD>
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<TD VALIGN="bottom">&nbsp;Dana&nbsp;C.&nbsp;Bradford</TD>
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<TD VALIGN="bottom">Stock Incentive Plan,</TD>
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<TD VALIGN="top" COLSPAN="13">INSTRUCTIONS: To withhold authority to vote for any individual,</TD>
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<TD VALIGN="top">5.</TD>
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<TD VALIGN="bottom">Approve an amendment to and extension of</TD>
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<TD VALIGN="top" COLSPAN="11">mark, &#147;For All Except&#148; and write the nominee&#146;s name(s) on the line</TD>
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<TD VALIGN="bottom">the Executive Management Incentive Plan.</TD>
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<TD VALIGN="top" COLSPAN="3">below.</TD>
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<TD NOWRAP VALIGN="bottom">&nbsp;&nbsp;</TD>
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<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000">&nbsp;</TD>
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<TD VALIGN="top" COLSPAN="5">NOTE: The conduct of any other business that may properly come before the meeting or any adjournment or postponement thereof.</TD>
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<TD VALIGN="bottom" COLSPAN="7" ALIGN="right">I plan to attend the meeting&nbsp;&nbsp;<FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></TD></TR>
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<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
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<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:8pt">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
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<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" COLSPAN="7" ROWSPAN="4">Please sign your name exactly as it appears hereon. When signing as attorney, executor, administrator, trustee, guardian, or other fiduciary, please give full title as such. Joint owners should each sign
personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer.</TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:8pt">
<TD VALIGN="top"></TD>
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<TR STYLE="font-family:Times New Roman; font-size:8pt">
<TD VALIGN="top"></TD>
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<TD VALIGN="bottom">&nbsp;</TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:8pt">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
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<TD VALIGN="bottom">&nbsp;</TD></TR></TABLE> <DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="89%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:8pt">


<TR>
<TD WIDTH="1%"></TD>
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<TD WIDTH="11%"></TD>
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<TD></TD>
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<TD></TD>
<TD></TD>
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<TD></TD>
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<TD></TD>
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<TD></TD>
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<TD WIDTH="5%"></TD>
<TD VALIGN="bottom"></TD>
<TD WIDTH="54%"></TD></TR>

<TR STYLE="font-family:Times New Roman; font-size:8pt">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
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<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:8pt; font-family:Times New Roman">Date:</P></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:8pt; font-family:Times New Roman" ALIGN="right">&nbsp;</P></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="4"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="4"></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:8pt">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
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<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:8pt; font-family:Times New Roman">&nbsp;</P></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:8pt">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" COLSPAN="3" ALIGN="center"><B>CONTROL&nbsp;NUMBER</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD NOWRAP VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
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<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">Signature</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:8pt">
<TD VALIGN="top"></TD>
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<TD COLSPAN="3" VALIGN="bottom"></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:8pt">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="middle" ALIGN="right">


<IMG SRC="g680825img1.jpg" ALT="LOGO">
&nbsp;</TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000">&nbsp;</TD>
<TD COLSPAN="3" VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-RIGHT:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
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<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:8pt; font-family:Times New Roman">&nbsp;</P></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:8pt">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
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<TD VALIGN="bottom">&nbsp;</TD>
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<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" COLSPAN="3">Signature (if held jointly)</TD></TR>
</TABLE></DIV> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P> <P STYLE="line-height:3.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1px solid #000000">&nbsp;</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B></B><FONT STYLE="FONT-FAMILY:'WINGDINGS 3'">&#112;</FONT><B></B><B>&nbsp;&nbsp;PLEASE DETACH ALONG PERFORATED LINE AND MAIL IN THE ENVELOPE
PROVIDED.&nbsp;&nbsp;</B><FONT STYLE="FONT-FAMILY:'WINGDINGS 3'">&#112;</FONT><B></B><B> </B></P> <P STYLE="font-size:24pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:8pt" ALIGN="center">


<TR>
<TD WIDTH="27%"></TD>
<TD VALIGN="bottom"></TD>
<TD WIDTH="12%"></TD>
<TD VALIGN="bottom"></TD>
<TD WIDTH="15%"></TD>
<TD VALIGN="bottom"></TD>
<TD WIDTH="14%"></TD>
<TD VALIGN="bottom"></TD>
<TD WIDTH="28%"></TD></TR>

<TR STYLE="font-family:Times New Roman; font-size:8pt">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center"><B>&nbsp;&nbsp;&nbsp;&nbsp;CONTROL&nbsp;NUMBER&nbsp;&nbsp;&nbsp;&nbsp;</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:8pt">
<TD VALIGN="bottom"></TD>
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<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:8pt">
<TD VALIGN="middle"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="middle" ALIGN="right">


<IMG SRC="g680825img1.jpg" ALT="LOGO">
&nbsp;</TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000; BORDER-BOTTOM:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-RIGHT:1px solid #000000; BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
</TABLE> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>PROXY VOTING INSTRUCTIONS </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">Please have your 11 digit control number ready when voting by Internet or Telephone </P>
<P STYLE="font-size:24pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:8pt" ALIGN="center">


<TR>
<TD WIDTH="1%"></TD>
<TD VALIGN="bottom"></TD>
<TD WIDTH="31%"></TD>
<TD VALIGN="bottom"></TD>
<TD WIDTH="1%"></TD>
<TD VALIGN="bottom"></TD>
<TD WIDTH="29%"></TD>
<TD VALIGN="bottom"></TD>
<TD WIDTH="1%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="30%"></TD>
<TD VALIGN="bottom"></TD>
<TD WIDTH="1%"></TD></TR>


<TR STYLE="font-family:Times New Roman; font-size:8pt">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-RIGHT:1px solid #000000"> <P STYLE="margin-top:0pt;margin-bottom:0pt" ALIGN="center">


<IMG SRC="g680825img2.jpg" ALT="LOGO">
</P> <P STYLE="font-size:6pt; margin-top:0pt; margin-bottom:1pt" align="left">&nbsp;</P></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-RIGHT:1px solid #000000"> <P STYLE="margin-top:0pt;margin-bottom:0pt" ALIGN="center">


<IMG SRC="g680825img3.jpg" ALT="LOGO">
</P> <P STYLE="font-size:6pt; margin-top:0pt; margin-bottom:1pt" align="left">&nbsp;</P></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000; BORDER-RIGHT:1px solid #000000"> <P STYLE="margin-top:0pt;margin-bottom:0pt" ALIGN="center">


<IMG SRC="g680825img4.jpg" ALT="LOGO">
</P> <P STYLE="font-size:6pt; margin-top:0pt; margin-bottom:1pt" align="left">&nbsp;</P></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-RIGHT:1px solid #000000"><B><U>INTERNET</U></B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-RIGHT:1px solid #000000"><B><U>TELEPHONE</U></B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-RIGHT:1px solid #000000"><B><U>MAIL</U></B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-RIGHT:1px solid #000000"><B>Vote Your Proxy on the Internet:</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-RIGHT:1px solid #000000"><B>Vote Your Proxy by Phone:</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-RIGHT:1px solid #000000"><B>Vote Your Proxy by Mail:</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="BORDER-RIGHT:1px solid #000000"> <P STYLE="font-size:3pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Go to
<U>www.cesvote.com</U></B></P> <P STYLE="font-size:3pt; margin-top:0pt; margin-bottom:1pt" align="left">&nbsp;</P></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="BORDER-RIGHT:1px solid #000000"> <P STYLE="font-size:3pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Call 1 (888)
693-8683</B></P> <P STYLE="font-size:3pt; margin-top:0pt; margin-bottom:1pt" align="left">&nbsp;</P></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="BORDER-RIGHT:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-RIGHT:1px solid #000000">Have your proxy card available</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-RIGHT:1px solid #000000">Use any touch-tone telephone to</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-RIGHT:1px solid #000000">Mark, sign, and date your proxy</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-RIGHT:1px solid #000000">when you access the above</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-RIGHT:1px solid #000000">vote your proxy. Have your proxy</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-RIGHT:1px solid #000000">card, then detach it, and return it</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-RIGHT:1px solid #000000">website. Follow the prompts to</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-RIGHT:1px solid #000000">card available when you call.</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-RIGHT:1px solid #000000">in the postage-paid envelope</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-RIGHT:1px solid #000000">vote your shares.</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-RIGHT:1px solid #000000">Follow the voting instructions to</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-RIGHT:1px solid #000000">provided.</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"></TD>
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