Free Motion for Summary Judgment - District Court of Arizona - Arizona

Gasé 2:O4-¢v#OO3844R()S D0cumen{_413-22 F iIéd12/18/2006 Ffagéfl offs _

` ‘ IVIERITAGE CORPORATION .
l\/HNUTES OF THE BOARD OF DIRECTORS Y
March 6, 2002
A regular meeting of the Board of Directors of Meritage Corporation, a Maryland corporation
(the "Company") was held on March 6, 2002, commencing at 9:30 a.m. at the Company’s offices
in Scottsdale, Arizona. All of the Board members were in attendance. In addition, Larry Seay, '
the Company’s Chief Financial Officer and Steve Pidgeon, of Snell & Wilmer, the Company’s .
SEC council were present. ‘ C
V 1. Board Meetinv Minutes. The Board reviewed and approved minutes for the _
. following meetings; . A _
• l January 16, 2002, Boardof Directors Meeting A
• January, l 6, 2002, Compensation Committee Meeting
• 2002, Audit Committee Meeting
F5g,p.u¤·n»\5; .
2. Review of Year-to-Date `Results. Management reviewed with the Board the
· ’ February 2002 Sales, Closings and Backlog (see Exhibit A), the January 2002 Income Statement
and Balance Sheet ( see Exhibit B), Estimated lst Quarter Results (see Exhibit C), a Comparative
Homebuilder Analysis ( see Exhibit D), and a Company Financial Ratios Schedule {see Exhibit
E). A ‘
3. Land Acguisition Update. — ` ` - `
Texas. John Landon reviewed· the potential new subdivisions of Westminster in
. ~ Frisco, Texas, Grayson Lakes in Katy, Texas, and Featherstone in Mansfield, ”
Texas (Exhibit F) with the Board. t
~ · h l Arizona. Steve Hilton reviewed the potential new subdivisions of Indigo Ridge, A
in Tucson, Arizona and Los ·Arroyos in Tucson, Arizona (Exhibit G)Zwith the
V Board. A _ -
l ` I There were no new projects to review with the Board in California. _ J A
4 4. Approval of Stock Split. Management discussed with the Board the current price A
of the Company’s Common Stock and the various benefits that a stock split may provide the ‘ .
Company. After due discussion, the Board unanimously passed the resolutions attached as p
Exhibit H. ‘ _
5. Amendments to Stock Option Plan. Management discussed with the Board the
need to -modify a couple of the terms of the existing stock option plan, to make the plan more °
compatible with current practices. These changes l) eliminate the ability to issue options with an
exercise price below the market price at the time of issue and 2) eliminate the ability to re—price
existing options. After due discussion, the Board unanimously passed the resolutions attached as p V 1
· · Exhibit I.
V V rvnrnuuorse
Case 2:04-cv—00384-ROS Document 413-22 Filed 12/18/2006 Pag€Q1IEHential V "

4 i B4/24/2002 10: EB 972-5°‘3E—B315 JOHN LP.NDUN—Iv1ERIT/AGE ' · PAGE B2/E2
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6. New Regjmi President in N. California. Steve Hilton announced to the Board that _
he had recently hired Bob Melaughlin to replace Steve Hefener as the N. California Region p
` ` President, who is retiring et the end of June. Bob has over 20 years of homebuilding experience, ‘
· having worked most recently with Toll and before that with UDC and KB Homes. Bob also has ‘
‘ extensive experience in the N. California market. T A ·. -
7. Housing Market Conditions in Phoenix. Steve Hilton reviewed with the Bead i
the most recent R. L. Brown PhoeniJ<·H0using Market Letter. The letter noted that housing start `
trends have been negative in Phoenix for the last six months and that housing prices. were flat
_ during 2001. The letter; predicts 4,000-6,000 fewer starts and increased competition during 2002. Y
Steve noted that although business continues to be soft in our high-end Monterey/Scottsdale "
' product, business in our more moderately priced Hancock/Mexitege product remains good. .%.5.;
· 8. Report of th_g_Audit Committee. Robert Server gave the Audit Committee report
te the Board. Robert noted that KPMG found no errors or omissions during the Cempauyia
Audit other than those noted on KPMG’s Passed Adjustments Schedule, which management and
_ the Committee agreed were veryimmaterial. In addition, KPMG reviewed the Company?. 2001
y l0—K and noted that they believed it contained all required disclosures. In addition, the
Company has increased its disclosures in certain areas to improve the transparency of the
financial statements in accordance with recent SEC guidance.
l The Committee and KPMG also discussed the status of integrating the various accounting
. and computer systems ofthe Company. Based on those discussions, the Committee recommends t
» that the Company continue te integrate IT systems to produce various eoet-saving efliciencies.
9. New Markets/Acguisitlnn - Ugdate Steve Hilton and John Landon reviewed with · ‘
the Board our current status on acquisitions. They noted that we are continuing te look for and
have discussions with vzuious possible acquisition candidates. There are currently no
discussions which have risen te the level requiring Board attention.
‘ 10r Future Beard Meeting Dates. The next Beard meeting date was set for May 8,
. 2002, to be held in Dallas, Texas. This meedng will be held immediately after the Annual t`
. , Shareholders meeting.
There being no further business, the meeting was adj oumcd at approximately 11:30 am. ;’
éi
IN WITNESS WHEREOF, we have exec ed these minutes as nf the date forthe .
, above. . _ '_ "
t . Hil on T 0 . andou L . Sea =
— - haimian o-Chairman Secretary `
V ‘ ‘ · ‘ Coniidential
· . MEROOOTS7
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