Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
In order to ensure that the information we must disclose in our filings with the SEC is recorded, processed, summarized and reported on a timely basis, we have developed and implemented disclosure controls and procedures. Our management, with the participation of our chief executive officer ("CEO") and chief financial officer ("CFO"), has reviewed and evaluated the effectiveness of our disclosure controls and procedures, as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e), as of December 31, 2022 (the “Evaluation Date”). Based on such evaluation, management has concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective at a reasonable assurance level in ensuring that information that is required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosures.
There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our fiscal quarter ended December 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected. Also, projections of any internal control effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with internal control policies or procedures may deteriorate. Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2022. The effectiveness of our internal control over financial reporting as of December 31, 2022 has been audited by Deloitte & Touche LLP, an independent registered accounting firm, as stated in their attestation report, which is included herein.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of Meritage Homes Corporation:
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Meritage Homes Corporation and subsidiaries (the “Company”) as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2022, of the Company and our report dated February 15, 2023, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ DELOITTE & TOUCHE LLP
Tempe, Arizona
February 15, 2023
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Item 9B. Other Information
None
Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections
None
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Except as set forth herein, information required in response to this item is incorporated by reference from the information contained in our 2023 Proxy Statement (which will be filed with the SEC no later than 120 days following the Company’s fiscal year end (the "2023 Proxy Statement")). The information required by Item 10 regarding our executive officers appears in Part I, Item 1 of this Annual Report as permitted by General Instruction G(3).
Item 11. Executive Compensation
Information required in response to this item is incorporated by reference to our 2023 Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Information required in response to this item is incorporated by reference to our 2023 Proxy Statement.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Information required in response to this item is incorporated by reference to our 2023 Proxy Statement.
Item 14. Principal Accountant Fees and Services
Information required in response to this item is incorporated by reference to our 2023 Proxy Statement.
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PART IV
Item 15. Exhibits and Financial Statement Schedules
(a) Financial Statements and Schedules
(i) Financial Statements:
The consolidated financial statements are included under Part II, Item 8 in this Annual Report on Form 10-K.
(ii) Financial Statement Schedules:
Schedules have been omitted because of the absence of conditions under which they are required or because the required information is included in the consolidated financial statements or notes thereto.
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(b) Exhibits
Exhibit
Number Description Page or Method of Filing
2.1 Agreement and Plan of Reorganization, dated as of September 13, 1996, by and among Homeplex, the Monterey Merging Companies and the Monterey Stockholders
Incorporated by reference to Appendix A of Form S-4 Registration Statement No. 333-15937
3.1 Restated Articles of Incorporation of Meritage Homes Corporation
Incorporated by reference to Exhibit 3 of Form 8-K dated June 20, 2002
3.1.1 Amendment to Articles of Incorporation of Meritage Homes Corporation
Incorporated by reference to Exhibit 3.1 of Form 10-Q for the quarter ended September 30, 1998
3.1.2 Amendment to Articles of Incorporation of Meritage Homes Corporation
Incorporated by reference to Exhibit 3.1 of Form 8-K dated September 15, 2004
3.1.3 Amendment to Articles of Incorporation of Meritage Homes Corporation
Incorporated by reference to Appendix A of the Proxy Statement for the 2006 Annual Meeting of Stockholders
3.1.4 Amendment to Articles of Incorporation of Meritage Homes Corporation
Incorporated by reference to Appendix B of Proxy Statement for the 2008 Annual Meeting of Stockholders
3.1.5 Amendment to Articles of Incorporation of Meritage Homes Corporation
Incorporated by reference to Appendix A of the Definitive Proxy Statement filed with the SEC on January 9, 2009
3.2 Amended and Restated Bylaws of Meritage Homes Corporation
Incorporated by reference to Exhibit 3.1 of Form 8-K dated August 12, 2022
4.1 Form of Specimen of Common Stock Certificate
Incorporated by reference to Exhibit 4.1 of Form 10-K for the year ended December 31, 2007
4.2 Description of securities of Meritage Homes Corporation registered under Section 12 of the Exchange Act
Incorporated by reference to Exhibit 4.2 of Form 10-K for the year ended December 31, 2019
4.3 Indenture dated June 2, 2015 (re 6.00% Senior Notes due 2025) and form of 6.00% Senior Note
Incorporated by reference to Exhibit 4.1 of Form 8-K dated June 2, 2015
4.3.1 First Supplemental Indenture (re 6.00% Senior Notes due 2025)
Incorporated by reference to Exhibit 4.3 of Form 10-Q for the quarter ended June 30, 2019
4.3.2 Second Supplemental Indenture (re 6.00% Senior Notes due 2025)
Incorporated by reference to Exhibit 4.4.2 of Form 10-K for the year ended December 31, 2020
4.3.3 Third Supplemental Indenture (re 6.00% Senior Notes due 2025)
Incorporated by reference to Exhibit 4.4.3 of Form 10-K for the year ended December 31, 2020
4.4 Indenture, dated June 6, 2017 (re 5.125% Senior Notes due 2027) and form of 5.125% Senior Note
Incorporated by reference to Exhibit 4.1 of Form 8-K dated June 6, 2017
4.4.1 First Supplemental Indenture (re 5.125% Senior Notes due 2027)
Incorporated by reference to Exhibit 4.4 of Form 10-Q for the quarter ended June 30, 2019
4.4.2 Second Supplemental Indenture (re 5.125% Senior Notes due 2027)
Incorporated by reference to Exhibit 4.5.2 of Form 10-K for the year ended December 31, 2020.
4.4.3 Third Supplemental Indenture (re 5.125% Senior Notes due 2027)
Incorporated by reference to Exhibit 4.5.3 of Form 10-K for the year ended December 31, 2020.
4.5 Indenture, dated April 15, 2021 (re 3.875% Senior Notes due 2029) and form of 3.875% Senior Note
Incorporated by reference to Exhibit 4.1 of Form 8-K dated April 15, 2021
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Exhibit
Number Description Page or Method of Filing
10.1 2018 Stock Incentive Plan *
Incorporated by reference to Appendix A of the Proxy Statement for the 2018 Annual Meeting of Stockholders
10.2 Meritage Homes Corporation Amended and Restated 2006 Stock Incentive Plan, as amended *
Incorporated by reference to Appendix A of the Proxy Statement for the 2014 Annual Meeting of Stockholders
10.2.1 Amendment to the Meritage Homes Corporation Amended and Restated 2006 Stock Incentive Plan *
Incorporated by reference to Appendix of the Proxy Statement for the 2016 Annual Meeting of Stockholders
10.2.2 Representative Form of Restricted Stock Agreement *
Incorporated by reference to Exhibit 4.9 of Form S-8 Registration Statement No. 333-166991
10.2.3 Representative Form of Restricted Stock Agreement (2006 Plan; Executive Officer) *
Incorporated by reference to Exhibit 4.9.1 of Form S-8 Registration Statement No. 333-166991
10.2.4 Representative Form of Restricted Stock Agreement (2006 Plan; Non-Employee Director) *
Incorporated by reference to Exhibit 4.9.2 of Form S-8 Registration Statement No. 333-166991
10.2.5 Representative Form of Non-Qualified Stock Option Agreement (2006 Plan) *
Incorporated by reference to Exhibit 4.10 of Form S-8 Registration Statement No. 333-166991
10.2.6 Representative Form of Incentive Stock Option Agreement (2006 Plan) *
Incorporated by reference to Exhibit 4.4 of Form S-8 Registration Statement No. 333-134637
10.2.7 Representative Form of Stock Appreciation Rights Agreement (2006 Plan) *
Incorporated by reference to Exhibit 4.5 of Form S-8 Registration Statement No. 333-134637
10.2.8 Representative Form of Performance Share Award Agreement *
Incorporated by reference to Exhibit 10.9 of Form 8-K dated March 28, 2014
10.2.9 Representative Form of Restricted Stock Unit Agreement *
Incorporated by reference to Exhibit 10.10 of Form 8-K dated March 28, 2014
10.3 Employment Agreement between the Company and Steven J. Hilton *
Incorporated by reference to Exhibit 10.3 of Form 8-K dated January 22, 2021
10.4 Employment Agreement between the Company and Philippe Lord *
Incorporated by reference to Exhibit 10.1 of Form 8-K dated January 22, 2021
10.5 Employment Agreement between the Company and Hilla Sferruzza *
Incorporated by reference to Exhibit 10.4 of Form 8-K dated January 22, 2021
10.6 Employment Agreement between the Company and Javier Feliciano *
Incorporated by reference to Exhibit 10.6 of Form 8-K dated January 22, 2021
10.7 Employment Agreement between the Company and Clinton Szubinski*
Incorporated by reference to Exhibit 10.1 of Form 8-K dated August 12, 2021
10.8 Employment Agreement between the Company and Malissia Clinton*
Incorporated by reference to Exhibit 10.1 of Form 10-Q for the quarter ended March 31, 2022
10.9 Meritage Homes Corporation 2015 Nonqualified Deferred Compensation Plan *
Incorporated by reference to Exhibit 10.2 of Form 10-Q for the quarter ended June 30 2021
10.10 Meritage Homes Corporation Executive Severance Plan *
Incorporation by reference to Exhibit 10.7 of Form 8-K dated January 22, 2021
10.11 Amended and Restated Credit Agreement, dated as of June 13, 2014
Incorporated by reference to Exhibit 10.1 of Form 8-K dated June 13, 2014
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Exhibit
Number Description Page or Method of Filing
10.11.1 First Amendment to Amended and Restated Credit Agreement
Incorporated by reference to Exhibit 10.1 of Form 8-K dated July 9, 2015
10.11.2 Second Amendment to Amended and Restated Credit Agreement
Incorporation by reference to Exhibit 10.1 of Form 8-K dated June 29, 2016
10.11.3 Third Amendment to Amended and Restated Credit Agreement
Incorporated by reference to Exhibit 10.1 of Form 8-K dated May 31, 2017
10.11.4 Fourth Amendment to Amended and Restated Credit Agreement
Incorporated by reference to Exhibit 10.1 to Form 8-K dated June 29, 2018
10.11.5 Fifth Amendment to Amended and Restated Credit Agreement
Incorporated by reference to Exhibit 10.1 to Form 8-K dated June 27, 2019
10.11.6 Sixth Amendment to Amended and Restated Credit Agreement
Incorporated by reference to Exhibit 10.1 to Form 8-K dated December 23, 2020
10.11.7 Seventh Amendment to Amended and Restated Credit Agreement
Incorporated by reference to Exhibit 10.1 to Form 8-K dated December 17, 2021
10.12 Philippe Lord - Notice of Approved 2022 Compensation *
Incorporated by reference to Exhibit 10.1 to Form 8-K dated December 20, 2021
10.13 Hilla Sferruzza - Notice of Approved 2022 Compensation *
Incorporated by reference to Exhibit 10.2 to Form 8-K dated December 20, 2021
10.14 Javier Feliciano - Notice of Approved 2022 Compensation *
Incorporated by reference to Exhibit 10.4 to Form 8-K dated December 20, 2021
10.15 Clint Szubinski - Notice of Approved 2022 Compensation *
Incorporated by reference to Exhibit 10.3 to Form 8-K dated December 20, 2021
10.16 Form of Indemnification Agreement *
Incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter ended June 30, 2021
21 List of Subsidiaries
Filed herewith
22 List of Guarantor Subsidiaries
Filed herewith
23 Consent of Deloitte & Touche LLP
Filed herewith
24 Powers of Attorney
See Signature Page
31.1 Rule 13a-14(a)/15d-14(a) Certification of Phillippe Lord, Chief Executive Officer
Filed herewith
31.2 Rule 13a-14(a)/15d-14(a) Certification of Hilla Sferruzza, Chief Financial Officer
Filed herewith
32.1 Section 1350 Certification of Chief Executive Officer and Chief Financial Officer
Filed herewith
101.0 The following financial statements from Meritage Homes Corporation Annual Report on Form 10-K for the year ended December 31, 2022, filed on February 15, 2023, formatted in Inline XBRL (Extensible Business Reporting Language); (i) Consolidated Balance Sheets, (ii) Consolidated Income Statements, (iii) Consolidated Statements of Stockholders' Equity (iv) Consolidated Statements of Cash Flows and (v) the Notes to Consolidated Financial Statements.
104.0 The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, formatted in Inline XBRL.
* Indicates a management contract or compensation plan.
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Item 16. Form 10-K Summary
Not applicable.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, this 15th day of February 2023.
MERITAGE HOMES CORPORATION,
a Maryland Corporation
By /s/ PHILLIPPE LORD
Phillippe Lord
Chief Executive Officer
By /s/ HILLA SFERRUZZA
Hilla Sferruzza
Executive Vice President and Chief Financial Officer
By /s/ ALISON SASSER
Alison Sasser
Chief Accounting Officer
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KNOW ALL PERSONS BY THESE PRESENTS , that each person whose signature appears below constitutes and appoints Phillippe Lord and Hilla Sferruzza, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as he or she might or could do in person hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
Signature Title Date
/s/ PHILLIPPE LORD Chief Executive Officer February 15, 2023
Phillippe Lord
/s/ HILLA SFERRUZZA Executive Vice President, Chief Financial Officer (Principal Financial Officer) February 15, 2023
Hilla Sferruzza
/s/ ALISON SASSER Chief Accounting Officer
(Principal Accounting Officer) February 15, 2023
Alison Sasser
/s/ STEVEN J. HILTON Executive Chairman February 15, 2023
Steven J. Hilton
/s/ PETER L. AX Director February 15, 2023
Peter L. Ax
/s/ RAYMOND OPPEL Director February 15, 2023
Raymond Oppel
/s/ GERALD W. HADDOCK Director February 15, 2023
Gerald W. Haddock
/s/ DANA BRADFORD Director February 15, 2023
Dana Bradford
/s/ MICHAEL R. ODELL Director February 15, 2023
Michael R. Odell
/s/ DEBORAH ANN HENRETTA Director February 15, 2023
Deborah Ann Henretta
/s/ JOSEPH KEOUGH Director February 15, 2023
Joseph Keough
/s/ P. KELLY MOONEY Director February 15, 2023
P. Kelly Mooney
/s/ LOUIS E. CALDERA Director February 15, 2023
Louis E. Caldera
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