UPDATE 1-Meritage to get about $10 mln from former exec

(Recasts first sentence, adds details of settlement, background)

NEW YORK, April 14 (Reuters) - Meritage Homes Corp (MTH.N) said on Monday it will record a payment of about $10 million in the second quarter to reflect an agreement it reached with its former co-chairman and co-chief executive officer.

Under the settlement, John Landon, who resigned from the company on May 17, 2006, reimbursed Meritage the amount he has been paid under an non-compete portion of his contract, the company said in a filing with the Securities and Exchange Commission.

On April 10, 2008, the company received $9,559,940 -- $2,701,613 already paid to Landon and $6,858,327 held in escrow, plus interest.

The settlement also relieves Meritage of paying the rest of the fund it either had not paid Landon or had not yet put into escrow under the pay schedule called for under the employment agreement.

Landon also has to pay an additional $875,000, to cover legal and ancillary costs, on or before Jan. 5, 2009.

Under his employment agreement, Landon had been entitled to $10 million, payable in equal monthly installments over 24 months, if he stuck to his non-compete obligations.

In December 2006, Meritage disputed the payments, saying he failed to comply with the non-compete portion of his termination agreement. The company initiated an arbitration proceeding against Landon in February 2007. (Reporting by Ilaina Jonas; Editing by Tim Dobbyn)