Exhibit 10.37
KB HOME
PHANTOM SHARE BONUS AGREEMENT FOR NON-SENIOR MANAGEMENT
     This Phantom Share Bonus Agreement for Non-Senior Management (this
“Agreement”) is made on July 12, 2007 (the “Grant Date”) between KB Home, a
Delaware corporation (the “Company”), and [NAME] (the “Employee”).
     WHEREAS, the Company desires to grant the Employee a Phantom Shares Bonus
(the “Bonus”);
     WHEREAS, the Bonus is a cash-based award designed to promote the interests
of the Company and its stockholders by retaining exceptional employees;
     WHEREAS, the Bonus is intended to constitute compensation that is payable
within the “short-term deferral” period after the Rights (as defined below) are
no longer subject to a “substantial risk of forfeiture” and that does not
provide for the deferral of compensation under, and is therefore exempt from,
Section 409A of the Internal Revenue Code of 1986, as amended from time to time
(the “Code”); and
     WHEREAS, the Bonus and Rights granted hereunder are not being issued
pursuant to any stock plan, including the KB Home Amended and Restated 1999
Incentive Plan (the “Plan”).
     NOW, THEREFORE, in consideration of the foregoing, the Company and the
Employee enter into this Agreement as follows:
A G R E E M E N T
     1. Grant. Subject to the terms of this Agreement, the Company hereby grants
to the Employee a Bonus calculated by reference to an aggregate of [# RIGHTS]
phantom share rights (the “Rights”). Each Right, when fully vested hereunder,
will represent the economic equivalent of ownership of one share of common
stock, $1.00 par value per share, of the Company (“Common Stock”); provided that
the Rights will not entitle the Employee to, and the Employee will not have any
rights in, or own any, shares of Common Stock. The Bonus is intended to
constitute compensation that is payable within the “short-term deferral” period
after the Rights are no longer subject to a “substantial risk of forfeiture”
under Section 409A of the Code.
     2. Rights Vesting.

  (a)   Normal Rights Vesting. 100% of the Rights granted under this Agreement
will vest on July 12, 2010 if the Employee is employed by the Company or any
“subsidiary corporation” as defined in Section 424(f) of the Code and any
applicable regulations promulgated thereunder or any other entity of which a
majority of the outstanding voting stock or voting power is beneficially owned
directly or indirectly by the Company (each, a “Subsidiary”) on such date.    
(b)   Change of Ownership. Notwithstanding the foregoing and subject to
Section 3, the Rights will vest as to 100% of the Rights granted under this
Agreement upon a Change of Ownership of the Company. For purposes of this
Agreement, “Change of Ownership” shall have the meaning given that term in the
Plan.

     3. Forfeiture. Subject to Section 2(a), the Employee will immediately
forfeit all rights, title and interests in and to any and all Rights that have
not vested on the date the Employee’s employment with the Company or its
Subsidiaries is terminated.

 

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     4. Payment. As soon as reasonably practicable following the date of vesting
of the Rights in accordance with Section 2 above (the “Vesting Date”), but in no
event later than the later of (i) the fifteenth day of the third month following
the Employee’s first taxable year in which the Vesting Date occurs or (ii) the
fifteenth day of the third month following the end of the Company’s first
taxable year in which the Vesting Date occurs, the Company will pay to the
Employee for each vested Right an amount in cash equal to the Fair Market Value
of one share of Common Stock as of the Vesting Date. For purposes of this
Agreement, “Fair Market Value” shall have the meaning given that term in the
Plan. The Company has the authority to deduct or withhold an amount sufficient
to satisfy applicable federal, state, local and foreign taxes (including the
Employee’s FICA obligation) required by law to be withheld with respect to any
taxable event arising from the vesting of any Rights or payment of any portion
of the Bonus.
     5. No Stockholder Rights. The Employee will not be deemed to be a holder of
or possess any stockholder rights with respect to any shares of Common Stock in
connection with the Rights granted hereunder.
     6. Dividends. Cash dividends or other distributions paid in respect of
shares of Common Stock will be equally and contemporaneously credited to the
Employee’s account in the Company’s books and records in respect of the Rights,
and will be paid to the Employee in accordance with the same terms and
conditions of Section 4 above that apply to the payment of the Bonus.
     7. Adjustments. In the event of any of the transactions described in
Section 13(a) of the Plan, the Management Development and Compensation Committee
(the “MDCC”) of the Company shall be permitted to adjust or revise the Awards in
the same manner as it then adjusts any similar awards under the Plan.
     8. California Law. This Agreement will be construed, administered and
enforced in accordance with the laws of the State of California. This Agreement,
the Bonus and the Rights will be subject to rescission by the Company if an
executed original of this Agreement is not received by the Company within four
weeks of the Grant Date.
     9. Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the parties with respect to the subject matter of this
Agreement, and supersedes all prior and contemporaneous oral and written
agreements and understandings relating to such subject matter.
     10. Non-Transferability. Neither this Agreement nor the Bonus or Rights may
be assigned by Employee by operation of law or otherwise. Any purported
assignment by Employee shall by null and void. This Agreement shall, however, be
binding upon the successors and assigns of the Company.
     11. No Obligation. Neither the execution and delivery hereof nor the
granting of the Bonus or the Rights will constitute or be evidence of any
agreement or understanding, express or implied, on the part of the Company or
any of its Subsidiaries to employ or continue the employment of the Employee for
any period or in any capacity.
     12. Notice. Any notice given hereunder to the Company will be addressed to
the Company, attention Senior Vice President, Human Resources, or a designee
thereof, and any notice given hereunder to the Employee will be addressed to the
Employee at his or her address as shown on the records of the Company.
     13. Amendment and Cancellation. Subject to Sections 7 and 15 hereof, at any
time and from time to time, the MDCC may terminate, amend or modify this
Agreement. Except with respect to

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amendments made pursuant to Section 7 or 15 hereof, no termination, amendment,
or modification of this Agreement will adversely affect in any material way the
Bonus or the Rights granted hereunder without the prior written consent of the
Employee.
     14. General Provisions.

  (a)   Severability. If any provision of this Agreement is or becomes or is
deemed to be invalid, illegal, or unenforceable in any jurisdiction, or would
disqualify the Bonus or the Rights under any law deemed applicable by the MDCC,
such provision will be construed or deemed amended to conform the applicable
laws, or if it cannot be construed or deemed amended without, in the
determination of the MDCC, materially altering the intent of this Agreement,
such provision will be stricken as to such jurisdiction, and the remainder of
this Agreement will remain in full force and effect.     (b)   Other Laws. The
obligation of the Company to make payment of the Bonus will be subject to all
applicable laws, rules, and regulations, and to such approvals by government
agencies as may be required. The Company may refuse to transfer any
consideration under this Agreement if, acting in its sole discretion, it
determines that the issuance or transfer of such consideration might violate any
applicable law or regulation or entitle the Company to recover the same under
Section 16(b) of the Exchange Act.     (c)   No Trust or Fund Created. This
Agreement is intended to be an “unfunded” plan for incentive compensation. This
Agreement will neither create nor be construed to create a trust or separate
fund of any kind or a fiduciary relationship between the Company or any
Subsidiary or any affiliate and the Employee or any other individual,
corporation, partnership, association, joint-stock company, trust,
unincorporated organization, government or political subdivision thereof or
other entity (any “Person”). To the extent that any Person acquires a right to
receive payments from the Company or any Subsidiary pursuant to this Agreement,
such right will be no greater than the right of any unsecured general creditor
of the Company or any Subsidiary.     (d)   Headings. Headings are given to the
Sections and subsections of this Agreement solely as a convenience to facilitate
reference. Such headings will not be deemed in any way material or relevant to
the construction or interpretation of this Agreement or any provision thereof
and, in the event of any conflict, the text of this Agreement, rather than such
titles or headings, will control.

     15. Section 409A. The Bonus and the Rights thereunder are intended to
constitute compensation that is payable within the “short-term deferral” period
after the Rights are no longer subject to a “substantial risk of forfeiture” and
that does not constitute “nonqualified deferred compensation” within the meaning
of Section 409A of the Code. However, if at any time the MDCC determines that
the Bonus or the Rights may be subject to Section 409A, the MDCC may, in its
discretion, adopt such amendments to this Agreement or adopt such other policies
and procedures (including amendments, policies and procedures with retroactive
effect), or take any other actions, as the MDCC determines are necessary or
appropriate either for the Bonus and the Rights to be exempt from the
application of Section 409A of the Code or to comply with the requirements of
Section 409A of the Code, including by adding conditions with respect to the
vesting of the Rights and/or the payment of the Bonus.

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     IN WITNESS WHEREOF, the Company and the Employee have duly executed and
delivered this Agreement as of the date first above written.

            KB HOME

      By:   Jeffrey T. Mezger         Chief Executive Officer and President     
          EMPLOYEE:
              [NAME]           

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