EXHIBIT 10.43

 

DESCRIPTION OF 2006 CASH BONUS PLAN

 

On February 23, 2006, the Compensation Committee of the Board of Directors
approved the 2006 Cash Bonus Plan (the “2006 Plan”) for all of its full-time,
salaried employees, including the Chief Executive Officer (“CEO”), Chief
Operating Officer (“COO”), Executive Vice President (“EVP”) and Chief Financial
Officer (“CFO”). Under the terms of the 2006 Plan, the CEO and COO are eligible
to receive bonuses of three percent of the Company’s pre-tax, pre-bonus income,
the EVP is eligible to receive a bonus based on 3% of the Northern California
Regions pre-tax, pre-bonus income after corporate allocation and  3/4 of 1% of
the Company’s pre-tax, pre-bonus income (excluding the Northern California
Region) and the CFO is eligible to receive a bonus based on a specified
percentage of the Company’s pre-tax, pre-bonus income. Region presidents are
eligible to receive bonuses based upon specified percentages of their respective
region pre-tax, pre-bonus income after corporate allocation, the president of
the Company’s mortgage subsidiary is eligible to receive a bonus based upon the
mortgage subsidiary’s pre-tax, pre-bonus income if the mortgage subsidiary
achieves a targeted profit amount, a targeted mortgage capture rate (subject to
adjustment upward or downward if actual performance is above or below the
target) and a targeted customer service score (subject to adjustment upward or
downward if actual performance is above or below the target), and all other
participants are eligible to receive bonuses based upon specified percentages of
salary or specified percentages of a bonus pool determined as a specified
percentage of pre-tax, pre-bonus income.

 

An employee’s right to receive a bonus under the 2006 Plan is generally
conditioned upon his or her being actively employed by the Company or its
divisions or subsidiaries on the date of payment. Awards will be paid over two
years, with 75% paid following the determination of the bonus awards, and 25%
paid one year later, except for administrative staff bonuses and mortgage
subsidiary bonuses which will be paid in full. The amounts payable one year
later are conditioned upon continued employment to the date of payment, except
in the case of retirement, death or disability.

 

The maximum aggregate amount of awards under the 2006 Plan will not exceed 20%
of the Company’s consolidated pre-tax income before bonuses.

 

The Compensation Committee retains the discretion to increase the bonus of a
participant in the event of an extraordinary performance, or decrease it in the
case of a substandard performance, and may make this determination on the basis
of objective or subjective criteria, including, but not limited to, the pay
levels of executives at other major homebuilders.