EXHIBIT 10.43
KB HOME
FISCAL YEAR 2009 PHANTOM SHARES AGREEMENT
     This Phantom Shares Agreement (this “Agreement”) is made on October 2, 2008
(the “Grant Date”) between KB Home, a Delaware corporation (the “Company”), and
[NAME] (the “Employee”).
     WHEREAS, the Company desires to grant the Employee Phantom Shares (the
“Award”);
     WHEREAS, the Award is a cash-based award designed to promote the interests
of the Company and its stockholders by retaining exceptional employees;
     WHEREAS, the Award 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”), together with the Department of Treasury Regulations and other
interpretative guidance issued thereunder (“Section 409A”); and
     WHEREAS, the Award granted hereunder is not being issued pursuant to any
the Amended and Restated KB Home 1999 Incentive Plan, as amended on October 2,
2008 (the “Plan”), or pursuant to any other existing 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 an Award 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 (“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 Award 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.
     2. Rights Vesting.

  (a)   Normal Rights Vesting. The Rights granted under this Agreement will vest
on October 3, 2011 only 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 granted under this Agreement will vest upon a Change of
Ownership (as such term is defined in the Plan) of the Company.

     3. Forfeiture. Subject to Section 2, 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.
     4. Payment.

  (a)   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

 

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      of (i) the fifteenth day of the third month following the end of 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 (A) the Fair Market
Value (as defined below) of one Share of Common Stock as of the Vesting Date,
plus (B) the cumulative value of all cash dividends paid in respect of a Share
of Common Stock from the Grant Date through and including the Vesting Date.    
(b)   For purposes of this Agreement, “Fair Market Value” shall have the meaning
given that term in the Plan.     (c)   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 Award.

     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. Adjustments. In the event of any of the transactions described in
Section 13(a) of the Plan, the Management Development and Compensation Committee
(the “Committee”) of the Company shall adjust or revise the Award in the same
manner as it then adjusts any similar awards under the Plan; provided that such
an adjustment of the Award shall be made only to the extent that such adjustment
will not cause a violation of Section 409A.
     7. California Law. This Agreement will be construed, administered and
enforced in accordance with the laws of the State of California.
     8. Entire Agreement.

  (a)   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.     (b)   Subject to applicable law, this
Agreement, the Award and the Rights shall be administered by the Committee, and
the Committee shall have full power and authority to determine and interpret the
terms and conditions of this Agreement, the Award, and the Rights, and make any
determination and take any other action that the Committee deems necessary or
desirable for the administration of this Agreement, the Award, and the Rights,
based in each case on such considerations as the Committee in its sole
discretion determines.     (c)   All designations, determinations,
interpretations, and other decisions under or with respect to this Agreement,
the Award and the Rights shall be within the sole discretion of the Committee,
may be made at any time and shall be final, conclusive, and binding upon all
Persons (as defined below), including, but not limited to, the Company, any
Subsidiary, the Employee, any stockholder and any employee of the Company or any
Subsidiary. THE EMPLOYEE ACKNOWLEDGES AND AGREES THAT THE COMMITTEE SHALL
ADMINISTER THIS AGREEMENT AND THE AWARD, AND THAT THE EMPLOYEE IS BOUND BY, AND
THE AWARD AND RIGHTS ARE SUBJECT TO, ANY TERMS, RULES OR DETERMINATIONS MADE BY
THE COMMITTEE.

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     9. Non-Transferability. None of this Agreement, the Award or the Rights may
be assigned by the Employee by operation of law or otherwise. Any purported
assignment by the Employee shall be null and void. This Agreement shall,
however, be binding upon the successors and assigns of the Company.
     10. No Obligation. Neither the execution and delivery hereof nor the
granting of the Award or the Rights will constitute or be evidence of any
agreement or understanding, express or implied, on the part of the Company or
any Subsidiary to employ or continue the employment of the Employee for any
period or in any capacity.
     11. Notice. Any notice given hereunder to the Company will be addressed to
the Company, attention: Senior Vice President, Human Resources, or a designee or
successor 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.
     12. Amendment and Cancellation. Subject to Section 14 hereof, at any time
and from time to time, the Committee may terminate, amend or modify this
Agreement. Except with respect to amendments made pursuant to Section 14 hereof,
no termination, amendment, or modification of this Agreement will adversely
affect in any material way the Award or the Rights granted hereunder without the
prior written consent of the Employee.
     13. 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 as to the
Employee or the Award, or would disqualify the Award or the Rights under any law
deemed applicable by the Committee, such provision will be construed or deemed
amended to conform to the applicable laws, or if it cannot be construed or
deemed amended without, in the determination of the Committee, 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 Award 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 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 (each, a “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.

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     14. Section 409A.

  (a)   The Award 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. This Agreement shall be interpreted in accordance with
Section 409A, to the extent applicable, including without limitation any
Treasury Regulations or other Department of Treasury guidance that may be issued
or amended after the date hereof. In the event that, following the date hereof,
the Committee determines that the Award may be subject to Section 409A,
including such Department of Treasury guidance as may be issued after the date
hereof, the Committee 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 Committee determines are necessary or appropriate to (i) exempt the Award
and Rights from Section 409A and/or preserve the intended tax treatment of the
benefits provided with respect to the Award and Rights, or (ii) comply with the
requirements of Section 409A.     (b)   An Employee shall be solely responsible
and liable for the satisfaction of all taxes, interest, and penalties that may
be imposed on such Employee or for such Employee’s account in connection with
the Award (including any taxes, interest, and penalties under Section 409A), and
neither the Company nor its affiliates shall have any obligation to indemnify or
otherwise hold such Employee harmless from any or all of such taxes, interest,
or penalties.

     15. Rescission. This Agreement, the Award and the Rights will be subject to
rescission by the Company if an original of this Agreement executed by the
Employee is not received by the Company within four weeks of the Grant Date.
     16. Term. Upon forfeiture of all of the Employee’s rights, title, and
interests in and to any and all of the Rights pursuant to Section 3 above, this
Agreement shall terminate and be of no further force or effect.
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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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