EXHIBIT 10.54
(KB HOME LOGO) [v54027v5402701.gif]
September 1, 2009
Dear Ray:
I am pleased to extend the following offer for you to join KB Home.

     
Title/Position:
  Executive Vice President and Chief Financial Officer
 
   
Start Date:
  September 9, 2009
 
   
Base Salary:
  $600,000 per annum payable semi-monthly

Annual Incentive Compensation: For fiscal year 2009 (ending November 30, 2009),
you will be guaranteed a bonus of $200,000, the receipt of which is contingent
upon your continuous employment through the payment date (expected to be in
February 2010) and the Company’s ability to pay. For fiscal year 2010, you will
be eligible to participate in the Annual Incentive Plan for Executive Officers.
The current target opportunity for your position under the plan is 90% of annual
base salary. Receipt of any Incentive Award under the plan is contingent upon
the Company’s performance, your continuous employment through the payment date
(expected to be in February 2011) and the Company’s ability to pay.
Long-Term Incentive Compensation: I will recommend to the Management Development
and Compensation Committee (MDCC) of the Board of Directors in October 2009 that
you be eligible to participate in the Company’s long-term incentive compensation
program with an initial grant valued at 2X base salary ($1,200,000).
Relocation Expenses: KB Home will pay for all expenses associated with the move
of your household goods from Connecticut to California in accordance with the KB
Home relocation policy.
The Company will also pay for two trips to California for you and your spouse,
to look for housing. If you are unable to secure permanent housing, KB Home will
cover your temporary living expenses up to $5,000 per month (rent and utilities
only) for up to six (6) months if necessary.
In addition, the Company will reimburse you for one-time, non-recurring closing
costs and up to a 6% commission related to the sale of your current home if the
sale occurs within 24 months of your start date. Further, the Company will
reimburse one-time, non-recurring closing costs related to the purchase of a
home in the Los Angeles area. Homeowners’ insurance, property taxes and
homeowners’ association fees are excluded from this reimbursement, and our
reimbursement of any mortgage financing origination fee or “points” is capped at
the lesser of 1% or $35,000 Any expenses associated with relocation are taxable
and as such, these expenses will be grossed up and added to your earnings.
Receipts for closing costs and other reimbursable items should be summarized on
an expense report, approved by me and submitted to the Compensation division of
our Human Resources Department for processing.
This wholly constitutes the Company’s relocation commitment. In the event that
you should resign from the Company in less than one year or be terminated for
cause, you will be required to repay this sum to KB Home. Please contact Patty
Coley of King Relocation at (xxx) xxx-xxxx for information regarding our moving
company when you are ready to move.

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Executive Benefits Program: KB Home has designed a Health and Welfare plan that
allows you to choose the right insurance coverage for you and your family.
Please see the attached summary for more details. You are eligible for executive
benefits the first day of the month following your date of hire. You must enroll
in benefits prior to the last day of the month in which you are hired. If you do
not enroll within that timeframe, you must wait until open enrollment
(August 2010) or until you experience a qualifying life status change event
(e.g. marriage or birth of a child). You can enroll online at
kbhome.employee.com or by calling the Benefits Service Center at (xxx) xxx-xxxx.
We recommend that you continue your present insurance coverage until your KB
Home benefits are effective.
Health Care contributions qualify under current Internal Revenue Service rules
as a deduction from gross salaries before certain taxes are paid. In effect,
your contributions (employee and dependent) are made with pre-tax dollars.
Contributions are made through payroll deductions on a semi-monthly basis.
Complete information on Company benefits, enrollment instructions, etc. will be
included in your New Hire Tool Kit and sent to you upon acceptance of this
offer.
Executive Life Insurance: For so long as you are employed by KB Home, you will
receive $750,000 in coverage under the Company’s executive group term life
insurance policy. No application is necessary to affect this coverage.
DCP: KB Home offers its executives a Deferred Compensation Plan (DCP). The DCP
is a “nonqualified” plan (meaning that, under applicable tax rules, the DCP is
not funded like the 401(k) Plan and is subject to the claims of other creditors
in a bankruptcy) that affords executives an opportunity to defer more
compensation than is otherwise permitted under tax “qualified” plans like the
401(k) Plan. Under the current plan, you may elect to defer up to 75% of your
annual base salary and/or 75% of your annual bonus on a pre-tax basis. Eligible
participants may make elections for the following year’s salary and incentive
deferrals during the annual enrollment period typically held each November.
KB Home 401(k) Savings Plan: You are eligible to participate in KB Home’s 401(k)
Savings Plan, as outlined in the Summary Plan Description. Your participation in
the plan is effective the first of the month following your hire date. You may
contribute up to 25% of your eligible pay on a pretax basis, up to the annual
IRS dollar limits. You may also contribute between 1% and 15% of your after-tax
pay. You will be eligible to share in employer matching contributions if you
complete at least 1,000 hours of service during the Plan (calendar) year. The
Company will match 100% of each pretax dollar you contribute on the first 6% of
pay that you defer to your Plan, subject to federal limitations on employer
contributions. To enroll, please call Fidelity at 800-835-5098 or access their
website at www.401k.com.
Change in Control Policy: I will recommend to the MDCC that you be made a “Group
A” participant in the Company’s Change in Control Severance Plan.
Executive Severance Plan: After one year of employment, you will be eligible for
benefits under the Executive Severance Plan if your employment is terminated
involuntarily except for cause, death, disability or upon change in control (the
last of which is governed by the Change in Control Severance Plan), subject to
the execution of a release and the other terms of the plan.
The Company’s employee compensation and benefits programs are subject to future
changes at the discretion of Company management and/or the MDCC.

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Executive Commitment:

a.   During the performance of your duties on behalf of the Company, you will
receive and be entrusted with certain confidential and/or secret information of
a proprietary nature. You agree not to disclose or use, during your employment
or anytime thereafter, any such information, which is not otherwise publicly
available.   b.   You will not make any public statements concerning KB Home or
any of its affiliates or subsidiaries regarding your employment, unless
previously approved by the Company.   c.   You agree that in the event of your
termination, you will not for a period of one year thereafter employ nor seek to
employ (for yourself of on behalf of anyone else) any person employed by KB Home
or any of its affiliates or subsidiaries.   d.   You agree that during the term
of your employment you will not engage, as owner, part owner, stockholder (other
than passive), director or otherwise, of any company, joint venture or other
business competitive with KB Home or any of its affiliates or subsidiaries.
Nothing in this paragraph (d) shall prevent you from obtaining normal employment
(after the termination of your employment with the Company), in any general
industry or the housing industry as long as you comply with the provisions of
this letter.

Employment References: This offer of employment is extended to you contingent
upon satisfactory references and acceptable results of a criminal and civil
background check. By accepting the terms of this letter and signing below, you
agree to allow the Company to contact your references and conduct such a
background check.
No Violation of Former Employer’s Rights. In the performance of your duties on
behalf of the Company, you acknowledge and agree that you shall not, in
violation of any commitments you have made to any former employer or any other
person or entity, (a) retain or utilize any confidential and/or secret
information of a proprietary nature or (b) solicit individuals for employment
with the Company.
Employment at Will: Nothing in this letter shall be construed as an employment
contract obligating the Company (expressly or implicitly) to employ you for any
specified period of time. Either party has the right to terminate the employment
relationship at any time, with or without cause. No action or inaction by the
Company of any kind during your employment shall in any way detract from or
alter the right of either party to terminate the employment relationship, with
or without cause.
Limitation: The compensation described in the preceding paragraphs represents
our entire obligation to you during the term of your employment. KB Home shall
have no obligation to pay any compensation (in any form or any kind) to you in
excess of the above described compensation.
Employment Authorization Documentation: The Federal Immigration Reform and
Control Act of 1986 requires all employers to verify that employees hired after
November 6, 1986 have the legal right to work in the United States. Therefore,
your employment is subject to your ability to show proof that you are authorized
to work in the United States. We ask that on your first day you bring
documentation from the attached list in order to satisfy this requirement. You
will need to bring one item from List A OR one item from List B AND one item
from List C.
Entire Agreement: This letter together with the documents referenced herein
contains all of the agreements and understandings regarding your employment and
the obligations of KB Home in connection with employment. KB Home has not made,
nor are you relying upon any oral or written promises or statements made by KB
Home or any agent of KB Home except as expressly set forth herein. This letter
supersedes any and all prior agreements and understandings between you and KB
Home and alone expresses the agreement of the parties. This letter can only be
amended in writing by the President and CEO of KB Home. The terms of this
agreement will expire ten days following the date of this letter if not executed
by both parties.

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Governing Law: This letter will be governed by the laws of the State of
California, as an agreement entered into and to be performed in California by
residents of California.
Ray, I am very happy to extend this offer and hope you give it your full
consideration. We look forward to your acceptance, as we are sure you will make
outstanding contributions to the KB Home team.
Sincerely,

                /s/ Jeffrey T. Mezger       Jeffrey T. Mezger      President and
Chief Executive Officer       

Agreed to and Acknowledged by:

         
/s/ Raymond Silcock
     9/4/09            
Raymond Silcock
     Date    

Note: Please sign and date this offer letter and return it to:
KB Home
Attn: Tom Norton — SVP, Human Resources
10990 Wilshire Blvd., 7th Floor
Los Angeles, CA 90024
Or via fax:
(xxx) xxx-xxxx
Or scan and email to:
xxx@kbhome.com

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LISTS OF ACCEPTABLE DOCUMENTS
All documents must be unexpired

         
LIST A
       
Documents that Establish Both
  LIST B   LIST C
Identity and Employment
  Documents that Establish   Documents that Establish
Authorization
OR
Identity
AND
Employment Authorization

1.   U.S. Passport or U.S. Passport Card

2.   Permanent Resident Card or Alien Registration Receipt Card (Form I-551)

 
1.   Driver’s license or ID card issued by a State or outlying possession of the
United States provided it contains a photograph or information such as name,
date of birth, gender, height, eye color, and address

 
1.   Social Security Account Number card other than one that specifies on the
face that the issuance of the card does not authorize employment in the United
States
3.   Foreign passport that contains a temporary I-551 stamp or temporary I-551
printed notation on a machine- readable immigrant visa
 
2.   ID card issued by federal, state or local government agencies or entities,
provided it contains a photograph or information such as name, date of birth,
gender, height, eye color, and address

 
2.   Certification of Birth Abroad issued by the Department of State
(Form FS-545)
4.   Employment Authorization Document that contains a photograph (Form I-766)
 

3.   School ID card with a photograph

4.   Voter’s registration card

 
3.   Certification of Report of Birth issued by the Department of State
(Form DS-1350)
5.   In the case of a nonimmigrant alien authorized to work for a specific
employer incident to status, a foreign passport with Form I-94 or Form I-94A
bearing the same name as the passport and containing an endorsement of the
alien’s nonimmigrant status, as long as the period of endorsement has not yet
expired and the proposed employment is not in conflict with any restrictions or
limitations identified on the form
 

5.    U.S. Military card or draft record

6.    Military dependent’s ID card

7.   U.S. Coast Guard Merchant Mariner Card

8.   Native American tribal document

9.   Driver’s license issued by a Canadian government authority

 

4.   Original or certified copy of birth certificate issued by a State, county,
municipal authority, or territory of the United States bearing an official seal

5.   Native American tribal document

6.   U.S. Citizen ID Card (Form I-197)

6.   Passport from the Federated States of Micronesia (FSM) or the Republic of
the Marshall Islands (RMI) with Form I-94 or Form I-94A indicating nonimmigrant
admission under the Compact of Free Association Between the United States and
the FSM or RMI
 
 
For persons under age 18 who
are unable to present a
document listed above:

10.   School record or report card

11.   Clinic, doctor, or hospital record

12.   Day-care or nursery school record

 
7.   Identification Card for Use of Resident Citizen in the United States
(Form I-179)

   
8.   Employment authorization document issued by the Department of Homeland
Security

Illustrations of many of these documents appear in Part 8 of the Handbook for
Employers (M-274)
Form I-9 (Rev. 02/02/09) N Page 5

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