Exhibit 10.31
(KB HOME LOGO) [v50128v5012804.gif]
KB HOME
NON-EMPLOYEE DIRECTORS STOCK PLAN
(amended and restated effective January 1, 2009)
     1. PURPOSE OF THE PLAN. The purpose of KB Home Non-Employee Directors Stock
Plan (“Plan”) is to grant Awards of Stock Units and/or Options to non-employee
Directors of KB Home (the “Company”) in order to align their compensation with
the equity interests of the Company’s stockholders. The Plan provides for
compensation through (i) annual grants of Stock Units to Directors and Committee
Chairs, (ii) the payment of Directors’ Annual Retainer and Meeting Fees in cash
or Stock Units, and (iii) the ability under certain conditions for Directors to
elect to receive any or all of the foregoing in the form of Options. The Plan
was adopted effective as of September 26, 1996 (the “Effective Date”), was
subsequently amended as of December 4, 1998, December 6, 1999, and July 10,
2003. and is hereby amended and restated effective January 1, 2009 (the
“Amendment Date”).
     2. DEFINITIONS.
     “AMENDMENT DATE” shall mean January 1, 2009.
     “ANNUAL MEETING” shall mean an annual meeting of stockholders of the
Company.
     “ANNUAL RETAINER” shall mean the retainer fee, established by the Board,
paid to a Director for service as a Director on the Board for a Director Year.
     “ANNUAL STOCK UNIT AWARD” shall mean the annual Award of Stock Units,
established by the Board, paid to a Director at the beginning of a Director Year
in consideration for such Director’s agreement to serve as a Director on the
Board for the Director Year.
     “AWARD” shall mean an award of Stock Units or Options pursuant to the Plan.
     “BOARD” shall mean the Board of Directors of the Company.
     “CHANGE IN CONTROL” of the Company shall mean the occurrence of a “change
in the ownership,” a “change in the effective control,” or a “change in the
ownership of a substantial portion of the assets” of the Company (or of such
other corporation described in Section 1.409A-3(i)(5)(ii)(A)), as determined in
accordance with Section 1.409A-1(i)(5) of the Treasury Regulations and the
following provisions:
     (a) A “change in the ownership” of the Company (or other applicable
corporation) shall occur on the date on which any one person, or more than one
person acting as a group, acquires ownership of stock of the corporation that,
together with stock held by such person or group,

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constitutes more than 50% of the total fair market value or total voting power
of the stock of such corporation. However, if any person or group is considered
to own more than 50% of the total fair market value or total voting power of the
stock of such corporation, and such person or group acquires additional stock of
such corporation, the acquisition of additional stock by such person or group
shall not be considered to cause a “change in the ownership” (or a “change in
the effective control”) of such corporation.
     (b) A “change in the effective control” of the Company (or other applicable
corporation) shall occur on either of the following dates: (i) The date on which
any one person, or more than one person acting as a group, acquires (or has
acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of the corporation
possessing 30% or more of the total voting power of the stock of such
corporation; provided, however, that if any person or group is considered to own
more than 30% of the total total voting power of the stock of such corporation,
and such person or group acquires additional stock of such corporation, the
acquisition of additional stock by such person or group shall not be considered
to cause a “change in the effective control” of such corporation; or (ii) The
date on which a majority of the Company’s Board of Directors is replaced during
any 12-month period by directors whose appointment or election is not endorsed
by a majority of the members of the Company’s Board of Directors before the date
of the appointment or election.
     (c) A “change in the ownership of a substantial portion of the assets” of
the Company (or other applicable corporation) shall occur on the date on which
any one person, or more than one person acting as a group, acquires (or has
acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) assets from the corporation that have a
total gross fair market value equal to or more than 40% of the total gross fair
market value of all of the assets of the corporation immediately before such
acquisition or acquisitions. However, a transfer of assets shall not be treated
as a “change in the ownership of a substantial portion of the assets” when such
a transfer is made to a related person as described in Section
1.409A-3(i)(5)(vii)(B) of the Treasury Regulations.
     “CODE” shall mean the Internal Revenue Code of 1986, as amended from time
to time. All references to the Code or any section thereof shall include the
Treasury Regulations and other Department of Treasury guidance issued
thereunder.
     “COMMITTEE” shall mean the Nominating and Corporate Governance Committee of
the Board or such other committee as may be designated by the Board.
     “COMMITTEE CHAIR RETAINER” shall mean the annual Award of Stock Units,
established by the Board, to be paid to a Director for service as Chairman of a
committee of the Board of Directors for a Director Year.
     “COMPANY” shall mean KB Home.
     “DIRECTOR” shall mean a non-employee director of the Company.
     “DIRECTOR YEAR” shall mean the fiscal year commencing on the date of the

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Company’s Annual Meeting and ending on the date immediately preceding the next
Annual Meeting.
     “DIVIDEND EQUIVALENT PAYMENTS” shall mean the payment described in
Section 7 hereof, to a holder of Stock Units with respect to certain dividends
paid on outstanding shares of Stock.
     “EFFECTIVE DATE” shall mean September 26, 1996.
     “FAIR MARKET VALUE” of the Stock on a particular date shall equal (a) if
Shares are traded on a securities exchange, the closing price of a Share as
reported in the Wall Street Journal for such date or, if no sale occurred on
such date, for the first trading date immediately prior to such date during
which a sale occurred; or (b) if Shares are not traded on a securities exchange,
(i) the last sales price on such date (if Shares are then listed as a Global
Market Issue under the NASDAQ Global Market System) or (ii) the mean between the
closing representative bid and asked prices (in all other cases) for Shares on
such date; or, if no sales prices or bid and asked prices, as applicable, are
reported by a national quotation system, the first date immediately prior to
such date on which sales prices or bid and asked prices, as applicable, are
reported by a national quotation system; or (c) if Shares are not publicly
traded, or with respect to any non-Share based Award or settlement of an Award,
the fair market value established by the Committee acting in good faith.
     “OPTION” shall mean a right to purchase a number of shares of Stock at such
exercise price, at such times, and on such other terms and conditions as are
specified herein or pursuant to such other documentation as may evidence the
Award. Options granted under this Plan are not intended to satisfy the
requirements for treatment as Incentive Stock Options as defined under
Section 422 of the Internal Revenue Code of 1986, as amended.
     “PER DIEM FEES” shall mean a fee, established by the Board, authorized by
the Chief Executive Officer of the Company, in his or her sole discretion, to a
Director who is asked to work on Board issues for a significant part of the day
outside of normal Board or committee meetings.
     “RATIO” shall mean such ratio of the grant-date value of an Option to the
Fair Market Value of the Stock underlying the Option as may be determined by the
Committee from time to time for the purposes to calculating the number of
Options to be granted to a Director, provided that any adjustment in such ratio
shall be subject to the approval of the Board.
     “RULE 16B-3” shall mean Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended.
     “SECTION 409A” shall mean Section 409A of the Code and, for the avoidance
of doubt only, the Treasury Regulations and other Department of Treasury
guidance issued thereunder.
     “STOCK” shall mean shares of Common Stock, par value $1.00 per share, of
the Company.

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     “STOCK UNIT” shall mean a right to (i) receive a share of Stock or
(ii) receive a cash payment, in accordance with the conditions set forth herein,
of the Fair Market Value of a share of Stock.
     “TERMINATION DATE” shall mean the date a Director’s service on the Board
terminates for any reason, provided that such termination constitutes a
“separation from service” within the meaning of Section 409A as determined in
accordance with Section 10(c) hereof.
     3. SOURCE OF SHARES DELIVERED UNDER AWARDS. Any Stock delivered pursuant to
an Award shall consist of shares of stock acquired by the Company on the open
market.
     4. ANNUAL RETAINER AND STOCK UNIT AWARDS.
     (a) The Committee shall from time to time establish the dollar amount of
the Annual Retainer for a Director Year, the number of shares of Stock subject
to the Annual Stock Unit Award and Committee Chair Retainers for a Director
Year, and the applicable Ratio for Options granted during a Director Year,
provided that any adjustment in such amounts or numbers shall be subject to the
approval of the Board.
     (b) On the date of each Annual Meeting, each incumbent Director or who has
been elected as of the date of such Annual Meeting shall receive an Annual Stock
Unit Award of 4,000 Stock Units, which amount shall be subject to adjustment in
future Director Years as contemplated in Section 4(a) hereof. If an individual
is first elected as Director during a Director Year, he or she shall receive a
prorated Annual Stock Unit Award for the remaining balance of the Director Year.
     (c) On the date of each Annual Meeting, the then-incumbent Chairman of the
Audit and Compliance Committee shall receive a Committee Chair Retainer of 1000
Stock Units; Chairmen of other Committees of the Board shall receive a retainer
of 600 Stock Units. Committee Chair Retainers shall be subject to adjustment in
future Director Years as contemplated in Section 4(a) hereof. If a Director is
elected as the Chairman of a Committee during a Director Year, he or she shall
receive a prorated Committee Chair Retainer for the remaining balance of the
Director Year.
     5. ANNUAL RETAINER. Each Director shall be entitled to receive an Annual
Retainer with respect to each Director Year in accordance with the provisions of
this Section 5. Each Director shall be given an opportunity by the Company on an
annual basis to elect (“Annual Election”) to receive his or her Annual Retainer:
(i) in cash, (ii) in Stock Units, or (iii) in Options. A Director who does not
make an Annual Election shall receive his or her Annual Retainer in cash.
     (a) The Annual Election for the Annual Retainer with respect to any
Director Year (or for the Committee Chair Retainer or Annual Stock Unit Award
with respect to any Director Year, pursuant to Section 6 hereof) must be in
writing and shall be delivered to the Secretary of the

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Company no later than the last day of the Director’s taxable year ending prior
to the Director Year, subject to Section 5(c). (The Annual Election shall be
irrevocable after the last day of the Director’s taxable year ending prior to
the Director Year, subject to Section 5(c).) The Annual Election shall specify
the Annual Retainer that such Director elects to receive in cash, or Stock
Units, or Options (or the Committee Chair Retainer or Annual Stock Unit Award
that such Director elects to receive in Options). If such Director elects to
receive Stock Units or Options, such Annual Election shall specify whether such
Stock Units or Options shall be settled in cash or shares. If the Director does
not specify whether such Stock Units or Options shall be settled in cash or
shares, settlement shall be made in cash.
     (b) If a Director elects to receive his or her Annual Retainer in cash,
payment shall be made on a quarterly basis. If a Director elects to receive
Stock Units in lieu of the Annual Retainer, the Director shall receive Stock
Units (including fractional Stock Units) with respect to Stock having a Fair
Market Value (on the date of the Company’s Annual Meeting) equal to 120% of the
Annual Retainer.
     (c) Any person who becomes a Director on or after the date of an Annual
Meeting, whether by appointment or election as a Director (or by change in
status from a full-time employee), shall receive an Annual Retainer prorated for
the balance of that Director Year. Notwithstanding the provisions of
Section 5(a), such Director’s Annual Election for the Director Year in which he
or she first becomes a Director may be delivered to the Secretary of the Company
no later than the date on which such person first becomes a Director, and such
Annual Election shall be irrevocable after the date on which such person first
becomes a Director. In the event a Director voluntarily resigns from the Board
during a Director Year, (i) the Director shall return to the Company any cash
payment covering the prorated portion of the Annual Retainer for the balance of
that Director Year and (ii) the Director shall forfeit a percentage of any Stock
Units or Options awarded (or if an Option has been exercised, the Director shall
return to the Company a cash amount equal to the taxable amount realized by the
Director on the date of the Option exercise) prorated for the balance of the
portion of the Director Year (if any) as to which such Stock Units or Options
were awarded. No return of any portion of the Annual Retainer, Stock Unit or
Option grant shall be required in the event a Director leaves the Board as the
result of retirement, incapacity or death.
     6. OPTION AWARDS IN LIEU OF FEES OR STOCK UNITS.
     (a) Any Director may elect, by means of an Annual Election in accordance
with Section 5 hereof, to receive an Award of Options in lieu of the Annual
Retainer, Committee Chair Retainer, and/or Annual Stock Unit Award that such
Director otherwise would be entitled to receive. Options shall be granted as of
the date of the Company’s Annual Meeting at the commencement of the Director
Year for which the Award is being made.
     (b) The number of shares of Stock subject to an Option granted in lieu of
the Annual Retainer shall equal the number of shares, rounded up to the nearest
whole number, obtained by dividing (i) the dollar amount of the Annual Retainer
by (ii) the product of the Ratio and the Fair Market Value of a share of Stock
on the date of the Award. The number of shares of Stock subject to an Option
granted in lieu of the Annual Stock Unit Award and/or the Committee Chair

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Retainer shall equal the number of shares, rounded up to the nearest whole
number, obtained by dividing (i) the Fair Market Value of the number of shares
of Stock subject to the Annual Stock Unit Award and/or the Committee Chair
Retainer, by (ii) the product of the Ratio and the Fair Market Value of a share
of Stock on the date of the Award.
     (c) The price at which each share of Stock may be purchased upon exercise
of a particular Option shall be the Fair Market Value of the Stock on the date
of the Annual Meeting at which the Option is granted. The exercise period of any
Option previously awarded under the Plan may not be adjusted downward, whether
through amendment, cancellation or replacement grants, or by any other means,
except as provided in Section 12 hereof. The Committee shall not extend the
exercise price of an Option beyond the earlier of the latest date upon which the
Option could have expired by its original terms under any circumstances or the
tenth anniversary of the date of grant of such Option, or otherwise modify any
Option or add any feature for the deferral of compensation in any manner that
would cause a violation of the requirements of Section 409A.
     (d) Each Option shall be vested on the date of grant, but cannot be
exercised unless and until the earlier of: (i) the Director’s acquisition and
continued beneficial ownership of at least 10,000 shares of Stock or Stock Units
or (ii) the Director’s Termination Date. Options shall have a maximum term of
15 years from the date of grant. Except as provided in Section 5(c) herein,
Options shall remain outstanding and fully exercisable for one (1) year from the
Termination Date, except in the event of removal for cause, in which case
Options shall remain outstanding and fully exercisable for 30 days.
     (e) No Stock shall be delivered pursuant to any exercise of an Option until
the Director has made payment in full of the Option price therefor or provision
for such payment satisfactory to the Committee. The exercise price of an Option
may be paid in cash or certified or cashiers’ check or by delivery (either
actually or by attestation) of shares of Stock that have been acquired or held
by the Director in such manner as to not result in an accounting charge.
     (f) Unless the documents evidencing the grant of an Option (or an amendment
thereto authorized by the Committee) expressly states that the Option is
transferable, no Option granted under the Plan may be sold, assigned, conveyed,
gifted, pledged, hypothecated or otherwise transferred in any manner, other than
by will or the laws of descent and distribution.
     7. DIVIDEND EQUIVALENT PAYMENTS. Effective as of each dividend payment date
for outstanding shares of Stock, a current cash payment shall be made on each
outstanding Stock Unit to the holder thereof in an amount equal to dividend paid
on an outstanding share of Stock.
     8. STOCK UNITS. Each Stock Unit Award under this Plan shall be evidenced by
an Award Agreement that complies with, or is exempt from, the requirements of
Section 409A. Unless otherwise provided herein, all payments in respect of a
Director’s Stock Units shall be made as soon as practicable after (but in no
event later than 60 days following) the earlier of: (i) the occurrence of a
Change in Control and (ii) the Termination Date.
     9. FORM OF PAYMENT. Payment in respect of Stock Units and/or Options shall
be made in Stock or in cash, in accord with the previous annual elections made
by the Director. The

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Company shall not issue fractions of a share. Whenever under the terms of the
Plan a fractional share would otherwise be required to be issued, the Director
shall be paid in cash for such fractional share.
     10. SECTION 409A.
     (a) To the extent that the Committee determines that any Award granted
under the Plan is subject to Section 409A, the Award Agreement evidencing such
Award shall comply with the requirements of Section 409A. To the extent
possible, the Plan and Award Agreements shall be interpreted in accordance with
Section 409A, including without limitation any Treasury Regulations or other
Department of Treasury guidance that may be issued or amended after the
Effective Date or the Amendment Date. Notwithstanding any provision of the Plan
to the contrary, in the event that following the Effective Date the Committee
determines that any Award may be subject to Section 409A, including such
Department of Treasury guidance as may be issued after the Effective Date or the
Amendment Date, the Committee may adopt such amendments to the Plan and the
applicable Award Agreement or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effect), or take any other
actions, that the Committee determines are necessary or appropriate to
(i) exempt the Award from Section 409A and/or preserve the intended tax
treatment of the benefits provided with respect to the Award, or (ii) comply
with the requirements of Section 409A.
     (b) If, on a Director’s Termination Date, (i) such Director is a “specified
employee” of the Company (within the meaning of Section 409A as determined
annually by the Committee in accordance with the methodology specified by
resolution of the Board or the Committee and in accordance with
Section 1.409A-1(i) of the Treasury Regulations) and (ii) the Company shall make
a good-faith determination that an amount payable pursuant to an Award
constitutes “deferred compensation” (within the meaning of Section 409A) the
payment of which is required to be delayed pursuant to the six-month delay rule
set forth in Section 409A in order to preserve the tax treatment intended for
such payment or to avoid additional tax, interest, or penalties under
Section 409A, then the Company shall not pay such amount on the otherwise
scheduled payment date but shall instead pay it on the first business day after
such six-month period. Such amount shall be paid without interest, unless
otherwise determined by the Committee, in its sole discretion, or as otherwise
provided in any applicable agreement between the Company and the relevant
Director.
     (c) For purposes of this Plan, a “separation from service” within the
meaning of Section 409A shall mean termination of services provided by a
Director to the Company, whether voluntary or involuntary, as determined by the
Committee in accordance with Section 1.409A-1(h) of the Treasury Regulations. In
determining whether a Director has experienced a separation from service, the
following provisions shall apply:
          (i) If a Director provides services for the Company as both an
employee and as a director of the Board of the Company, to the extent permitted
by Section 1.409A-1(h)(5) of the Treasury Regulations, the services provided by
such Director as an employee shall not be taken into account in determining
whether the Director has experienced a separation from service as a director of
the Board of the Company, and the services provided by such Director as a
director of the Board of the Company shall not be taken into account in
determining whether the Director

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has experienced a separation from service as an employee.
          (ii) For purposes of this Subsection, services performed for the
Company shall include service performed both for the Company and for any other
corporation that is a member of the same “controlled group” of corporations as
the Company under Section 414(b) of the Code or any other trade or business
(such as a partnership) that is under common control with the Company as
determined under Section 414(c) of the Code, in each case as modified by
Treasury Regulation Section 1.409A-1(h)(3) and substituting “at least
50 percent” for “at least 80 percent” each place it appears in Section 1563(a)
of the Code or Treasury Regulation Section 1.414(c)-2.
     (d) A Director shall be solely responsible and liable for the satisfaction
of all taxes, interest, and penalties that may be imposed on such Director or
for such Director’s account in connection with an 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
Director harmless from any or all of such taxes, interest, or penalties.
     11. STATEMENT OF ACCOUNT. Each Director shall receive an annual statement
showing the number of Stock Units and/or Options that have been awarded to the
Director under the Plan.
     12. CHANGE IN CAPITAL STRUCTURE. In the event of any change in the Stock by
reason of any stock dividend, split, combination of shares, exchange of shares
warrants or rights offering to purchase Stock at a price below its fair market
value, reclassification, recapitalization, merger, consolidation or other change
in capitalization, appropriate adjustment shall be made by the Committee in the
number and kind of shares subject to the Plan, the exercise price of any
outstanding Options under the Plan, and any other relevant provisions of the
Plan or any outstanding Awards, whose determination shall be binding and
conclusive on all persons; provided, however, that such adjustment shall be made
only to the extent that it does not cause a violation of the requirements of
Section 409A.
     13. NONTRANSFERABILITY. Stock Units shall not be transferable and may not
be alienated by a Director except by will or the laws of descent and
distribution.
     14. RIGHTS. Except to the extent otherwise set forth herein, Directors
shall not have any of the rights of a stockholder with respect to the Stock
Units.
     15. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Committee. The Committee shall have full power, discretion and authority to
interpret and administer the Plan, except that the Committee shall have no power
to (i) determine the eligibility for Awards or the number of Stock Units or
timing or value of Awards to be granted to any Director, or (ii) take any action
specifically delegated to the Board under the plan. With respect to any
determination contemplated in subsection (i) of the preceding sentence, the
Committee shall make recommendations to the Board, but any final determination
with respect to such recommendation shall be subject to the approval of the full
Board.
     16. AMENDMENT OR TERMINATION OF THE PLAN. The Board may, at any time, amend
or terminate the plan; but no amendment or termination shall, without the
written consent

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of a Director, reduce the Director’s rights under previously granted Awards or
with respect to any Fees previously earned. No amendment which requires
stockholder approval in order for the Plan to continue to comply with Rule 16b-3
shall be effective unless the same shall be approved by the requisite vote of
the stockholders of the Company.
     17. NO RIGHT TO RENOMINATION. Nothing in the plan or in any Award shall
confer upon any Director the right to be nominated for reelection to the Board.
     18. PAYMENTS UPON DEATH. In the event of a Director’s death, payments with
respect to any Stock Units shall be made in a single lump sum payment to the
beneficiary designated by the Director, and the right to exercise any Options
shall be accorded to such beneficiary, or in the absence of an executed
beneficiary form, to the person legally entitled thereto, as designated under
his or her will, or to such heirs as determined under the laws of intestacy for
the state of his or her domicile.
     19. GOVERNING LAW. The Plan and all actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of
California.

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