exv10w35



 





EXHIBIT 10.35




KAUFMAN AND BROAD, INC.




Executive Deferred Compensation Plan



This Executive Deferred Compensation Plan (hereinafter referred to as the “Plan”) has been adopted
by the Personnel, Compensation and Stock Option Committee of the Board of Directors of Kaufman and
Broad, Inc. (hereinafter referred to as the “Employer”), effective as of July 11, 1985.





	1.	 	Purpose






	 	 	The purpose of the Plan is to provide supplemental retirement income and death benefits for
certain Executives (hereinafter defined).






	2.	 	Definitions






	 	 	The following definitions, set forth in alphabetical order, are used throughout the Plan.
Whenever words or phrases have initial capital letters in the Plan, a special definition for
those words or phrases is set forth below.






	 	(a)	 	“Account” means the record maintained by the Committee
of each Participant’s Deferrals, Employer contributions, credited interest and distributions under the Plan.
	 
	 	(b)	 	“Anniversary Date” means the last day of each Plan Year.
	 
	 	(c)	 	“Beneficiary” means the person, persons or entity
designated in writing by the Participant on forms
provided by the Committee to receive distribution of
certain death benefits under the Plan in the event of
the Participant’s death. A Participant may change the
designated Beneficiary from time to time by filing a new
written designation with the Committee, and
such designation shall be effective upon receipt by the Committee. If a Participant
has not designated a Beneficiary, or if a designated Beneficiary is not living or in
existence at the time of a Participant’s death, any death benefits payable under the
Plan shall be paid to the Participant’s spouse, if then living, and if the
Participant’s spouse is not then living, to the Participant’s estate.
	 
	 	(d)	 	“Benefit Agreement” means a benefit agreement described
in Section 8(a) relating to a Total Deferral commitment beginning in a specific Plan Year.





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	 	(e)	 	“Board of Directors” means the Board of Directors of
Kaufman and Broad, Inc.
	 
	 	(f)	 	“Code” means the Internal Revenue Code of 1986, as
amended.
	 
	 	(g)	 	“Committee” means the Personnel, Compensation and Stock
Option Committee of the Board of Directors or any
successor thereof.
	 
	 	(h)	 	“Covered Bonus” means the annual cash bonus earned by the Participant in the current Plan
Year and payable in the following Plan Year.
	 
	 	(i)	 	“Covered Salary” means annual base salary, excluding any bonus or other form of remuneration.
	 
	 	(j)	 	“Deferral” means the portion of a Participant’s Covered Salary and/or Covered Bonus that has
been deferred in accordance with Section 3(d). Deferral amounts are retained by the Employer
as part of its general assets.
	 
	 	(k)	 	“Deferral Period” means the period beginning with the
effective date of a particular Benefit Agreement and ending on November 30, 1992.
	 
	 	(l)	 	“Disability” means “Total Disability.” Total Disability must last continuously at least six
months during the Participant’s lifetime. Total Disability of the Participant means his
inability, caused by disease or bodily injury, to do substantially all the material duties of
his regular job, except that:






	 	(i)	 	After such inability has continued for two years, a Participant is not totally
disabled if he can work for pay or profit at some other job for which he is reasonably
fitted by education, training or experience, and
	 
	 	(ii)	 	A Participant is not totally disabled at any time when he is working for pay or
profit.






	 	 	 	Total Disability excludes intentional self-inflicted injury, and war or any act incident to
war, or service in the armed forces or any auxiliary civilian force of any country at war.






	 	(m)	 	“Disability Plan” means the insured long-term disability plan maintained by the Employer
which covers the Participants in this Plan, or any successor disability plan.




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	 	(n)	 	“Early Retirement Date” means the first day of the month coinciding with or next following
the later of:






	 	(i)	 	Attainment of age 50; and
	 
	 	(ii)	 	Completion of all Total Deferral commitments under the Plan; and
	 
	 	(iii)	 	Completion of ten (10) years of continuous employment with the
Employer.






	 	(o)	 	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
	 
	 	(p)	 	“Executive” means a management or highly-compensated employee of the Employer or any of its
subsidiaries who has been specifically designated, by the Board of Directors or the Committee,
as eligible to participate in this Plan as either a Tier I or Tier II Executive.
	 
	 	(q)	 	“Minimum Annual Deferral” means the minimum amount of Deferral that a Participant may
make in any Plan Year under 
Section 3(d)(ii).
	 
	 	(r)	 	“Normal Retirement Date” means the first day of the month coinciding with or next
following the later of:






	 	(i)	 	Attainment of age 60, if the Executive was less than age 51 when he became a
Participant, or attainment of age 65 for all other Participants; and
	 
	 	(ii)	 	Completion of all Total Deferral commitments under the Plan.






	 	(s)	 	“Participant” means an Executive who has made a written election to participate in the Plan
in accordance with Section 3(a).
	 
	 	(t)	 	“Plan Interest Rate” means:






	 	(i)	 	For the period from February 1, 1986, to January 31, 1987, 15% per annum;
and
	 
	 	(ii)	 	For the period February 1, 1987 to November 30, 1987, the average of the Moody’s
AAA Seasoned Corporate Bond Yield (which yield is published in Section H.15(519) of the
Federal Reserve Statistical Release) for the 12 months ended November 30, 1986,
increased by 300 basis points; and




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	 	(iii)	 	For all Plan Years subsequent to that ended
November 30, 1987, the average of the Moody’s AAA Seasoned Corporate Bond
Yield (which yield is published in Section H.15(519) of the Federal Reserve
Statistical Release) for the 12 months preceding such Plan Year, increased
by 300 basis points.






	 	(u)	 	“Plan Year” means a fiscal year beginning December 1 of any year and ending
November 30 of the following year, or such other fiscal year as adopted by the
Employer.
	 
	 	(v)	 	“Post-Retirement Death Benefit” means the benefit payable to the Beneficiary
of a Participant who dies after the commencement of his Retirement Income Benefit, as
described in Section 6.
	 
	 	(w)	 	“Pre-Retirement Death Benefit” means the benefit payable to the Beneficiary
of a Participant who dies prior to commencement of his Retirement Income Benefit, as
described in Section 5.
	 
	 	(x)	 	“Retirement Income Benefit” means the retirement benefit described in Section
4.
	 
	 	(y)	 	“Total Deferral” means the total amount of Deferrals that a Participant
commits to make during the Deferral Period under Section 3(c) with respect to a
particular Benefit Agreement.






	3.	 	Participation






	 	(a)	 	Commencement of Deferral Period:
	 
	 	 	 	An Executive shall become a Participant hereunder upon execution by the Participant
and the Committee of an initial Benefit Agreement. A Participant (with the consent of
the Committee) may enter into additional Benefit Agreements for Deferral Periods
commencing in subsequent Plan Years until the Plan Year commencing on December 1,
1991. Each Benefit Agreement shall become effective on the next December 1 after
execution, and shall contain the items described in this Section and in Section 8(a).
Subject to subsection (b), the elections made in a Benefit Agreement shall be
irrevocable.
	 
	 	(b)	 	Deferrals:
	 
	 	 	 	A Participant may continue to make the Deferrals provided under subsection (d) with
respect to a specific Benefit Agreement until his designation as an Executive is
revoked by the Board of Directors, he terminates




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	 	 	 	employment with the Employer, he receives a hardship withdrawal or he has made the Total
Deferral described in subsection (c).
	 
	 	(c)	 	Election of Total Deferral:
	 
	 	 	 	The Participant shall elect the Total Deferral that he will make during the Deferral Period
in his respective Benefit Agreement. Such Total Deferral shall be either the minimum or
maximum as follows:





	 	 	 	 	 	 	 	 	 
	 	 	Minimum	 	Maximum
	Tier I Executives
	 	$	80,000	 	 	$	160,000	 
	Tier II Executives
	 	 	40,000	 	 	 	80,000	 







	 	(d)	 	Annual Election:
	 
	 	 	 	Participants may irrevocably elect in writing with respect to each Benefit Agreement to make
a Deferral for a Plan Year in the Deferral Period in accordance with the following rules:






	 	(i)	 	Each Participant shall make a Deferral for the
first Plan Year of the respective Deferral Period equal to 25% of his Total
Deferral. The source of such Deferral shall be the Participant’s Covered Bonus
payable in such Plan Year and/or the Participant’s Covered Salary for such Plan
Year, as requested by the Participant in his Benefit Agreement for such Deferral
Period.
	 
	 	(ii)	 	Each Participant may elect to make an annual Deferral for a subsequent Plan Year
of the respective Deferral Period from his Covered Bonus payable in such Plan Year
and/or his Covered Salary payable in such Plan Year. Such election must be made on or
before November 30 preceding the Plan Year. If the Participant elects to make a
Deferral, the amount of the annual Deferral shall be at least $10,000 or $20,000 (the
Minimum Annual Deferral for Tier II or Tier I, respectively), and not more than the
lesser of: 25% of his Total Deferral or, if the Deferral Period is less than four years,
the amount necessary to make such Total Deferral in equal installments over the
Deferral Period; or the amount needed to complete his Total Deferral.
	 
	 	(iii)	 	Deferrals for a Plan Year shall be credited to
Participant’s Accounts as of the end of the month in which the Deferral is
subtracted from the Participant’s Covered Bonus or Covered Salary.




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	 	(iv)	 	If a Participant fails to make his Total Deferral by the end of the
Deferral Period, he shall cease to be a Participant in the Plan with respect
to that Benefit Agreement. He shall receive a lump-sum payment within 90
days of the end of the Deferral Period equal to his Account balance as of
the end of the Deferral Period attributable to such Benefit Agreement
reduced to reflect the crediting of interest at the rate of 3% less than the
Plan Interest Rate rather than the Plan Interest Rate throughout the
Deferral Period and the elimination of Employer contributions that had been
credited to the Account and interest thereon. Neither the Participant,
spouse nor Beneficiary shall be entitled to any further benefit hereunder
with respect to such Benefit Agreement.






	 	(e)	 	Employer Contributions:
	 
	 	 	 	For any month in which the Participant’s Account is credited with a Deferral,
the Account shall also be credited with an Employer contribution. The Employer
contribution shall be equal to 25% of the Participant’s Minimum Annual Deferral as
described in Section 3(d)(ii) and the aggregate of all such Employer contributions
shall not exceed 25% of the minimum Total Deferral available to the Participant under
section 3(c), computed separately with respect to each Benefit Agreement.
	 
	 	(f)	 	Interest:
	 
	 	 	 	Except as otherwise provided, interest shall be credited to each Participant’s Account
quarterly during each Plan Year based upon the Plan Interest Rate in effect for such
Plan Year for so long as there remains a balance in the Participant’s Account.






	4.	 	Participant Benefits






	 	(a)	 	Normal Retirement:






	 	 	 	A Participant who retires on his Normal Retirement Date shall be entitled to a
Retirement Income Benefit commencing at Normal Retirement Date consisting of equal
monthly payments over 20 years if the Participant was less than age 51 when he
commenced participation in the Plan, or 15 years if he had attained age 51 when
he commenced participation. The amount of the monthly payments shall be calculated
to pay out over the specified period the balance in the Account at the commencement of
payments with interest credited monthly on the declining balance at the average
Plan Interest




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	 	 	 	Rate for the five Plan Years preceding the commencement of payments (“minimum interest
rate”). The Participant’s Account shall continue to be credited quarterly with interest at
the Plan Interest Rate and charged with the monthly payments to the Participant. At the end
of every three years until the payment period has elapsed, the actual amount of interest
credited to the Account shall be compared to the interest that would have been generated by
the minimum interest rate over the same time period. If the actual interest is greater than
the minimum interest, the difference shall be paid to the Participant in a lump-sum payment
and subtracted from the Account as a distribution. If it is determined that the minimum
interest exceeds the actual interest, the account shall be adjusted for such difference, but
the Participant will not have to repay any portion of his distributions.






	 	(b)	 	Early Retirement:






	 	(i)	 	A Participant who retires prior to his Normal Retirement Date, but on or after
his Early Retirement Date, shall be entitled to a Retirement Income Benefit commencing
on his Normal Retirement Date, determined in accordance with subsection (a).
	 
	 	(ii)	 	In lieu of the Retirement Income Benefit described in paragraph (i), a
Participant who retires prior to his Normal Retirement Date, but on or after his Early
Retirement Date, may elect with the consent of the Committee at any time prior to his
Normal Retirement Date to commence to receive on the first day of the month following
his early retirement a Retirement Income Benefit determined in the manner set forth in
subsection (a), based upon the balance in his Account as of such date.






	 	(c)	 	Deferred Retirement:






	 	 	 	A Participant who retires after his Normal Retirement Date shall be entitled to a Retirement
Income Benefit commencing on the first day of the month following his actual retirement,
determined in accordance with subsection (a) using the balance in his Account as of his actual
retirement date in lieu of the balance as of his Normal Retirement Date.






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	 	(d)	 	Termination of Employment:
	 
	 	 	 	A Participant who terminates employment prior to his Early Retirement Date shall be entitled
to a termination benefit. The benefit shall be a lump-sum payment made within 90 days of the
end of the Plan Year in which his employment terminates, equal to his Account balance as of
the date of distribution including interest prorated to such date. Neither the Participant,
spouse nor Beneficiary shall be entitled to any further benefit hereunder.
	 
	 	(e)	 	Disability:






	 	(i)	 	A Disabled Participant who is:






	 	(A)	 	Within the initial exclusion period under the Disability Plan and
for that reason only is not receiving benefits thereunder; or
	 
	 	(B)	 	Receiving benefits under the Disability Plan;






shall be deemed to be an Executive during such period and shall continue to be
eligible for retirement benefits without reduction for payments under Section
4(e)(ii) and Pre-Retirement and Post-Retirement Death Benefits under Sections 5 and
6. If the period of disability occurs within a Deferral Period, and the Disabled
Participant had not completed making his Total Deferrals prior to the period of
disability, he shall be excused from making one additional Deferral under each
applicable Benefit Agreement for each Plan Year of disability, but no amounts shall be
credited to his Account with respect to such excused Deferral(s). However, if he
returns to employment within the Deferral Period, he may elect in the normal time
period to make the Deferrals that were previously excused.




	 	(ii)	 	A Disabled Participant who is receiving benefits under the
Disability Plan shall
receive an additional disability benefit under this Plan. The disability benefit shall
consist of monthly payments during the period the Participant is receiving payments under
the Disability Plan. Such monthly payments shall equal on an annual basis 37.5% of the
Total Deferral elected by the Participant under Section 3(c) under all Benefit
Agreements.




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	 	(iii)	 	With the approval of the Committee, the Disabled Participant may withdraw his
Account balance in a lump sum. Such withdrawal shall make the Disabled Participant,
spouse and Beneficiary ineligible for further benefits hereunder except for the benefits
provided under paragraph (ii) of this subsection and the death benefits provided under
Sections 5 and 6.






	 	(f)	 	Hardship Withdrawal:
	 
	 	 	 	At any time prior to the commencement of Retirement Income Benefits hereunder, a Participant
may request the Committee to make a distribution to him from his Account balance in a lump
sum within 90 days. Such distribution shall be made only if the Committee determines that
the Participant is suffering from a financial hardship that cannot be satisfied by his normal
sources of income. In addition, the following rules shall apply separately with respect to
each of the Participant’s Benefit Agreements:






	 	(i)	 	If the hardship withdrawal is to be made within the Deferral Period, the amount
to be distributed shall be the entire Account balance, and neither the Participant,
spouse nor Beneficiary shall be entitled to any further benefit hereunder.
	 
	 	(ii)	 	If the hardship withdrawal is to be made after the Deferral Period, the
Participant may select the portion of his Account to be withdrawn. The Participant will
remain eligible for retirement, death, termination and disability benefits hereunder
(based upon his remaining Account balance where applicable).






	 	(g)	 	Change of Control:
	 
	 	 	 	In the event of a “Change of Control” as defined below, a Participant may elect to withdraw
his entire Account balance (including interest accrued to the date of payment) by giving
written notice to the Committee. Upon the delivery of such notice, the Participant’s Account
balance (together with interest thereon) shall become due and payable as a lump-sum
distribution on the date of such Change of Control.
	 
	 	 	 	A Change of Control shall be deemed to have taken place if:






	 	(i)	 	As a result of or in connection with any cash
tender or exchange offer, merger or other business combination, sale of assets or contested
election,




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or any combination of the foregoing transactions (“Transaction”), the persons
who were directors of the Company before the Transaction shall cease to
constitute a majority of the Board of Directors of the Company or any
successor to the Company, or




	 	(ii)	 	Any person or “group” as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended, becomes the
beneficial owner of the shares of the Company having 25% or more of the total
number of votes that may be cast for the election of directors of the Company,
or
	 
	 	(iii)	 	The shareholders of the Company shall have approved an agreement
providing for a transaction in which the Company will cease to be an independent
publicly-owned company or for the exchange of at least a majority of the
outstanding stock for cash or property or securities (other than common stock of
the Company) or for the sale or other disposition of all or substantially all of
the assets of the Company.






	5.	 	Pre-Retirement Death Benefit






	 	(a)	 	Regular Benefit — Account Balance:
	 
	 	 	 	The Beneficiary of a Participant who dies:






	 	(i)	 	While employed by the Employer; or
	 
	 	(ii)	 	After termination, but prior to commencement of his Retirement
Income Benefit






shall be entitled to receive the balance in the Participant’s Account. This will be paid in
a lump sum unless the Participant (with the consent of the Committee) elected a different
payment period prior to his death. A Participant may change this election annually during
the month of December. The benefit shall be paid or shall commence to be paid as soon as
practicable after the Participant’s death.




	 	(b)	 	Enhanced Benefit — Pre-Retirement Survivor Annuity
	 
	 	 	 	The Beneficiary of a Participant who dies:






	 	(i)	 	While employed
by the Employer, or






	 	(ii)	 	After termination of employment having qualified for a Retirement
Income Benefit, but prior to commencement of his Retirement Income Benefit; and




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	 	(iii)	 	After waiving coverage under the supplemental
executive group term life insurance plan provided by the Employer






	 	 	shall be entitled to the death benefit provided under
subsection (a), and shall also be
entitled to ten annual payments of $145,000 commencing as soon as practicable after the
Participant’s death.








	6.	 	Post-Retirement Death Benefit






	 	(a)	 	Regular Benefit:
	 
	 	 	 	The Beneficiary of a Participant who dies after commencement of his Retirement Income
Benefit shall be entitled to continue to receive the Retirement Income Benefit
payments being made to the Participant under Section 4 for the period specified in
that section.
	 
	 	(b)	 	Spouse’s Survivor Benefit:
	 
	 	 	 	The spouse of a Participant who dies after commencement of his Retirement Income
Benefit on account of early, normal or deferred retirement shall be entitled to
receive a spouse’s survivor benefit. The spouse’s survivor benefit shall commence
after all benefits have been paid to the Beneficiary under subsection (a), and shall
consist of an annuity for the life of the spouse with monthly payments equal to 66.67%
of the average monthly payments made to the Participant and Beneficiary under Sections
4 and 6(a), respectively. Notwithstanding the foregoing, if the spouse is more than
five years younger than the Participant, the annuity will be determined with reference
to the actual age of the spouse and the monthly payments reduced to produce the
actuarial equivalent of an annuity for a spouse who is five years younger than the
Participant. In addition, a Benefit Agreement for a Benefit Deferral Period commencing
after December 1, 1987 may set forth a different Post-Retirement Death Benefit
applicable to such Benefit Agreement.




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	7.	 	Vesting of Benefits






	 	(a)	 	Participant’s Account:
	 
	 	 	 	Except as otherwise provided in Section 3(d)(iv), a Participant shall be 100% vested
in his Account balance at all times and shall rank as an unsecured creditor of the
Company for his entire Account balance.
	 
	 	(b)	 	Other Benefits:
	 
	 	 	 	Retirement and death benefits, to the extent that they exceed a Participant’s Account
balance, shall vest only upon the retirement or death of the Participant, whichever
is applicable, and may be modified or eliminated until such vesting in accordance
with Section 12.






	8.	 	Additional Provisions






	 	(a)	 	Benefit Agreement:
	 
	 	 	 	The Committee shall provide to each Executive a form of Benefit Agreement with respect
to each Deferral Period for which the Committee will permit the Executive to make
Deferrals, which shall set forth the Executive’s acceptance of the benefits provided
hereunder, his agreement to be bound by the terms of the Plan and such other matters
as are set forth in this Plan or deemed advisable by the Committee.
	 
	 	(b)	 	Exclusion for Suicide or Self-Inflicted
Injury:
	 
	 	 	 	Notwithstanding any other provision of the Plan, no Spouse’s Survivor Benefit under
Section 6(b) with respect to a specific Benefit Contract shall be paid to the spouse
or Beneficiary of any Executive who dies within two years of the effective date of
such Benefit Contract as the result of suicide or self-inflicted injury.
	 
	 	(c)	 	Leave of Absence:
	 
	 	 	 	An Executive who is on an approved leave of absence with salary, or on an approved
leave of absence without salary for a period of not more than six months, shall be
deemed to be an Executive employed by the Employer during such leave of absence. An
Executive who is on an approved leave of absence without salary for a period in excess
of six months shall be deemed to have voluntarily




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	 	 	 	terminated his employment as of the end of such six-month period and therefore
shall be subject to the conditions set forth in 

Section 4(d).






	 	(d)	 	Alternative Forms of Benefit:
	 
	 	 	 	The Board of Directors in its sole discretion, but with the consent of the recipient,
may elect to pay the Participant, spouse or Beneficiary an actuarially equivalent
lump sum or other form of benefit that it deems appropriate in lieu of the form of
benefit otherwise provided.
	 
	 	(e)	 	Actuarial Equivalence:
	 
	 	 	 	Actuarial equivalence hereunder shall be determined using the interest and mortality
factors adopted from time to time by the Board of Directors or the Committee. The
initial factors to be used shall be an interest rate of six percent (6%) per year and
a mortality assumption based upon the 1970 Group Annuity Table for males (to be used
for both males and females).
	 
	 	(f)	 	Withholding:
	 
	 	 	 	Benefit payments hereunder shall be subject to applicable federal, state or
local withholding laws.






	9.	 	Funding of Benefits






	 	 	 	The Plan shall be unfunded. All benefits payable under the Plan shall be paid from
the Employer’s general assets, and nothing contained in the Plan shall require the
Employer to set aside or hold in trust any funds for the benefit of a Participant or
his Beneficiary, who shall have the status of a general unsecured creditor with
respect to the Employer’s obligation to make payments under the Plan. Any funds of
the Employer available to pay benefits under the Plan shall be subject to the claims
of general creditors of the Employer and may be used for any purpose by the Employer.






	10.	 	Administration of the Plan






	 	(a)	 	The Committee:
	 
	 	 	 	The Committee shall administer the Plan and shall keep a written record of its action and
proceedings regarding the Plan and all dates, records and documents relating to its administration
of the Plan.





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	 	 	 	Subsequent to the close of each Plan Year, the Committee shall apprise in writing each
Executive of his Account balance.






	 	 	 	The Committee is authorized to interpret the Plan, to make, amend and rescind such rules as
it deems necessary for the proper administration of the Plan, to make all other
determinations necessary or advisable for the administration of the Plan and to correct any
defect or supply any omission or reconcile any inconsistency in the Plan in the manner and to
the extent that the Committee deems desirable to carry the Plan into effect. The powers and
duties of the Committee shall include, without limitation, the following:






	 	(i)	 	Resolving all questions relating to the
eligibility of Executives to become Participants;
	 
	 	(ii)	 	Determining the amount of benefits payable to Participants or their
Beneficiaries and authorizing and directing the Employer with respect to the payment of
benefits under the Plan.
	 
	 	(iii)	 	Construing and interpreting the Plan whenever
necessary to carry out its intention and purpose and making and publishing such
rules for the regulation of the Plan as are not inconsistent with the terms of the
Plan.
	 
	 	(iv)	 	Compiling and maintaining all records it
determines to be necessary, appropriate or convenient in connection with the
administration of the Plan; and
	 
	 	(v)	 	Engaging any administrative, actuarial, legal,
medical, accounting, clerical, or other services it may deem appropriate to
effectuate the Plan.






Any action taken or determination made by the Committee shall, except as otherwise provided in
Section 12 below, be conclusive on all parties. No members of the Committee shall vote on any
matter affecting such member. In determining whether an Executive is Disabled, the Committee
may rely on the conclusions reached by any insurance carrier that has issued an insurance
policy to the Employer covering the Executive.




	 	(b)	 	Expenses of the Committee:
	 
	 	 	 	The expenses of the Committee properly and actually incurred in the performance of its duties
under the Plan shall be paid by the Employer and shall not decrease Participants’ Account
balances.






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	 	(c)	 	Bonding and Compensation:
	 
	 	 	 	The members of the Committee shall serve without bond, and without compensation for their
services as Committee members except as the Employer may provide in its discretion.
	 
	 	(d)	 	Information to be Submitted to the Committee:
	 
	 	 	 	To enable the Committee to perform its functions, the Employer shall supply full and timely
information to the Committee on all matters relating to Executives and Participants as the
Committee may require, and shall maintain such other records as the Committee may determine
are necessary in order to determine the benefits due or which may become due to Participants
or their Beneficiaries under the Plan. The Committee may rely on such records as conclusive
with respect to the matters set forth therein.
	 
	 	(e)	 	Notices, Statements and Reports:
	 
	 	 	 	The Employer shall be the “administrator” of the Plan as defined in Section 3(16)(A) of ERISA
for purposes of the reporting and disclosure requirements imposed by ERISA and the Code. The
Committee shall assist the Employer, as requested, in complying with such reporting and
disclosure requirements.
	 
	 	(f)	 	Service of Process:
	 
	 	 	 	The Committee may from time to time designate an agent of the Plan for the service of legal
process. The Committee shall cause such agent to be identified in materials it distributes
or causes to be distributed when such identification is required under applicable law. In
the absence of such a designation, the Employer shall be the agent of the Plan for the
service of legal process.
	 
	 	(g)	 	Insurance:
	 
	 	 	 	The Employer, in its discretion, may obtain, pay for and keep current a policy or policies of
insurance insuring the Committee members, the members of the Board of Directors and other
employees to whom any responsibility with respect to the administration of the Plan has been
delegated, against any and all costs, expenses and liabilities (including attorneys’ fees)
incurred by such persons as a result of any act, or omission to act, in connection with the
performance of their duties, responsibilities, and obligations under the Plan and any
applicable law.




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	 	(h)	 	Indemnity:
	 
	 	 	 	If the Employer does not obtain, pay for and keep current the type of insurance policy
or policies referred to in subsection (g), or if such insurance is provided but any of
the parties referred to in subsection (g) incur any costs or expenses which are not
covered under such policies, then the Employer shall indemnify and hold harmless, to
the extent permitted by law, such parties against any and all costs, expenses and
liabilities (including attorneys’ fees) incurred by such parties in performing their
duties and responsibilities under this Plan, provided that such party or parties were
not guilty of willful misconduct. In the event that such party is named as a defendant
in a lawsuit or proceeding involving the Plan, the party shall be entitled to receive
on a current basis the indemnity payments provided for in this subsection, provided
however that if the final judgment entered in the lawsuit or proceeding holds that the
party is guilty of willful misconduct with respect to the Plan, the party shall be
required to refund the indemnity payments that it has received.





11. Claims Procedure





	 	(a)	 	Filing Claim for Benefits:
	 
	 	 	 	If a Participant or Beneficiary (hereinafter referred to as the “Applicant”) does not
receive the timely payment of the benefits which the Applicant believes are due under
the Plan, the Applicant may make a claim for benefits in the manner hereinafter
provided.
	 
	 	 	 	All claims for benefits under the Plan shall be made in writing and shall be signed by
the Applicant. Claims shall be submitted to a representative designated by the
Committee and hereinafter referred to as the “Claims Coordinator.” The Claims
Coordinator may, but need not, be a member of the Committee. If the Applicant does
not furnish sufficient information with the claim for the Claims Coordinator to
determine the validity of the claim, the Claims Coordinator shall indicate to the
Applicant any additional information which is necessary for the Claims Coordinator to
determine the validity of the claim.
	 
	 	 	 	Each claim hereunder shall be acted on and approved or disapproved by the Claims
Coordinator within 90 days following the receipt by the Claims Coordinator of the
information necessary to process the claim.




-16-









 






	 	 	 	In the event the Claims Coordinator denies a claim for
benefits in whole or in part, the
Claims Coordinator shall notify the Applicant in writing of the denial of the claim and
notify the Applicant of his right to a review of the Claims Coordinator’s decision by the
Committee. Such notice by the Claims Coordinator shall also set forth, in a manner
calculated to be understood by the Applicant, the specific denial, the specific provisions of
the Plan or Agreement on which the denial is based, a description of any additional material
or information necessary to perfect the claim with an explanation of why such material or
information is necessary, and an explanation of the Plan’s appeals procedure as set forth in
this section.
	 
	 	 	 	If no action is taken by the Claims Coordinator on an Applicant’s claim within 90 days after
receipt by the Claims Coordinator, such claim shall be deemed to be denied for purposes of
the following appeals procedure.
	 
	 	(b)	 	Appeals Procedure:
	 
	 	 	 	Any Applicant whose claim for benefits is denied in whole or in part may appeal from such
denial to the Committee for a review of the decision by the Committee. Such appeal must be
made within three months after the Applicant has received actual or constructive notice of
the denial as provided above. An appeal must be submitted in writing within such period and
must:






	 	(i)	 	Request a review by the Committee of the claim for benefits under the Plan;
	 
	 	(ii)	 	Set forth all of the grounds upon which the Applicant’s request for review is based and any facts in support thereof; and
	 
	 	(iii)	 	Set forth any issues or comments which the Applicant deems pertinent
to the appeal.






	 	 	 	The Committee shall regularly review appeals by Applicants. The Committee shall act upon each
appeal within 60 days after receipt thereof unless special circumstances require an extension
of the time for processing, in which case a decision shall be rendered by the Committee as
soon as possible but not later than 90 days after the last documentation is received by the
Committee.
	 
	 	 	 	The Committee shall make full and fair review of each appeal and any written materials
submitted by the Applicant in connection therewith. The Committee may require the Applicant
to submit such additional facts,




-17-









 







	 	 	 	documents or other evidence as the Committee in its discretion deems necessary or
advisable in making its review. The Applicant shall be given the opportunity to
review pertinent documents or materials upon submission of a written request to the
Committee, provided the Committee finds the requested documents or materials are
pertinent to the appeal.
	 
	 	 	 	On the basis of its review, the Committee shall make an independent determination of
the Applicant’s eligibility for benefits under the Plan. The decision of the
Committee on any claim for benefits shall be final and conclusive upon all parties
thereto.
	 
	 	 	 	In the event the Committee denies an appeal in whole or in part, the Committee shall
give written notice of the decision to the Applicant, which notice shall set forth, in
a manner calculated to be understood by the Applicant, the specific reasons for such
denial and which shall make specific reference to the pertinent provisions of the Plan
or Agreement on which the Committee’s decision is based.





12. Amendment, Termination or Suspension





	 	(a)	 	The Plan may be amended or terminated by the Board of
Directors at any time. Such amendment or termination
may modify or eliminate any benefit hereunder other than
a benefit that is in pay status, or the vested portion
of a benefit that is not in pay status.
	 
	 	(b)	 	If the Board of Directors determines that payments under
the Plan would have a material adverse effect on the
Employer’s ability to carry on its business, the Board
of Directors may suspend such payments temporarily for
such time as in its sole discretion it deems advisable,
but in no event for a period in excess of one year. The
Employer shall pay such suspended payments immediately
upon the expiration of the period of suspension.
	 
	 	(c)	 	The Plan is intended to provide benefits for “a select
group of management or highly compensated employees”
within the meaning of Sections 201, 301 and 401 of
ERISA, and therefore to be exempt from Sections 2, 3 and
4 of Title 1 of ERISA. Accordingly, the Plan shall
terminate and, except for existing Account balances and
other benefits in pay status (which, at the option of
the Board of Directors, may be accelerated and the
balance paid in a single, actuarially equivalent lump
sum), no further benefits, vested or nonvested, shall be
paid hereunder in the event it is determined by a court
of competent jurisdiction or by an opinion of counsel




-18-









 






	 	 	 	that the Plan constitutes an employee pension benefit plan within the meaning of
Section 3(2) of ERISA which is not so exempt.





13. Miscellaneous





	 	(a)	 	Participant Rights:
	 
	 	 	 	Nothing in the Plan shall confer upon a Participant the right to continue in the
employ of the Employer or shall limit or restrict the right of the Employer to
terminate the employment of a Participant at any time with or without cause.
	 
	 	(b)	 	Alienation:
	 
	 	 	 	Except as otherwise provided in the Plan, no right or benefit under the Plan shall be
subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge,
and any attempt to anticipate, alienate, sell, assign, pledge, encumber or charge such
right or benefit shall be void. No such right or benefit shall in any manner be liable
for or subject to the debts, liability or torts of a Participant or Beneficiary.
	 
	 	(c)	 	Partial Invalidity:
	 
	 	 	 	If any provision in the Plan is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remaining provisions shall nevertheless
continue to be in full force and effect without being impaired or invalidated in
any way.
	 
	 	(d)	 	Choice of Law:
	 
	 	 	 	The Plan shall be construed in accordance with ERISA and the laws of the State of
California.
	 
	 	(e)	 	Payment to Minors or Persons Under Legal Disability:
	 
	 	 	 	If any benefit becomes payable to a minor or to a person under a legal disability,
payment of such benefit shall be made only to the conservator or the guardian of the
estate of such intended recipient appointed by a court of competent jurisdiction or any
other individual or institution maintaining or having custody of such intended
recipient. A release by such conservator, guardian, individual or institution shall
constitute a legal discharge of the Plan’s obligation to the intended recipient.




-19-









 










Headings of sections and subsections as used herein are inserted solely for convenience and
reference and constitute no part of the Plan.



Executed
at Los Angeles, California this                      day of                      ,                     




	 	 	 	 	 
	 	KAUFMAN AND BROAD, INC.

 	 
	 	By  	/s/ Norman J.  Metcalfe
 	 
	 	 	Norman J.  Metcalfe 	 
	 	 	Its Executive Vice President 	 
	 



	 	 	 	 	 
	 	 	 
	 	By  	                                              /s/ Susan L. Harris
 	 
	 	 	Susan L. Harris  	 
	 	 	Its Secretary 	 
	 




-20-












 





KAUFMAN AND BROAD, INC.

EXECUTIVE DEFERRED COMPENSATION PLAN

BENEFIT AGREEMENT




     This Benefit Agreement is entered into between KAUFMAN
AND BROAD, INC. (the “Company”) and                                         
(the “Employee”), pursuant to the KAUFMAN AND BROAD, INC. EXECUTIVE
DEFERRED COMPENSATION PLAN (the “Plan”).



1. Provisions of the Plan




     The Employee hereby acknowledges receipt of a copy of the Plan. In particular, the Employee
acknowledges having read and understood the provisions of the Plan respecting the entitlement to
and calculation of benefits, that no assets of the Company are to be segregated to be used to pay
benefits under the Plan, and that the Plan may be amended or terminated at any time
in accordance with its terms.



2. Status as Executive




     The Company hereby acknowledges that the Employee presently qualifies as a “Tier ___
Executive” as defined in the Plan, and as such is eligible to become a Participant in the Plan.
Such qualification may be terminated by the Board of Directors of the Company at any time in its
sole discretion.



3. Election to Participate




     The Employee hereby elects to participate in the Plan, and to make the following Total
Deferral under the Plan during the seven year Deferral Period:



Tier I Executive (Minimum $80,000; Maximum $160,000) — $                    

Tier II Executive (Minimum $40,000; Maximum $80,000) — $                    



The Employee confirms that he will make a Deferral equal to 25% of his Total Deferral in the 1986
Plan Year, and that he will make the balance of his Total Deferrals during the Deferral Period by
filing appropriate annual election forms with the Committee in accordance with the Plan. All
Deferral elections are irrevocable. The Deferral for the 1986 Plan Year shall be made from the
Employee’s:



Covered Salary       ; or

Covered Bonus       . (check one)




 









 





4. Acceptance of Benefits




     The Employee hereby agrees on his own behalf and on behalf of his Beneficiaries to accept
those benefits under the Plan to which he or his beneficiaries may become entitled, and to be bound
by all of the terms and conditions of the Plan.



5. Designation of Beneficiary




     The Plan provides certain death benefits to the Beneficiary specifically designated by the
Employee for that purpose. The Committee which administers the Plan will make appropriate
beneficiary designation forms available to the Employee.



6. Plan Document




     All of the terms and conditions of the Plan are contained in the Plan document, and no
officer or employee of the Company has been authorized to vary such terms and conditions orally
or in writing. The Plan may be modified only by amendment to the Plan adopted by the Board of
Directors.



	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	KAUFMAN AND BROAD, INC.
	 
	 	 	 	 	 	 	 	 
	Date of Signature:

	 	 	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Title:
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date of Signature:	 	 	 	 	 	EMPLOYEE
	 

	 	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 





 









 





KAUFMAN AND BROAD, INC.

EXECUTIVE DEFERRED COMPENSATION PLAN

DESIGNATION OF BENEFICIARY




	 	 	 
	Name of Executive:
	 	 
	 

	 	 





Check if this is a revised designation




     I hereby revoke any previous Designation of Beneficiary that I may have made with respect to
this Plan, and designate the following Beneficiary(ies) to receive any benefit payable under the
Plan by reason of my death as to which the Plan permits such designation:



Primary Beneficiary




	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	Relationship	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Other	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 





Contingent Beneficiary




     If no Primary Beneficiary is alive when I die, the benefit should be paid to the following
Contingent Beneficiary:



	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	Relationship	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Other	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 





	 	 	 
	 

	 	 
	Signature of Participant

	 	Date
	 
	 	 
	 

	 	 
	Consent of Participant’s Spouse

	 	Date






 









 





Instructions




     You may normally list only one person or entity (such as a testamentary or inter vivos trust)
in both the Primary and Contingent Beneficiary sections. However, if you are designating your
children or grandchildren in either section and you have more than one such child or grandchild,
you may designate any number of such children or grandchildren as Beneficiaries. In that event,
they will share in the benefit to be distributed in the percentage shares that you indicate. If you
do not indicate percentage shares, each Primary Beneficiary will share equally in the benefit to be
distributed. If one or more Primary Beneficiaries dies before you do,
their share of the benefit
will be divided among the surviving Primary Beneficiary(ies) (in proportion to their relative
percentage shares).




     Your
Contingent Beneficiary will only receive a distribution of the benefit if no Primary
Beneficiary is alive at the time of your death. If you  list more than one Contingent
Beneficiary under the circumstances permitted above, the rules for dividing the benefit between
them are the same as the rules for dividing the benefit between your Primary Beneficiaries.



     If you are married, you are urged to consult your spouse with respect to any designation that
you make on this form, and to have your spouse sign the designation. You are also urged to consult
with your estate planning counsel.



     This Designation will remain in effect until the Plan’s Administrative Committee has
received a revised Designation properly signed by you. You may file a revised Designation at any
time.



	 	 	 	 	 
	 

	 	Return to:
 

	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 

	 	 






 









 






KAUFMAN AND BROAD, INC.

EXECUTIVE DEFERRED COMPENSATION PLAN

ANNUAL DEFERRAL ELECTION




	 	 	 	 	 	 	 
	Name of Participant:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	Plan Year:
	 	 	 	 	 	 
	 

	 	 

	 	 	 	 






     I hereby elect to have the following portion of my Base Salary or Base Bonus payable in the
Plan Year deferred and credited to my Account in the Kaufman and Broad, Inc. Executive Deferred
Compensation Plan:



	 	 	 	 	 	 	 
	 

	 	Base Salary $	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Base Bonus $	 	 	 	 
	 

	 	 	 	 

	 	 






I understand that:




     1. The minimum Deferral is $5,000 and the maximum Deferral is 25% of the
Total Deferral that I have elected to make over the seven year Deferral Period.



     2. I may not defer more than my Total Deferral.



     3. This Deferral Election is irrevocable.



     4. This Deferral Election is invalid if not submitted
to the Plan Administration Committee within the time limits
imposed by the Plan. The Committee may reject a Deferral
Election that does not conform to the terms of the Plan.



	 	 	 	 	 
	Date of Signature:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	Participant