exv4w1






Exhibit 4.1




SECOND AMENDMENT TO RIGHTS AGREEMENT




     Second Amendment, dated as of January 22, 2009 (this “Amendment”), to the Rights Agreement,
dated as of February 4, 1999, as amended (the “Rights Agreement”), by and between KB Home (formerly
Kaufman and Broad Home Corporation), a Delaware corporation (the “Company”), and Mellon Investor
Services LLC (formerly ChaseMellon Shareholder Services, L.L.C.), as rights agent (the “Rights
Agent”).



RECITALS




     WHEREAS, the Board of Directors of the Company has determined that it is in the best interests
of the Company to amend the Rights Agreement as set forth in this Amendment;



     WHEREAS, pursuant to Section 27 of the Rights Agreement, prior to the Distribution Date, the
Company may, and the Rights Agent shall, if the Company so directs, supplement or amend any
provision of the Rights Agreement in any respect whatsoever without the approval of any holders of
certificates representing shares of Common Stock or Special Common Stock, provided that such
supplement or amendment does not change or increase the Rights Agent’s duties, liabilities or
obligations; and



     WHEREAS, pursuant to the terms of the Rights Agreement and in accordance with Section 27
thereof, the Company has directed that the Rights Agreement be amended as set forth in this
Amendment, and by its execution and delivery hereof, directs the Rights Agent to execute this
Amendment.



     NOW, THEREFORE, in consideration of the premises and the mutual agreements set forth in the
Rights Agreement and in this Amendment, the parties hereby amend the Rights Agreement as follows:



     1. The definition of “Acquiring Person” in Section 1 of the Rights Agreement is hereby amended
and restated in its entirety as follows:




     ““Acquiring Person” means any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any Subsidiary of the Company, or any
entity organized, appointed or established for or pursuant to the terms of any such plan,
any Exempt Shareholder, or any Permitted Shareholder) who or which, together with all
Affiliates and Associates of such Person, is or becomes the Beneficial Owner of 4.9% or more
of the then-outstanding Common Stock and the Special Common Stock, taken as a whole,
provided, however, that (i) any Person who would otherwise be an Acquiring
Person as of 4:00 p.m., New York City time, on January 22, 2009 (such date and time, the
“Amendment Date”) (including any Person that would otherwise qualify as an Acquiring Person
but for being an Exempt Shareholder on such date) will not be deemed to be an Acquiring
Person for any purpose of this Agreement prior to or after such date unless and until such
time as (A) such Person or any Affiliate or Associate of such Person thereafter becomes the
Beneficial Owner of any additional shares of Common Stock or Special Common Stock, other
than (1) pursuant to any agreement or
regular-way purchase order for Common Stock or Special Common Stock that is in effect
on or prior to the Amendment Date and consummated in accordance with its terms after



 









 






the Amendment Date or (2) as a result of a stock dividend, rights dividend, stock split or
similar transaction effected by the Company in which all holders of Common Stock or Special
Common Stock, as the case may be, are treated equally, or (B) any other Person who is the
Beneficial Owner of shares of Common Stock or Special Common Stock becomes an Affiliate or
Associate of such Person, provided that the exclusion in this clause (i) shall cease
to apply with respect to any Person at such time as such Person, together with all
Affiliates and Associates of such Person, ceases to Beneficially Own 4.9% or more of the
then-outstanding shares of Common Stock and Special Common Stock, taken as a whole, (ii) a
Person will not be deemed to have become an Acquiring Person solely as a result of a
reduction in the number of shares of Common Stock or Special Common Stock outstanding unless
and until such time as (A) such Person or any Affiliate or Associate of such Person
thereafter becomes the Beneficial Owner of any additional shares of Common Stock or Special
Common Stock, other than as a result of a stock dividend, stock split or similar transaction
effected by the Company in which all holders of shares of Common Stock or Special Common
Stock, as the case may be, are treated equally, or (B) any other Person who is the
Beneficial Owner of shares of Common Stock or Special Common Stock thereafter becomes an
Affiliate or Associate of such Person, and (iii) a Person will not be deemed to have become
an Acquiring Person solely as a result of an Exempt Transaction unless and until such time
as (A) such Person or any Affiliate or Associate of such Person thereafter becomes the
Beneficial Owner of any additional shares of Common Stock or Special Common Stock, other
than as a result of a stock dividend, rights dividend, stock split or similar transaction
effected by the Company in which all holders of shares of Common Stock or Special Common
Stock, as the case may be, are treated equally, or (B) any other Person who is the
Beneficial Owner of shares of Common Stock or Special Common Stock thereafter becomes an
Affiliate or Associate of such Person. Notwithstanding the foregoing, if (1) the Board of
Directors of the Company determines that a Person who would otherwise be an “Acquiring
Person” as defined pursuant to the foregoing provisions of this definition has become such
inadvertently and that the exemption of such Person from the definition of “Acquiring
Person” is in the best interests of the Company, and (2) such Person divests as promptly as
practicable or agrees in writing with the Company to divest, a sufficient number of shares
of Common Stock or Special Common Stock so that such Person would no longer be an “Acquiring
Person” as defined pursuant to the foregoing provisions of this definition, then such Person
shall not be deemed to be an “Acquiring Person” for any purposes of this Agreement.”



     2. The definitions of “Affiliate” and “Associate” set forth in Section 1 of the Rights
Agreement are hereby amended and restated in their entirety as follows:




     ““Affiliate” and “Associate” shall have the respective meanings ascribed to such terms
in Rule 12b-2 of the General Rules and Regulations under the Exchange Act, and to the extent
not included within the foregoing clause, will also include, with respect to any Person, any
other Person (other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any Subsidiary of the Company, or any entity organized, appointed or
established for or pursuant to the terms of any such plan,
an Exempt Shareholder or a Permitted Shareholder) whose Common Stock and/or Special
Common Stock would be deemed constructively owned by such first Person,



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owned by a single
“entity” as defined in Section 1.382-3(a)(1) of the Treasury Regulations, or otherwise
aggregated with shares of Common Stock and/or Special Common Stock owned by such first
Person pursuant to the provisions of the Code or the Treasury Regulations.”



     3. The definition of “Beneficial Owner” in Section 1 of the Rights Agreement is hereby amended
by adding the following sentence at the end thereof:




“Notwithstanding anything in this Agreement to the contrary, to the extent not within the
foregoing provisions of this definition of “Beneficial Owner,” a Person shall be deemed the
“Beneficial Owner” of, and shall be deemed to “beneficially own” or have “beneficial
ownership” of, any securities which such Person would be deemed to constructively own or
which otherwise would be aggregated with securities owned by such Person pursuant to Section
382 of the Code, or any successor provision or replacement provision.”



     4. The definition of “Person” in Section 1 of the Rights Agreement is hereby amended and
restated in its entirety as follows:




     ““Person” shall mean any individual, firm, corporation, partnership, limited liability
company, limited liability partnership, trust or other legal entity, group of persons making
a “coordinated acquisition” of shares or otherwise treated as an entity within the meaning
of Section 1.382-3(a)(1) of the Treasury Regulations or otherwise, and includes any
successor (by merger or otherwise) of such entity.”



     5. Section 1 of the Rights Agreement is hereby further amended by adding the following
definitions thereto:




     ““Code” means the Internal Revenue Code of 1986, as amended.




     “Exempt Transaction” means any transaction that the Board of Directors of the Company
determines, in its sole discretion, is exempt for purposes of this Agreement.




     “Permitted Shareholder” means a Person whose Beneficial Ownership (together with all
Affiliates and Associates of such Person) of 4.9% or more of the then-outstanding shares of
Common Stock and Special Common Stock, taken as a whole will not, as determined by the
Company’s Board of Directors in its sole discretion, jeopardize or endanger the availability
to the Company of any Tax Benefit, provided, however, that such a Person
will cease to be a Permitted Shareholder if the Board makes a contrary determination in its
sole discretion with respect to the effect of such Person’s Beneficial Ownership (together
with all Affiliates and Associates of such Person) of Common Stock and/or Special Common
Stock, regardless of the reason therefor.




     “Tax Benefits” means the net operating loss carry-overs, capital loss carry-overs,
general business credit carry-overs, alternative minimum tax credit carry-overs and foreign
tax credit carry-overs, as well as any “net unrealized built-in loss” within the
meaning of Section 382 of the Code or any successor provision or replacement provision,
of the Company or any direct or indirect subsidiary thereof.



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     “Treasury Regulations” means final, temporary and proposed income tax regulations
promulgated under the Code, including any amendments thereto.”



     6. Section 29 of the Rights Agreement is hereby amended and restated in its entirety as
follows:




     “Section 29. Determinations and Actions by the Board of Directors, etc. For
all purposes of this Agreement, any calculation of the number of shares of Common Stock or
Special Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock or Special
Common Stock of which any Person is the Beneficial Owner, shall be made in accordance with,
as the Board of Directors deems to be applicable, the last sentence of Rule 13d-3(d)(1)(i)
of the General Rules and Regulations under the Exchange Act or the provisions of Section 382
of the Code, or any successor provision or replacement provision. The Board of Directors of
the Company shall have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board or to the Company, or as
may be necessary or advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this Agreement and (ii)
make all determinations deemed necessary or advisable for the administration of this
Agreement (including, without limitation, any determination contemplated by the definition
of “Acquiring Person” or any determination as to whether particular Rights shall have become
void and any determination to redeem or not redeem the Rights or to amend the Agreement).
All such actions, calculations, interpretations and determinations (including, for purposes
of clause (y) below, all omissions with respect to the foregoing) which are done or made by
the Board in good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties and (y) not subject the Board
of Directors of the Company to any liability to any Person, including without limitation the
Rights Agent and the holders of Rights. The Rights Agent is entitled always to assume the
Company’s Board of Directors acted in good faith and shall be fully protected and incur no
liability in reliance thereon.”



     7. Exhibit B to the Rights Agreement is hereby deemed amended in a manner consistent with this
Amendment.



     8. Capitalized terms used without other definition in this Amendment will be used as defined
in the Rights Agreement.



     9. This Amendment shall be deemed to be a contract made under the laws of the State of
Delaware and for all purposes shall be governed by and construed in accordance with the laws of
such State applicable to contracts to be made and performed entirely within such State,
provided, however, that all provisions regarding the rights, duties and obligations
of the Rights Agent shall be governed by and construed in accordance with the laws of the State of
New York applicable to contracts made and to be performed entirely within such State.



     10. The Rights Agreement will not otherwise be supplemented or amended by virtue of this
Amendment, but will remain in full force and effect.



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     11. This Amendment may be executed in any number of counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and all such counterparts shall together
constitute one and the same instrument.



     12. The undersigned officer of the Company, being duly authorized on behalf of the Company,
hereby certifies in his or her capacity as an officer on behalf of the Company to the Rights Agent
that (a) this Amendment is in compliance with the terms of Section 27 of the Rights Agreement, and
(b) this Amendment does not change or increase the Rights Agent’s duties, liabilities or
obligations.



     13. By its execution and delivery hereof, the Company directs the Rights Agent to execute this
Amendment.



[Signatures on Following Page]




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     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed, all as
of the day and year first above written.



	 	 	 	 	 
	 	KB HOME

 	 
	 	By:  	/s/  Wendy C. Shiba
 	 
	 	 	Name:  	Wendy C. Shiba 	 
	 	 	Title:  	Executive Vice President, General 

Counsel and Corporate Secretary 	 
	 



	 	 	 	 	 
	 	MELLON INVESTOR SERVICES LLC

 	 
	 	By:  	/s/  James Kirkland
 	 
	 	 	Name:  	James Kirkland 	 
	 	 	Title:  	Assistant Vice President and Relationship Manager 	 
	 




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