Document:

exv10w35

	 	 	 	 	 

Exhibit 10(35)

Summary of 2010 Salaries of Named Executive Officers

The following table sets forth the current base salaries provided to the Company’s CEO and the
four most highly compensated executive officers (the “Named Executive Officers”):

	 	 	 	 	 
	Executive Officer	 	Current Salary
	Andrew B. Schmitt
	 	$	620,000	 
	Jerry W. Fanska
	 	$	365,000	 
	Jeffrey J. Reynolds
	 	$	350,000	 
	Steven F. Crooke
	 	$	310,000	 
	Eric R. Despain
	 	$	300,000	 

All of the Named Executive Officers, including Andrew B. Schmitt, President and CEO, Jerry W.
Fanska, Senior Vice President—Finance and Treasurer, Jeffrey J. Reynolds, Executive Vice President
of Operations, Steven F. Crooke, Senior Vice President—General Counsel and Secretary and Eric R.
Despain, Senior Vice President and President of the Minerals Division, are also eligible to receive
a bonus each year under the Company’s Executive Incentive Compensation Plan (the “Executive IC
Plan”). The bonuses paid to the Company’s CEO and four most highly compensated executive officers
under the Executive IC Plan for the fiscal year ended January 31, 2010 are as shown in the
following table:

	 	 	 	 	 
	Executive Officer	 	FY 2010 Bonus
	Andrew B. Schmitt
	 	$	363,362	 
	Jerry W. Fanska
	 	$	176,465	 
	Jeffrey J. Reynolds
	 	$	140,505	 
	Steven F. Crooke
	 	$	149,874	 
	Eric R. Despain
	 	$	50,000	 

Under the Executive IC Plan, each participant is eligible for an annual cash bonus in a target
amount (the “Target Bonus”) equal to a percentage (80% in the case of Mr. Schmitt and 60% in the
case of Messrs. Fanska, Reynolds, Crooke and Despain) of such participant’s base compensation. The
Target Bonus is adjusted (up or down) based upon the performance of the Company as compared to
certain goals adopted and approved by the Board of Directors. In no event, however, can a
participant’s annual cash bonus under the Executive IC Plan exceed a certain percentage (160% in
the case of Mr. Schmitt and 120% in the case of Messrs. Fanska, Reynolds, Crooke and Despain) of
such participant’s base compensation for the relevant year. No bonuses will be payable should
performance be below 80% of the relevant goals established. In addition, the formula bonus derived
as described in the preceding sentences can be further adjusted (up or down) at the discretion of
the Board of Directors by up to one-third of the Target Bonus.

A Form 8-K will be filed to describe the goals set by the Board of Directors of the Company for the
executive officers to qualify for a bonus under the Executive IC Plan for the fiscal year ended
January 31, 2011.

 

 

Summary of 2010 Compensation of Directors

Each director of the Company who is not also an employee of the Company, except the Chairman
of the Board, receives an annual retainer of $35,000. The Chairman of the Board receives an annual
retainer of $75,000. The Chairmen of the Audit Committee and the Compensation Committee each
receive an additional retainer of $5,000 per year and the Chairman of the Nominating & Corporate
Governance Committee receives an additional retainer of $1,500 per year. All such retainers are
payable in quarterly installments. In addition, each non-employee director receives $1,000 for each board meeting he or
she attends either in person or via teleconference and each member of the Audit Committee, the
Compensation Committee and the Nominating & Corporate Governance Committee receives $1,000 for each
committee meeting he or she attends either in person or via teleconference. As an additional
component of their compensation package, all non-employee directors of the Company receive a
one-time award of an option to purchase 3,000 shares of the Company’s common stock upon becoming a
member of the Board. Each non-employee director, except the Chairman, also receives an annual
award of restricted stock, stock options, or a combination of both of the Company, whichever they
choose, with a value equal to $40,000 on the date of the award. The Chairman receives an annual
award of either restricted stock or stock options of the Company, or a combination of both,
whichever he chooses, with a value equal to $75,000 on the date of the award. The annual equity
award is made on the first day of each new fiscal year of the Company. The restricted stock is
valued based on the market price of the Company’s common stock on the day the stock is issued,
vests one year from the date of issuance, and is otherwise subject to all of the terms and
conditions of the Company’s 2006 Equity Incentive Plan, as amended (the “2006 Equity Plan”), or
such other plan under which the restricted stock may be issued. The director options have an
exercise price equal to the market price of the common stock on the day they issued, are 100%
vested upon issuance, have a ten-year life and are otherwise subject to all of the terms and
conditions of the 2006 Equity Plan or such other plan under which the options may be issued.
Directors of the Company who are also employees of the Company receive no compensation for service
to Layne Christensen as directors.Exhibit 10.57

Exhibit 10.57

INDEMNIFICATION AGREEMENT

This Indemnification Agreement, dated as of
 _____, 2010 (this “Agreement”), is made by and
between KB Home, a Delaware corporation (the “Company”), and [Indemnitee] (“Indemnitee”).

RECITALS:

	A.	 	Section 141 of the Delaware General Corporation Law provides that the business and affairs of
a corporation shall be managed by or under the direction of its board of directors.

	B.	 	Pursuant to Sections 141 and 142 of the Delaware General Corporation Law, significant
authority with respect to the management of the Company has been delegated to the officers of
the Company.

	C.	 	By virtue of the managerial prerogatives vested in the directors and officers of a Delaware
corporation, directors and officers act as fiduciaries of the corporation and its
stockholders.

	D.	 	Thus, it is critically important to the Company and its stockholders that the Company be able
to attract and retain the most capable persons reasonably available to serve as directors and
officers of the Company.

	E.	 	In recognition of the need for corporations to be able to induce capable and responsible
persons to accept positions in corporate management, Delaware law authorizes (and in some
instances requires) corporations to indemnify their directors and officers, and further
authorizes corporations to purchase and maintain insurance for the benefit of their directors
and officers.

	F.	 	The Delaware courts have recognized that indemnification by a corporation serves the dual
policies of (1) allowing corporate officials to resist unjustified lawsuits, secure in the
knowledge that, if vindicated, the corporation will bear the expense of litigation and (2)
encouraging capable women and men to serve as corporate directors and officers, secure in the
knowledge that the corporation will absorb the costs of defending their honesty and integrity.

	G.	 	The number of lawsuits challenging the judgment and actions of directors and officers of
Delaware corporations, the costs of defending those lawsuits, and the threat to directors’ and
officers’ personal assets have all materially increased over the past several years, chilling
the willingness of capable women and men to undertake the responsibilities imposed on
corporate directors and officers.

	H.	 	Recent federal legislation and rules adopted by the Securities and Exchange Commission and
the national securities exchanges have imposed additional disclosure and corporate governance
obligations on directors and officers of public companies and have exposed such directors and
officers to new and substantially broadened civil liabilities.

	I.	 	These legislative and regulatory initiatives have also exposed directors and officers of
public companies to a significantly greater risk of criminal proceedings, with attendant
defense costs and potential criminal fines and penalties.

	J.	 	Under Delaware law, a director’s or officer’s right to be reimbursed for the costs of defense
of criminal actions, whether such claims are asserted under state or federal law, does not
depend upon the merits of the claims asserted against the director or officer and is separate
and distinct from any right to indemnification the director or officer may be able to
establish, and indemnification of the director or officer against criminal fines and penalties
is permitted if the director or officer satisfies the applicable standard of conduct.

	K.	 	Indemnitee is a director and/or an officer of the Company and his/her willingness to serve in
such capacity is predicated, in substantial part, upon the Company’s willingness to indemnify
him/her in accordance with the principles reflected above, to the fullest extent permitted by
the laws of the state of Delaware, and upon the other undertakings set forth in this
Agreement.

 

 

 

	L.	 	Therefore, in recognition of the need to provide Indemnitee with substantial protection
against personal liability, in order to enhance Indemnitee’s ability to serve the Company in
an effective manner, and in order to provide such protection pursuant to express contract
rights (intended to be enforceable irrespective of, among other things, any amendment to the
Company’s certificate of incorporation or bylaws (collectively, the “Constituent Documents”),
any change in the composition of the Company’s Board of Directors (the “Board”) or any
change-in-control or business combination transaction relating to the Company), the Company
wishes to provide in this Agreement for the indemnification of and the advancement of Expenses
(as defined in Section 1(e)) to Indemnitee as set forth in this Agreement and for the
continued coverage of Indemnitee under the Company’s directors’ and officers’ liability
insurance policies.

	M.	 	In light of the considerations referred to in the preceding recitals, it is the Company’s
intention and desire that the provisions of this Agreement be construed liberally, subject to
their express terms, to maximize the protections to be provided to Indemnitee hereunder.

AGREEMENT:

NOW, THEREFORE, the parties hereby agree as follows:

1. Certain Definitions. In addition to terms defined elsewhere herein, the following terms have
the following meanings when used in this Agreement with initial capital letters:

(a) A “Change in Control” means the occurrence after the date of this Agreement of any of the
following: (i) any one person, or more than one person acting as a group, acquires ownership of
stock of the Company that, together with stock held by such person or group, constitutes more than
50% of the total fair market value or total voting power of the stock of the Company, as determined
in accordance with Section 1.409A-3(i)(5)(v) of the Treasury Regulations; provided, that if a
person or group is considered either to own more than 50% of the total fair market value or total
voting power of the stock of the Company, or to own more than the market value or total voting
power specified in clause (ii) below, and such person or group acquires additional stock of the
Company, the acquisition of additional stock by such person or group shall not be considered to
cause a “Change in Control;” (ii) 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 Company possessing 30% or more of
the total voting power of the stock of the Company, as determined in accordance with Section
1.409A-3(i)(5)(vi) of the Treasury Regulations; provided, that if a person or group is considered
to possess 30% or more of the total voting power of the stock of the Company, and such person or
group acquires additional stock of the Company, the acquisition of additional stock by such person
or group shall not be considered to cause a “Change in Control;” (iii) a majority of the members of
the Board is replaced during any 12-month period by directors whose appointment or election is not
endorsed by a majority of the members of the Board before the date of the appointment or election,
as determined in accordance with Section 1.409A-3(i)(5)(vi) of the Treasury Regulations; or (iv)
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 Company 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 Company immediately before such acquisition or
acquisitions, as determined in accordance with Section 1.409A-3(i)(5)(vii) of the Treasury
Regulations; provided, that a transfer of assets shall not be treated as a “Change in Control” when
such transfer is made to an entity that is controlled by the stockholders of the Company, as
determined in accordance with Section 1.409A-3(i)(5)(vii)(B) of the Treasury Regulations.

(b) “Claim” means (i) any threatened, asserted, pending or completed claim, demand, action,
suit or proceeding, whether civil, criminal, administrative, arbitrative, investigative or other,
and whether made pursuant to federal, state or other law; and (ii) any threatened, pending or
completed inquiry or investigation, whether made, instituted or conducted by the Company or any
other person, including without limitation any federal, state or other governmental entity, that
Indemnitee determines might lead to the institution of any such claim, demand, action, suit or
proceeding.

(c) “Controlled Affiliate” means any corporation, limited liability company, partnership,
joint venture, trust or other entity or enterprise, whether or not for profit, that is directly or
indirectly controlled by the Company. For purposes of this definition, “control” means the
possession, directly or indirectly, of the power to direct or cause the direction of the management
or policies of an entity or enterprise, whether through the ownership of voting securities, through
other voting rights, by contract or otherwise; provided that direct or indirect beneficial
ownership of capital stock or other interests in an entity or enterprise entitling the holder to
cast 20% or more of the total
number of votes generally entitled to be cast in the election of directors (or persons
performing comparable functions) of such entity or enterprise shall be deemed to constitute control
for purposes of this definition.

 

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(d) “Disinterested Director” means a director of the Company who is not and was not a party to
the Claim in respect of which indemnification is sought by Indemnitee.

(e) “Expenses” means attorneys’ and experts’ fees and expenses and all other costs and
expenses paid or payable in connection with investigating, defending, being a witness in or
participating in (including on appeal), or preparing to investigate, defend, be a witness in or
participate in (including on appeal), any Claim.

(f) “Incumbent Directors” means the individuals who, as of the date hereof, are Directors of
the Company and any individual becoming a Director subsequent to the date hereof whose election,
nomination for election by the Company’s stockholders, or appointment, was approved by a vote of at
least two-thirds of the then Incumbent Directors (either by a specific vote or by approval of the
proxy statement of the Company in which such person is named as a nominee for director, without
objection to such nomination); provided, however, that an individual shall not be an Incumbent
Director if such individual’s election or appointment to the Board occurs as a result of an actual
or threatened election contest (as described in Rule 14a-12(c) of the Exchange Act) with respect to
the election or removal of Directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board.

(g) “Indemnifiable Claim” means any Claim based upon, arising out of or resulting from (i) any
actual, alleged or suspected act or failure to act by Indemnitee in his or her capacity as a
director, officer, employee or agent of the Company or as a director, officer, employee, member,
manager, trustee or agent of any other corporation, limited liability company, partnership, joint
venture, trust or other entity or enterprise, whether or not for profit, as to which Indemnitee is
or was serving at the request of the Company as a director, officer, employee, member, manager,
trustee or agent, (ii) any actual, alleged or suspected act or failure to act by Indemnitee in
respect of any business, transaction, communication, filing, disclosure or other activity of the
Company or any other entity or enterprise referred to in clause (i) of this sentence, or (iii)
Indemnitee’s status as a current or former director, officer, employee or agent of the Company or
as a current or former director, officer, employee, member, manager, trustee or agent of the
Company or any other entity or enterprise referred to in clause (i) of this sentence or any actual,
alleged or suspected act or failure to act by Indemnitee in connection with any obligation or
restriction imposed upon Indemnitee by reason of such status. In addition to any service at the
actual request of the Company, for purposes of this Agreement, Indemnitee shall be deemed to be
serving or to have served at the request of the Company as a director, officer, employee, member,
manager, trustee or agent of another entity or enterprise if Indemnitee is or was serving as a
director, officer, employee, member, manager, trustee or agent of such entity or enterprise and (i)
such entity or enterprise is or at the time of such service was a Controlled Affiliate, (ii) such
entity or enterprise is or at the time of such service was an employee benefit plan (or related
trust) sponsored or maintained by the Company or a Controlled Affiliate, or (iii) the Company or a
Controlled Affiliate directly or indirectly caused or authorized Indemnitee to be nominated,
elected, appointed, designated, employed, engaged or selected to serve in such capacity.

(h) “Indemnifiable Losses” means any and all Losses relating to, arising out of or resulting
from any Indemnifiable Claim.

(i) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in
matters of corporation law and neither presently is, nor in the past five years has been, retained
to represent: (i) the Company (or any entity in which the Company directly or indirectly
beneficially owns 50% or more of the outstanding securities entitled to vote generally in the
election of directors (or similar governing bodies)) or Indemnitee in any matter material to either
such party (other than with respect to matters concerning the Indemnitee under this Agreement, or
of other indemnitees under similar indemnification agreements), or (ii) any other named (or, as to
a threatened matter, reasonably likely to be named) party to the Indemnifiable Claim giving rise to
a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent
Counsel” shall not include any person who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in representing either the Company or Indemnitee
in an action to determine Indemnitee’s rights under this Agreement.

(j) “Losses” means any and all Expenses, damages, losses, liabilities, judgments, fines,
penalties (whether civil, criminal or other) and amounts paid in settlement, including without
limitation all interest, assessments and other charges paid or payable in connection with or in
respect of any of the foregoing.

 

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2. Indemnification Obligation. Subject to Section 7, the Company shall indemnify, defend and hold
harmless Indemnitee, to the fullest extent permitted or required by the laws of the State of
Delaware in effect on the date hereof or as such laws may from time to time hereafter be amended to
increase the scope of such permitted indemnification, against any and all Indemnifiable Claims and
Indemnifiable Losses; provided, however, that, except as provided in Sections 4 and 20, Indemnitee
shall not be entitled to indemnification pursuant to this Agreement in connection with any Claim
initiated by Indemnitee against the Company or any director or officer of the Company unless the
Company has joined in or consented to the initiation of such Claim.

3. Advancement of Expenses. Indemnitee shall have the right to advancement by the Company prior to
the final disposition of any Indemnifiable Claim of any and all Expenses relating to, arising out
of or resulting from any Indemnifiable Claim paid or incurred by Indemnitee or which Indemnitee
determines are reasonably likely to be paid or incurred by Indemnitee. Indemnitee’s right to such
advancement is not subject to the satisfaction of any standard of conduct. Without limiting the
generality or effect of the foregoing, within five business days after any request by Indemnitee,
the Company shall, in accordance with such request (but without duplication), (a) pay such Expenses
on behalf of Indemnitee, (b) advance to Indemnitee funds in an amount sufficient to pay such
Expenses, or (c) reimburse Indemnitee for such Expenses; provided that Indemnitee shall repay,
without interest any amounts actually advanced to Indemnitee that, at the final disposition of the
Indemnifiable Claim to which the advance related, were in excess of amounts paid or payable by
Indemnitee in respect of Expenses relating to, arising out of or resulting from such Indemnifiable
Claim. In connection with any such payment, advancement or reimbursement, Indemnitee shall execute
and deliver to the Company an undertaking in the form attached hereto as Exhibit A (subject
to Indemnitee filling in the blanks therein and selecting from among the bracketed alternatives
therein), which need not be secured and shall be accepted without reference to Indemnitee’s ability
to repay the Expenses. In no event shall Indemnitee’s right to the payment, advancement or
reimbursement of Expenses pursuant to this Section 3 be conditioned upon any undertaking that is
less favorable to Indemnitee than, or that is in addition to, the undertaking set forth in
Exhibit A.

4. Indemnification for Additional Expenses. Without limiting the generality or effect of the
foregoing, the Company shall indemnify and hold harmless Indemnitee against and, if requested by
Indemnitee, shall reimburse Indemnitee for, or advance to Indemnitee, within five business days of
such request, any and all Expenses paid or incurred by Indemnitee or which Indemnitee determines
are reasonably likely to be paid or incurred by Indemnitee in connection with any Claim made,
instituted or conducted by Indemnitee for (a) indemnification or payment, advancement or
reimbursement of Expenses by the Company under any provision of this Agreement, or under any other
agreement or provision of the Constituent Documents now or hereafter in effect relating to
Indemnifiable Claims, and/or (b) recovery under any directors’ and officers’ liability insurance
policies maintained by the Company, regardless in each case of whether Indemnitee ultimately is
determined to be entitled to such indemnification, reimbursement, advance or insurance recovery, as
the case may be; provided, however, that Indemnitee shall return, without interest, any such
advance of Expenses (or portion thereof) which remains unspent at the final disposition of the
Claim to which the advance related.

5. Partial Indemnity. If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of any Indemnifiable Loss, but not for all of
the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion
thereof to which Indemnitee is entitled.

6. Procedure for Notification. To obtain indemnification under this Agreement in respect of an
Indemnifiable Claim or Indemnifiable Loss, Indemnitee shall submit to the Company a written request
therefor, including a brief description (based upon information then available to Indemnitee) of
such Indemnifiable Claim or Indemnifiable Loss. If, at the time of the receipt of such request,
the Company has directors’ and officers’ liability insurance in effect under which coverage for
such Indemnifiable Claim or Indemnifiable Loss is potentially available, the Company shall give
prompt written notice of such Indemnifiable Claim or Indemnifiable Loss to the applicable insurers
in accordance with the procedures set forth in the applicable policies. The Company shall provide
to Indemnitee a copy of such notice delivered to the applicable insurers, and copies of all
subsequent correspondence between the Company and such insurers regarding the Indemnifiable Claim
or Indemnifiable Loss, in each case substantially concurrently with the delivery or receipt thereof
by the Company. The failure by Indemnitee to timely notify the Company of any Indemnifiable Claim
or Indemnifiable Loss shall not relieve the Company from any liability hereunder unless, and only
to the extent that, the Company did not otherwise learn of such Indemnifiable Claim or
Indemnifiable Loss and such failure results in forfeiture by the Company of substantial defenses,
rights or insurance coverage.

 

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7. Determination of Right to Indemnification.

(a) To the extent that Indemnitee shall have been successful on the merits or otherwise in
defense of any Indemnifiable Claim or any portion thereof or in defense of any issue or matter
therein, including without limitation dismissal without prejudice, Indemnitee shall be indemnified
against all Indemnifiable Losses relating to, arising out of or resulting from such Indemnifiable
Claim in accordance with Section 2 and no Standard of Conduct Determination (as defined in Section
7(b)) shall be required.

(b) To the extent that the provisions of Section 7(a) are inapplicable to an Indemnifiable
Claim that shall have been finally disposed of, any determination of whether Indemnitee has
satisfied any applicable standard of conduct under Delaware law that is a legally required
condition precedent to indemnification of Indemnitee hereunder against Indemnifiable Losses
relating to, arising out of or resulting from such Indemnifiable Claim (a “Standard of Conduct
Determination”) shall be made as follows: (i) if a Change in Control shall not have occurred, or
if a Change in Control shall have occurred but Indemnitee shall have requested that the Standard of
Conduct Determination be made pursuant to this clause (i), (A) by a majority vote of the
Disinterested Directors, even if less than a quorum of the Board, (B) if such Disinterested
Directors so direct, by a majority vote of a committee of Disinterested Directors designated by a
majority vote of all Disinterested Directors, or (C) if there are no such Disinterested Directors,
by Independent Counsel in a written opinion addressed to the Board, a copy of which shall be
delivered to Indemnitee; and (ii) if a Change in Control shall have occurred and Indemnitee shall
not have requested that the Standard of Conduct Determination be made pursuant to clause (i), by
Independent Counsel in a written opinion addressed to the Board, a copy of which shall be delivered
to Indemnitee. Indemnitee will cooperate with the person or persons making such Standard of
Conduct Determination, including providing to such person or persons, upon reasonable advance
request, any documentation or information which is not privileged or otherwise protected from
disclosure and which is reasonably available to Indemnitee and reasonably necessary to such
determination. The Company shall indemnify and hold harmless Indemnitee against and, if requested
by Indemnitee, shall reimburse Indemnitee for, or advance to Indemnitee, within five business days
of such request, any and all costs and expenses (including attorneys’ and experts’ fees and
expenses) incurred by Indemnitee in so cooperating with the person or persons making such Standard
of Conduct Determination.

(c) The Company shall use its reasonable best efforts to cause any Standard of Conduct
Determination required under Section 7(b) to be made as promptly as practicable. If (i) the person
or persons empowered or selected under Section 7 to make the Standard of Conduct Determination
shall not have made a determination within 30 days after the later of (A) receipt by the Company of
written notice from Indemnitee advising the Company of the final disposition of the applicable
Indemnifiable Claim (the date of such receipt being the “Notification Date”) and (B) the selection
of an Independent Counsel, if such determination is to be made by Independent Counsel, that is
permitted under the provisions of Section 7(e) to make such determination and (ii) Indemnitee shall
have fulfilled his/her obligations set forth in the second sentence of Section 7(b), then
Indemnitee shall be deemed to have satisfied the applicable standard of conduct; provided that such
30-day period may be extended for a reasonable time, not to exceed an additional 30 days, if the
person or persons making such determination in good faith requires such additional time for the
obtaining or evaluation or documentation and/or information relating thereto.

(d) If (i) Indemnitee shall be entitled to indemnification hereunder against any Indemnifiable
Losses pursuant to Section 7(a), (ii) no determination of whether Indemnitee has satisfied any
applicable standard of conduct under Delaware law is a legally required condition precedent to
indemnification of Indemnitee hereunder against any Indemnifiable Losses, or (iii) Indemnitee has
been determined or deemed pursuant to Section 7(b) or (c) to have satisfied any applicable standard
of conduct under Delaware law which is a legally required condition precedent to indemnification of
Indemnitee hereunder against any Indemnifiable Losses, then the Company shall pay to Indemnitee,
within five business days after the later of (x) the Notification Date in respect of the
Indemnifiable Claim or portion thereof to which such Indemnifiable Losses are related, out of which
such Indemnifiable Losses arose or from which such Indemnifiable Losses resulted and (y) the
earliest date on which the applicable criterion specified in clause (i), (ii) or (iii) above shall
have been satisfied, an amount equal to the amount of such Indemnifiable Losses.

 

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(e) If a Standard of Conduct Determination is to be made by Independent Counsel pursuant to
Section 7(b)(i), the Independent Counsel shall be selected by the Board of Directors, and the
Company shall give written notice to Indemnitee advising him or her of the identity of the
Independent Counsel so selected. If a Standard of Conduct Determination is to be made by
Independent Counsel pursuant to Section 7(b)(ii), the Independent Counsel shall be selected by
Indemnitee, and Indemnitee shall give written notice to the Company advising it of the identity of
the Independent Counsel so selected. In either case, Indemnitee or the Company, as applicable,
may, within five business days after receiving written notice of selection from the other, deliver
to the other a written objection to such selection; provided, however, that such objection may be
asserted only on the ground that the Independent Counsel so selected does not satisfy the criteria
set forth in the definition of “Independent Counsel” in Section 1(h), and the objection shall set
forth with particularity the factual basis of such assertion. Absent a proper and timely
objection, the person or firm so selected shall act as Independent Counsel. If such written
objection is properly and timely made and substantiated, (i) the Independent Counsel so selected
may not serve as Independent Counsel unless and until such objection is withdrawn or a court has
determined that such objection is without merit and (ii) the non-objecting party may, at its
option, select an alternative Independent Counsel and give written notice to the other party
advising such other party of the identity of the alternative Independent Counsel so selected, in
which case the provisions of the two immediately preceding sentences and clause (i) of this
sentence shall apply to such subsequent selection and notice. If applicable, the provisions of
clause (ii) of the immediately preceding sentence shall apply to successive alternative selections.
If no Independent Counsel that is permitted under the foregoing provisions of this Section 7(e) to
make the Standard of Conduct Determination shall have been selected within 30 days after the
Company gives its initial notice pursuant to the first sentence of this Section 7(e) or Indemnitee
gives its initial notice pursuant to the second sentence of this Section 7(e), as the case may be,
either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware for
resolution of any objection which shall have been made by the Company or Indemnitee to the other’s
selection of Independent Counsel and/or for the appointment as Independent Counsel of a person or
firm selected by the Court or by such other person as the Court shall designate, and the person or
firm with respect to whom all objections are so resolved or the person or firm so appointed will
act as Independent Counsel. In all events, the Company shall pay all of the reasonable fees and
expenses of the Independent Counsel incurred in connection with the Independent Counsel’s
determination pursuant to Section 7(b).

8. Presumption of Entitlement. In making any Standard of Conduct Determination, the person or
persons making such determination shall presume that Indemnitee has satisfied the applicable
standard of conduct, and the Company may overcome such presumption only by its adducing clear and
convincing evidence to the contrary. Any Standard of Conduct Determination that is adverse to
Indemnitee may be challenged by the Indemnitee in the Court of Chancery of the State of Delaware.
No determination by the Company (including by its directors or any Independent Counsel) that
Indemnitee has not satisfied any applicable standard of conduct shall be a defense to any Claim by
Indemnitee for indemnification or reimbursement or advance payment of Expenses by the Company
hereunder or create a presumption that Indemnitee has not met any applicable standard of conduct.

9. No Other Presumption. For purposes of this Agreement, the termination of any Claim by judgment,
order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo
contendere or its equivalent, will not create a presumption that Indemnitee did not meet any
applicable standard of conduct or that indemnification hereunder is otherwise not permitted.

10. Non-Exclusivity. The rights of Indemnitee hereunder will be in addition to any other rights
Indemnitee may have under the Constituent Documents, or the substantive laws of the Company’s
jurisdiction of incorporation, any other contract or otherwise (collectively, “Other Indemnity
Provisions”); provided, however, that (a) to the extent that Indemnitee otherwise would have any
greater right to indemnification under any Other Indemnity Provision, Indemnitee will be deemed to
have such greater right hereunder and (b) to the extent that any change is made to any Other
Indemnity Provision which permits any greater right to indemnification than that provided under
this Agreement as of the date hereof, Indemnitee will be deemed to have such greater right
hereunder. The Company will not adopt any amendment to any of the Constituent Documents the effect
of which would be to deny, diminish or encumber Indemnitee’s right to indemnification under this
Agreement or any Other Indemnity Provision.

 

6

 

11. Liability Insurance and Funding. For the duration of Indemnitee’s service as a director and/or
officer of the Company, and thereafter for so long as Indemnitee shall be subject to any pending or
possible Indemnifiable Claim, the Company shall use commercially reasonable efforts (taking into
account the scope and amount of coverage available relative to the cost thereof) to cause to be
maintained in effect policies of directors’ and officers’ liability insurance providing coverage
for directors and/or officers of the Company that is at least substantially comparable in scope and
amount to that provided by the Company’s current policies of directors’ and officers’ liability
insurance. The Company shall provide Indemnitee with a copy of all directors’ and officers’
liability insurance applications, binders, policies, declarations, endorsements and other related
materials, and shall provide Indemnitee with a reasonable opportunity to review and comment on the
same. Without limiting the generality or effect of the two immediately preceding sentences, the
Company shall not discontinue or significantly reduce the scope or amount of
coverage from one policy period to the next (i) without the prior approval thereof by a majority
vote of the Incumbent Directors, even if less than a quorum, or (ii) if at the time that any such
discontinuation or significant reduction in the scope or amount of coverage is proposed there are
no Incumbent Directors, without the prior written consent of Indemnitee (which consent shall not be
unreasonably withheld or delayed). In all policies of directors’ and officers’ liability insurance
obtained by the Company, Indemnitee shall be named as an insured in such a manner as to provide
Indemnitee the same rights and benefits, subject to the same limitations, as are accorded to the
Company’s directors and officers most favorably insured by such policy. The Company may, but shall
not be required to, create a trust fund, grant a security interest or use other means, including
without limitation a letter of credit, to ensure the payment of such amounts as may be necessary to
satisfy its obligations to indemnify and advance expenses pursuant to this Agreement.

12. Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to
the extent of such payment to all of the related rights of recovery of Indemnitee against other
persons or entities (other than Indemnitee’s successors), including any entity or enterprise
referred to in clause (i) of the definition of “Indemnifiable Claim” in Section 1(f). Indemnitee
shall execute all papers reasonably required to evidence such rights (all of Indemnitee’s
reasonable Expenses, including attorneys’ fees and charges, related thereto to be reimbursed by or,
at the option of Indemnitee, advanced by the Company).

13. No Duplication of Payments. The Company shall not be liable under this Agreement to make any
payment to Indemnitee in respect of any Indemnifiable Losses to the extent Indemnitee has otherwise
actually received payment (net of Expenses incurred in connection therewith) under any insurance
policy, the Constituent Documents and Other Indemnity Provisions or otherwise (including from any
entity or enterprise referred to in clause (i) of the definition of “Indemnifiable Claim” in
Section 1(f)) in respect of such Indemnifiable Losses otherwise indemnifiable hereunder.

14. Defense of Claims. The Company shall be entitled to participate in the defense of any
Indemnifiable Claim or to assume the defense thereof, with counsel reasonably satisfactory to the
Indemnitee; provided that if Indemnitee believes, after consultation with counsel selected by
Indemnitee, that (a) the use of counsel chosen by the Company to represent Indemnitee would present
such counsel with an actual or potential conflict, (b) the named parties in any such Indemnifiable
Claim (including any impleaded parties) include both the Company and Indemnitee and Indemnitee
shall conclude that there may be one or more legal defenses available to him or her that are
different from or in addition to those available to the Company, or (c) any such representation by
such counsel would be precluded under the applicable standards of professional conduct then
prevailing, then Indemnitee shall be entitled to retain separate counsel (but not more than one law
firm plus, if applicable, local counsel in respect of any particular Indemnifiable Claim) at the
Company’s expense. The Company shall not be liable to Indemnitee under this Agreement for any
amounts paid in settlement of any threatened or pending Indemnifiable Claim effected without the
Company’s prior written consent. The Company shall not, without the prior written consent of the
Indemnitee, effect any settlement of any threatened or pending Indemnifiable Claim to which the
Indemnitee is, or could have been, a party unless such settlement solely involves the payment of
money and includes a complete and unconditional release of the Indemnitee from all liability on any
claims that are the subject matter of such Indemnifiable Claim. Neither the Company nor Indemnitee
shall unreasonably withhold its consent to any proposed settlement; provided that Indemnitee may
withhold consent to any settlement that does not provide a complete and unconditional release of
Indemnitee.

15. Successors and Binding Agreement. (a) The Company shall require any successor (whether direct
or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or
substantially all of the business or assets of the Company, by agreement in form and substance
satisfactory to Indemnitee and his or her counsel, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent the Company would be required to perform if no
such succession had taken place. This Agreement shall be binding upon and inure to the benefit of
the Company and any successor to the Company, including without limitation any person acquiring
directly or indirectly all or substantially all of the business or assets of the Company whether by
purchase, merger, consolidation, reorganization or otherwise (and such successor will thereafter be
deemed the “Company” for purposes of this Agreement), but shall not otherwise be assignable or
delegatable by the Company.

 

7

 

(b) This Agreement shall inure to the benefit of and be enforceable by the Indemnitee’s
personal or legal representatives, executors, administrators, heirs, distributees, legatees and
other successors.

(c) This Agreement is personal in nature and neither of the parties hereto shall, without the
consent of the other, assign or delegate this Agreement or any rights or obligations hereunder
except as expressly provided in Sections 15(a) and 15(b). Without limiting the generality or
effect of the foregoing, Indemnitee’s right to receive payments hereunder shall not be assignable,
whether by pledge, creation of a security interest or otherwise, other than by a transfer by the
Indemnitee’s will or by the laws of descent and distribution, and, in the event of any attempted
assignment or transfer contrary to this Section 15(c), the Company shall have no liability to pay
any amount so attempted to be assigned or transferred.

16. Notices. For all purposes of this Agreement, all communications, including without limitation
notices, consents, requests or approvals, required or permitted to be given hereunder shall be in
writing and shall be deemed to have been duly given when hand delivered or dispatched by electronic
facsimile transmission (with receipt thereof orally confirmed), or five business days after having
been mailed by United States registered or certified mail, return receipt requested, postage
prepaid or one business day after having been sent for next-day delivery by a nationally recognized
overnight courier service, addressed to the Company (to the attention of the Secretary of the
Company) and to Indemnitee at the applicable address shown on the signature page hereto, or to such
other address as any party may have furnished to the other in writing and in accordance herewith,
except that notices of changes of address will be effective only upon receipt.

17. Governing Law. The validity, interpretation, construction and performance of this Agreement
shall be governed by and construed in accordance with the substantive laws of the State of
Delaware, without giving effect to the principles of conflict of laws of such State. The Company
and Indemnitee each hereby irrevocably consent to the jurisdiction of the Chancery Court of the
State of Delaware for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this Agreement shall be
brought only in the Chancery Court of the State of Delaware.

18. Validity. If any provision of this Agreement or the application of any provision hereof to any
person or circumstance is held invalid, unenforceable or otherwise illegal, the remainder of this
Agreement and the application of such provision to any other person or circumstance shall not be
affected, and the provision so held to be invalid, unenforceable or otherwise illegal shall be
reformed to the extent, and only to the extent, necessary to make it enforceable, valid or legal.
In the event that any court or other adjudicative body shall decline to reform any provision of
this Agreement held to be invalid, unenforceable or otherwise illegal as contemplated by the
immediately preceding sentence, the parties thereto shall take all such action as may be necessary
or appropriate to replace the provision so held to be invalid, unenforceable or otherwise illegal
with one or more alternative provisions that effectuate the purpose and intent of the original
provisions of this Agreement as fully as possible without being invalid, unenforceable or otherwise
illegal.

19. Miscellaneous. No provision of this Agreement may be waived, modified or discharged unless
such waiver, modification or discharge is agreed to in writing signed by Indemnitee and the
Company. No waiver by either party hereto at any time of any breach by the other party hereto or
compliance with any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise, expressed or
implied with respect to the subject matter hereof have been made by either party that are not set
forth expressly in this Agreement. References to Sections are to references to Sections of this
Agreement.

 

8

 

20. Legal Fees and Expenses. It is the intent of the Company that Indemnitee not be required to
incur legal fees and or other Expenses associated with the interpretation, enforcement or defense
of Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and expense
thereof would substantially detract from the benefits intended to be extended to Indemnitee
hereunder. Accordingly, without limiting the generality or effect of any other provision hereof,
if it should appear to Indemnitee that the Company has failed to comply with any of its obligations
under this Agreement (including its obligations under Section 3) or in the event that the Company
or any other person takes or threatens to take any action to declare this Agreement void or
unenforceable, or institutes any litigation or other action or proceeding designed to deny, or to
recover from, Indemnitee the benefits provided or intended to be provided to Indemnitee hereunder,
the Company irrevocably authorizes the Indemnitee from time to time to retain counsel of
Indemnitee’s choice, at the expense of the Company as hereafter provided, to advise and represent
Indemnitee in connection with any such interpretation, enforcement or defense, including without
limitation the initiation or defense of any litigation or other legal action, whether by or against
the Company or any
director, officer, stockholder or other person affiliated with the Company, in any jurisdiction.
Notwithstanding any existing or prior attorney-client relationship between the Company and such
counsel, the Company irrevocably consents to Indemnitee’s entering into an attorney-client
relationship with such counsel, and in that connection the Company and Indemnitee agree that a
confidential relationship shall exist between Indemnitee and such counsel. Without respect to
whether Indemnitee prevails, in whole or in part, in connection with any of the foregoing, the
Company will pay and be solely financially responsible for any and all attorneys’ and related fees
and expenses incurred by Indemnitee in connection with any of the foregoing.

21. Certain Interpretive Matters. Unless the context of this Agreement otherwise requires, (a)
“it” or “its” or words of any gender include each other gender, (b) words using the singular or
plural number also include the plural or singular number, respectively, (c) the terms “hereof,”
“herein,” “hereby” and derivative or similar words refer to this entire Agreement, (d) the terms
“Article,” “Section,” “Annex” or “Exhibit” refer to the specified Article, Section, Annex or
Exhibit of or to this Agreement, (e) the terms “include,” “includes” and “including” will be deemed
to be followed by the words “without limitation” (whether or not so expressed), and (f) the word
“or” is disjunctive but not exclusive. Whenever this Agreement refers to a number of days, such
number will refer to calendar days unless business days are specified and whenever action must be
taken (including the giving of notice or the delivery of documents) under this Agreement during a
certain period of time or by a particular date that ends or occurs on a non-business day, then such
period or date will be extended until the immediately following business day. As used herein,
“business day” means any day other than Saturday, Sunday or a United States federal holiday.

22. Counterparts. This Agreement may be executed in one or more counterparts, each of which will
be deemed to be an original but all of which together shall constitute one and the same agreement.

[Signatures Appear On Following Page]

 

9

 

IN WITNESS WHEREOF, Indemnitee has executed and the Company has caused its duly authorized
representative to execute this Agreement as of the date first above written.

	 	 	 	 	 
	 	KB HOME

10990 Wilshire Boulevard

Los Angeles, California 90024

 	 
	 	By:  	

 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[INDEMNITEE]

[Address]

 	 
	 	 	 
	 	[Indemnitee] 	 
	 	 	 	 
	 

 

10

 

EXHIBIT A

UNDERTAKING

This Undertaking is submitted pursuant to the Indemnification Agreement, dated as of

 _____, 2010 (the “Indemnification Agreement”), between KB Home, a Delaware corporation
(the “Company”), and the undersigned. Capitalized terms used and not otherwise defined herein have
the meanings ascribed to such terms in the Indemnification Agreement.

The undersigned hereby requests [payment], [advancement], [reimbursement] by the Company of
Expenses which the undersigned [has incurred] [reasonably expects to incur] in connection with

 _____ 

(the “Indemnifiable Claim”).

The undersigned hereby undertakes to repay the [payment], [advancement], [reimbursement] of
Expenses made by the Company to or on behalf of the undersigned in response to the foregoing
request if it is determined, following the final disposition of the Indemnifiable Claim and in
accordance with Section 7 of the Indemnification Agreement, that the undersigned is not entitled to
indemnification by the Company under the Indemnification Agreement with respect to the
Indemnifiable Claim.

IN WITNESS WHEREOF, the undersigned has executed this Undertaking as of this
 _____ 

day of

 _____,
 _____.

	 	 	 	 	 
	 	 	 
	 	  	
 	 
	 	 	[Indemnitee]

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