Document:

exv10w37

 

Exhibit 10.37

KB HOME

PHANTOM SHARE BONUS AGREEMENT FOR NON-SENIOR MANAGEMENT

     This Phantom Share Bonus Agreement for Non-Senior Management (this “Agreement”) is made
on July 12, 2007 (the “Grant Date”) between KB Home, a Delaware corporation (the “Company”), and
[NAME] (the “Employee”).

     WHEREAS, the Company desires to grant the Employee a Phantom Shares Bonus (the “Bonus”);

     WHEREAS, the Bonus is a cash-based award designed to promote the interests of the Company and
its stockholders by retaining exceptional employees;

     WHEREAS, the Bonus is intended to constitute compensation that is payable within the
“short-term deferral” period after the Rights (as defined below) are no longer subject to a
“substantial risk of forfeiture” and that does not provide for the deferral of compensation under,
and is therefore exempt from, Section 409A of the Internal Revenue Code of 1986, as amended from
time to time (the “Code”); and

     WHEREAS, the Bonus and Rights granted hereunder are not being issued pursuant to any stock
plan, including the KB Home Amended and Restated 1999 Incentive Plan (the “Plan”).

     NOW, THEREFORE, in consideration of the foregoing, the Company and the Employee enter into
this Agreement as follows:

A G R E E M E N T

     1. Grant. Subject to the terms of this Agreement, the Company hereby grants to the
Employee a Bonus calculated by reference to an aggregate of [# RIGHTS] phantom share rights (the
“Rights”). Each Right, when fully vested hereunder, will represent the economic equivalent of
ownership of one share of common stock, $1.00 par value per share, of the Company (“Common Stock”);
provided that the Rights will not entitle the Employee to, and the Employee will not have any
rights in, or own any, shares of Common Stock. The Bonus is intended to constitute compensation
that is payable within the “short-term deferral” period after the Rights are no longer subject to a
“substantial risk of forfeiture” under Section 409A of the Code.

     2. Rights Vesting.

	 	(a)	 	Normal Rights Vesting. 100% of the Rights granted under
this Agreement will vest on July 12, 2010 if the Employee is employed by the
Company or any “subsidiary corporation” as defined in Section 424(f) of the Code
and any applicable regulations promulgated thereunder or any other entity of
which a majority of the outstanding voting stock or voting power is beneficially
owned directly or indirectly by the Company (each, a “Subsidiary”) on such date.
	 
	 	(b)	 	Change of Ownership. Notwithstanding the foregoing and
subject to Section 3, the Rights will vest as to 100% of the Rights granted
under this Agreement upon a Change of Ownership of the Company. For purposes of
this Agreement, “Change of Ownership” shall have the meaning given that term in
the Plan.

     3. Forfeiture. Subject to Section 2(a), the Employee will immediately forfeit all
rights, title and interests in and to any and all Rights that have not vested on the date the
Employee’s employment with the Company or its Subsidiaries is terminated.

 

 

     4. Payment. As soon as reasonably practicable following the date of vesting of the
Rights in accordance with Section 2 above (the “Vesting Date”), but in no event later than the
later of (i) the fifteenth day of the third month following the Employee’s first taxable year in
which the Vesting Date occurs or (ii) the fifteenth day of the third month following the end of the
Company’s first taxable year in which the Vesting Date occurs, the Company will pay to the Employee
for each vested Right an amount in cash equal to the Fair Market Value of one share of Common Stock
as of the Vesting Date. For purposes of this Agreement, “Fair Market Value” shall have the meaning
given that term in the Plan. The Company has the authority to deduct or withhold an amount
sufficient to satisfy applicable federal, state, local and foreign taxes (including the Employee’s
FICA obligation) required by law to be withheld with respect to any taxable event arising from the
vesting of any Rights or payment of any portion of the Bonus.

     5. No Stockholder Rights. The Employee will not be deemed to be a holder of or
possess any stockholder rights with respect to any shares of Common Stock in connection with the
Rights granted hereunder.

     6. Dividends. Cash dividends or other distributions paid in respect of shares of
Common Stock will be equally and contemporaneously credited to the Employee’s account in the
Company’s books and records in respect of the Rights, and will be paid to the Employee in
accordance with the same terms and conditions of Section 4 above that apply to the payment of the
Bonus.

     7. Adjustments. In the event of any of the transactions described in Section 13(a) of
the Plan, the Management Development and Compensation Committee (the “MDCC”) of the Company shall
be permitted to adjust or revise the Awards in the same manner as it then adjusts any similar
awards under the Plan.

     8. California Law. This Agreement will be construed, administered and enforced in
accordance with the laws of the State of California. This Agreement, the Bonus and the Rights will
be subject to rescission by the Company if an executed original of this Agreement is not received
by the Company within four weeks of the Grant Date.

     9. Entire Agreement. This Agreement sets forth the entire agreement and understanding
of the parties with respect to the subject matter of this Agreement, and supersedes all prior and
contemporaneous oral and written agreements and understandings relating to such subject matter.

     10. Non-Transferability. Neither this Agreement nor the Bonus or Rights may be
assigned by Employee by operation of law or otherwise. Any purported assignment by Employee shall
by null and void. This Agreement shall, however, be binding upon the successors and assigns of the
Company.

     11. No Obligation. Neither the execution and delivery hereof nor the granting of the
Bonus or the Rights will constitute or be evidence of any agreement or understanding, express or
implied, on the part of the Company or any of its Subsidiaries to employ or continue the employment
of the Employee for any period or in any capacity.

     12. Notice. Any notice given hereunder to the Company will be addressed to the
Company, attention Senior Vice President, Human Resources, or a designee thereof, and any notice
given hereunder to the Employee will be addressed to the Employee at his or her address as shown on
the records of the Company.

     13. Amendment and Cancellation. Subject to Sections 7 and 15 hereof, at any time and
from time to time, the MDCC may terminate, amend or modify this Agreement. Except with respect to

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amendments made pursuant to Section 7 or 15 hereof, no termination, amendment, or modification
of this Agreement will adversely affect in any material way the Bonus or the Rights granted
hereunder without the prior written consent of the Employee.

     14. General Provisions.

	 	(a)	 	Severability. If any provision of this Agreement is or
becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction, or would disqualify the Bonus or the Rights under any law deemed
applicable by the MDCC, such provision will be construed or deemed amended to
conform the applicable laws, or if it cannot be construed or deemed amended
without, in the determination of the MDCC, materially altering the intent of this
Agreement, such provision will be stricken as to such jurisdiction, and the
remainder of this Agreement will remain in full force and effect.
	 
	 	(b)	 	Other Laws. The obligation of the Company to make payment
of the Bonus will be subject to all applicable laws, rules, and regulations, and
to such approvals by government agencies as may be required. The Company may
refuse to transfer any consideration under this Agreement if, acting in its sole
discretion, it determines that the issuance or transfer of such consideration
might violate any applicable law or regulation or entitle the Company to recover
the same under Section 16(b) of the Exchange Act.
	 
	 	(c)	 	No Trust or Fund Created. This Agreement is intended to be
an “unfunded” plan for incentive compensation. This Agreement will neither
create nor be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Subsidiary or any affiliate and
the Employee or any other individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, government or political
subdivision thereof or other entity (any “Person”). To the extent that any
Person acquires a right to receive payments from the Company or any Subsidiary
pursuant to this Agreement, such right will be no greater than the right of any
unsecured general creditor of the Company or any Subsidiary.
	 
	 	(d)	 	Headings. Headings are given to the Sections and
subsections of this Agreement solely as a convenience to facilitate reference.
Such headings will not be deemed in any way material or relevant to the
construction or interpretation of this Agreement or any provision thereof and, in
the event of any conflict, the text of this Agreement, rather than such titles or
headings, will control.

     15. Section 409A. The Bonus and the Rights thereunder are intended to constitute
compensation that is payable within the “short-term deferral” period after the Rights are no longer
subject to a “substantial risk of forfeiture” and that does not constitute “nonqualified deferred
compensation” within the meaning of Section 409A of the Code. However, if at any time the MDCC
determines that the Bonus or the Rights may be subject to Section 409A, the MDCC may, in its
discretion, adopt such amendments to this Agreement or adopt such other policies and procedures
(including amendments, policies and procedures with retroactive effect), or take any other actions,
as the MDCC determines are necessary or appropriate either for the Bonus and the Rights to be
exempt from the application of Section 409A of the Code or to comply with the requirements of
Section 409A of the Code, including by adding conditions with respect to the vesting of the Rights
and/or the payment of the Bonus.

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     IN WITNESS WHEREOF, the Company and the Employee have duly executed and delivered this
Agreement as of the date first above written.

	 	 	 	 	 
	 	KB HOME

 	 
	 	By:  	Jeffrey T. Mezger
 	 
	 	 	Chief Executive Officer and President 	 
	 	 	 	 
	 
	 	EMPLOYEE:

 	 
	 	
 	 
	 	 	[NAME] 	 
	 	 	 
	 

4exv10w38

 

Exhibit 10.38

KB HOME

FY 2006 INCENTIVE COMPENSATION

OVER CAP PHANTOM SHARE AGREEMENT

     This OVER CAP PHANTOM SHARE AGREEMENT (this “Agreement”), dated July 12, 2007, by and
between KB HOME, a Delaware corporation (the “Company”), and __________________
(“Employee”).

RECITALS

     WHEREAS, the Employee earned the incentive compensation described in the incentive
compensation letter delivered to Employee at the beginning of the 2006 fiscal year due to the
satisfaction of the applicable performance goals;

     WHEREAS, the amount of Employee’s incentive compensation for the 2006 fiscal year exceeded the
applicable annual cap on the amount of cash that Employee could be paid currently, as specified in
the incentive compensation letter;

     WHEREAS, the amount of the excess, $____________ (the “Over Cash Cap Amount”), shall
be subject to the terms and conditions set forth herein; and

     WHEREAS, the Award granted hereunder is not being issued pursuant to any stock plan, including
the KB Home Amended and Restated 1999 Incentive Plan (the “Plan”).

     NOW THEREFORE, the Company and Employee agree as follows:

AGREEMENT

     1. Award. Subject to the terms and conditions of this Agreement, the Company agrees
to deliver to Employee an amount in cash equal to the sum of:

     (a) the product of (i) the Over Cash Cap Amount divided by $36.19, the closing price
per share on the date hereof of the common stock, $1.00 par value per share, of the Company
(“Common Stock”), rounded up to the nearest whole number, and (ii) the closing price per
share of the Common Stock on the Vesting Date; and

     (b) the product of (i) the Over Cash Cap Amount divided by $36.19, rounded up to the
nearest whole number, and (ii) the cumulative value of all cash dividends paid in respect of
one share of Common Stock from and including the date hereof through and including the
Vesting Date (collectively, the “Award”).

Employee agrees that the Company has not set aside or pledged any assets to pay the Award, and that
the Company’s obligation to pay the Award hereunder shall be merely that of an unfunded and
unsecured promise to pay money in the future.

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     2. Restrictions. Subject to the exception in Section 3, Employee’s right to delivery
of the Award shall not vest until July 12, 2010 (the “Vesting Date”), and then only if the Employee
continues to be employed full-time by the Company or one of its subsidiaries on such date.
Employee understands and agrees that Employee will forfeit Employee’s right to the Award if
Employee’s full time employment is terminated for any reason prior to the Vesting Date.

     3. Change in Control. Notwithstanding anything in Section 2 to the contrary, if the
Award has not yet vested, it shall accelerate and vest upon a “change in control event,” as defined
in the regulations promulgated under Section 409A of the Internal Revenue Code.

     4. Payment. The Award will be paid to Employee by the Company no later than the third
business day following the vesting of the Award.

     5. Assignment. This Agreement may not be assigned by Employee by operation of law or
otherwise. Any purported assignment by Employee shall be null and void. This Agreement shall,
however, be binding upon the successors and assigns of the Company.

     6. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of California.

     7. Adjustments. In the event of any of the transactions described in Section 13(a) of
the Plan, the Management Development and Compensation Committee (the “MDCC”) of the Company shall
be permitted to adjust or revise the Awards in the same manner as the MDCC adjusts or revises the
phantom share rights issued on the date hereof under the Amended and Restated 1999 Incentive Plan
Phantom Share Agreement.

     8. No Other Rights. This Agreement does not constitute an employment agreement
between the parties, and nothing in this Agreement will (a) grant Employee any right to be retained
in the employ of the Company or any of its subsidiaries, nor (b) restrict the right of the Company
or any of its subsidiaries to remove, terminate or discharge Employee at any time for any reason
whatsoever.

     9. Miscellaneous. This Agreement sets forth the entire agreement of the parties with
respect to the subject matter hereof and supersedes any and all prior agreements of the parties
relating to such subject matter. No modification or amendment of this Agreement will be effective
unless signed in writing by each of the parties. If any provision of this Agreement is held to be
unenforceable for any reason, such provision will be enforced to the maximum extent permissible to
effect the parties’ intent, and the remaining provisions will continue in full force and effect.
Failure by either party to enforce any provision of this Agreement will not operate as a waiver of
any subsequent enforcement of that or any other provision.

     10. Counterparts. This Agreement may be executed, by manual or facsimile signature,
in multiple counterparts, which taken together shall constitute one instrument, and each of which
shall be constituted an original for all purposes.

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     IN WITNESS WHEREOF, the Company and Employee have duly executed and delivered this Agreement
on the dates written below.

	 	 	 	 	 
	 	KB HOME
 

 	 
	 	By:  	
 	 
	 	Jeffrey T. Mezger 	 
	 	Chief Executive Officer and President 	 
	 
	 	Date: July 12, 2007	 
	 
 
	 	EMPLOYEE

 	 
	 	
 	 
	 	Print Name: 	 
	 
	 	Date: 	
 	 
	 

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