Document:

<PAGE>   1
                                                                   EXHIBIT 10.20

                AMENDMENT NO. 3 TO 1997 REVOLVING LOAN AGREEMENT

               This Amendment No. 3 to 1997 Revolving Loan Agreement (this
"Amendment") is entered into with reference to the 1997 Revolving Loan Agreement
dated as of April 21, 1997 among Kaufman and Broad Home Corporation
("Borrower"), the Banks party thereto, Credit Lyonnais Los Angeles Branch, as
Documentation Agent and Managing Agent, Guaranty Federal Bank F.S.B., Societe
Generale and Union Bank of California, N.A., as Co-Agents, and Bank of America
National Trust and Savings Association, as Administrative Agent, Co-Syndication
Agent and Managing Agent (as heretofore amended, the "Loan Agreement").
Capitalized terms used but not defined herein are used with the meanings set
forth for those terms in the Loan Agreement.

               Borrower and the Administrative Agent, acting with the consent of
the Majority Banks pursuant to Section 11.2 of the Loan Agreement, agree as
follows:

               1.     Section 1.1. Section 1.1 of the Loan Agreement is hereby
amended to revise the following definition to read as follows:

                      "Consolidated Leverage Ratio" means, as of any date of
                      determination, the ratio of (a) Consolidated Total
                      Indebtedness on that date to (b) [Consolidated Tangible
                      Net Worth on that date minus the amount, if any, by which
                      the portion of Shareholder's Equity of Borrower and its
                      Consolidated Subsidiaries attributable to Borrower's
                      equity interest in the Shareholder's Equity of all Joint
                      Ventures (other than (i) KBMHG, (ii) any Subsidiary of
                      KBMHG engaged solely in development of multi-family
                      housing and related businesses, and (iii) any Consolidated
                      Joint Venture) exceeds $30,000,000].

               2.     Section 1.1. Section 1.1 of the Loan Agreement is amended
to make the following revisions to certain definitions therein contained:

                      Financial Subsidiary: Insert as a new clause (b) thereof
                      the following:

                                      -1-
<PAGE>   2

                             "(b) a Trust Issuer, so long as it engages in no
                             activities other than these incident to the Trust
                             Preferred Capital Securities"

                      and redesignate existing clause (b) thereof as clause (c)
                      and existing clause (c) thereof as clause (d).

                      "Senior Officer" Insert as a new clause (d) thereof the
                      following:

                             "(d) vice president and controller"

                      and redesignate existing clause (d) thereof as clause (e).

                      "Subsidiary Guaranty": Strike the word "Obligations" in
                      the first line thereof and substitute in its place the
                      words "Indebtedness of Borrower under this Agreement."

               3.     Section 1.1 of the Loan Agreement is amended to add the
following new definitions:

                      "Consolidated Joint Venture" means, as of any date of
                      determination, a Joint Venture that is consolidated in the
                      consolidated financial statements of Borrower and its
                      Subsidiaries as of such date.

                      "Specified Entities" means, collectively, (a) any Foreign
                      Subsidiary, (b) any Financial Subsidiary (other than a
                      Trust Issuer) and (c) any Person that is not a
                      wholly-owned Subsidiary of Borrower (other than a
                      Consolidated Joint Venture).

               4.     Section 2.6. Pursuant to Section 2.6, the Line B Maturity
Date is hereby extended to April 18, 2000.

               5.     Section 3.14. Section 3.14 of the Loan Agreement is
amended by inserting the words "without deduction, offset or counterclaim" after
the word "America" in the fourth line thereof.

                                      -2-
<PAGE>   3

               6.     Section 6.16. Section 6.16 of the Loan Agreement is
amended to read as follows:

                      "Certain Investments. Make any Investment in any Specified
                      Entity if, giving effect thereto, the aggregate amount of
                      all such Investments made after November 30, 1996 exceeds
                      the sum of (i) $30,000,000 plus (ii) the aggregate amount
                      of Cash Distributions declared and paid by all Specified
                      Entities to Borrower after November 30, 1996, plus (iii)
                      the aggregate amount of capital of Specified Entities
                      returned to Borrower after November 30, 1996; provided
                      that Borrower may make further Investments after November
                      30, 1996 in Mortgage Company in addition to the amount
                      permitted by the foregoing so long as such further
                      Investments do not exceed $30,000,000."

               7.     Section 7.1(b). Section 7.1(b) of the Loan Agreement is
amended by adding the words "(in accordance with past practices of Borrower)"
after the word "consolidating" in the second and fifth lines thereof.

               8.     Section 9.1. Section 9.1 of the Loan Agreement is amended
by adding a new subsection (n) as follows:

                      "(n) the occurrence of an Event of Default (as such term
                      is defined in that certain Term Loan Agreement dated as of
                      January 7, 1999 among Borrower, Bank of America NT&SA, as
                      Administrative Agent, and the banks party thereto) under
                      such Term Loan Agreement."

               9.     Section 11.3. Section 11.3 of the Loan Agreement is
amended by inserting the word "actual" after the word "reasonable" in the tenth,
nineteenth and thirty-third lines thereof.

               10.    Section 11.8(e). Section 11.8(e) of the Loan Agreement is
amended to insert a new clause "(D)" as follows:

                      "(D) release any Guarantor Subsidiary from its obligations
                      under the Subsidiary Guaranty"

                      and to redesignate existing clause "(D)" as clause "(E)".

                                      -3-
<PAGE>   4

               11.    Line B Commitment. The Pro Rata Shares of the Banks with
respect to the Line B Commitment are hereby revised as set forth in Schedule 1.1
attached hereto.

               12.    Conditions Precedent. The effectiveness of this Amendment
shall be conditioned upon the receipt by the Administrative Agent of all of the
following, each properly executed by a Responsible Official of each party
thereto and dated as of the date hereof:

               a.     Counterparts of this Amendment executed by all parties
                      hereto;

               b.     Instrument of Joinder to the Subsidiary Guaranty in the
                      form of Exhibit A to this Amendment executed by each
                      Significant Subsidiary of Borrower acquired by Borrower
                      pursuant to that certain Purchase Agreement executed as of
                      January 7, 1999 among Borrower and the sellers of the
                      "Homebuilding Business" of the Lewis Homes companies;

               c.     Line B Notes executed by Borrower in favor of those Banks
                      whose Pro Rata Share of the Line B Commitment has changed
                      pursuant to Paragraph 10 hereof;

               d.     Written consents of each of the Guarantor Subsidiaries to
                      the execution, delivery and performance hereof,
                      substantially in the form of Exhibit B to this Amendment;

               e.     Written consent of the Majority Banks as required under
                      Section 11.2 of the Loan Agreement in the form of Exhibit
                      C to this Amendment; and

               f.     A fee letter by Borrower in favor of the Administrative
                      Agent in form and substance satisfactory to the
                      Administrative Agent concerning the Pro Rata Shares of
                      certain Banks with respect to the Line B Commitment.

               13.    Representation and Warranty. Borrower represents and
warrants to the Administrative Agent and the Banks that no Default or Event of
Default has occurred and remains continuing.

                                      -4-
<PAGE>   5

               14.    Confirmation. In all other respects, the terms of the Loan
Agreement and the other Loan Documents are hereby confirmed.

               IN WITNESS WHEREOF, Borrower and the Administrative Agent have
executed this Amendment as of April 19, 1999 by their duly authorized
representatives.

                                        KAUFMAN AND BROAD HOME CORPORATION

                                        By: /s/ MICHAEL F. HENN
                                            ------------------------------------
                                            Michael F. Henn
                                            Senior Vice President and
                                            Chief Financial Officer

                                        BANK OF AMERICA NATIONAL TRUST AND
                                        SAVINGS ASSOCIATION, as Administrative
                                        Agent

                                        By: /s/ KELLY M. ALLRED
                                            ------------------------------------
                                            Kelly M. Allred
                                            Vice President

                                      -5-
<PAGE>   6

                             Exhibit A to Amendment

                              INSTRUMENT OF JOINDER
                                       TO
                                    GUARANTY

               THIS INSTRUMENT OF JOINDER ("Joinder") is executed as of April
19, 1999, by LEWIS HOMES OF CALIFORNIA, a California general partnership, LEWIS
DEVELOPMENT CO., a California general partnership, LEWIS HOMES ENTERPRISES, a
California general partnership, LEWIS HOMES OF NEVADA, a Nevada general
partnership, and LEWIS PROPERTIES, a Nevada general partnership (each a "Joining
Party" and collectively, "Joining Parties"), and delivered to the Administrative
Agent pursuant to the Guaranty dated as of April 21, 1997 (the "Guaranty").
Terms used but not defined in this Joinder shall have the meanings defined for
those terms in the Guaranty.

                                    RECITALS

               1.     The Guaranty was made by the Guarantors in favor of the
Banks that are parties to that certain 1997 Revolving Loan Agreement, dated as
of April 21, 1997 (the "Loan Agreement") among Kaufman and Broad Home
Corporation, as Borrower, the Banks signatory thereto, Bank of America National
Trust and Savings Association, as Administrative Agent and Co-Syndication Agent,
Credit Lyonnais Los Angeles Branch as Documentation Agent, and Guaranty Federal
Bank, F.S.B., Societe Generale and Union Bank of California, as Co-Agents.

               2.     Each Joining Party expects to realize direct and indirect
benefits as a result of the availability to Borrower of a credit facility
pursuant to the Loan Agreement, and as a result of becoming a party to the
Guaranty.

               NOW THEREFORE, Joining Parties agree as follows:

                                    AGREEMENT

I.      By this Joinder, each Joining Party becomes a "Guarantor" under and
pursuant to Section 10 of the Guaranty. Each Joining Party agrees that, upon its
execution hereof, it will become a Guarantor under the Guaranty with respect to
all Indebtedness of Borrower heretofore or hereafter incurred under the Loan
Agreement, and will be

                                      -6-
<PAGE>   7

bound by all terms, conditions, and duties applicable to a Guarantor under the
Guaranty.

II.     The effective date of this Joinder is April 19, 1999.

"Joining Parties"

LEWIS HOMES OF CALIFORNIA,              LEWIS DEVELOPMENT CO.,
a California general partnership        a California general partnership

By:  KB HOLDINGS ONE, INC.,             By:  KB HOLDINGS ONE, INC.,
     a California corporation,               a California corporation,
     its General Partner                     its General Partner

     By: /s/ MICHAEL F. HENN                 By: /s/ MICHAEL F. HENN
         ------------------------                ------------------------

     Name: Michael F. Henn                   Name:
           ----------------------                  ----------------------

     Title: President                        Title:
            ---------------------                   ---------------------

LEWIS HOMES ENTERPRISES,                LEWIS PROPERTIES,
a California general partnership        a Nevada general partnership

By:  KB HOLDINGS ONE, INC.,             By:  KB HOLDINGS ONE, INC.,
     a California corporation,               a California corporation,
     its General Partner                     its General Partner

     By: /s/ MICHAEL F. HENN                 By: /s/ MICHAEL F. HENN
         ------------------------                ------------------------

     Name:                                   Name:
           ----------------------                ------------------------

     Title:                                  Title:
            ---------------------                   ---------------------

LEWIS HOMES OF NEVADA,
a Nevada general partnership

By:  KB HOLDINGS ONE, INC.,
     a California corporation,
     its General Partner

     By: /s/ MICHAEL F. HENN
         ------------------------

     Name:
           ----------------------

     Title:
            ---------------------

                                      -7-
<PAGE>   8

ACKNOWLEDGED:

BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent

By: /s/ KELLY M. ALLRED
    ------------------------

Name: Kelly M. Allred
      ----------------------

Title: Vice President
       ---------------------

KAUFMAN AND BROAD HOME CORPORATION

By: /s/ MICHAEL F. HENN
    ------------------------

Name: Michael F. Henn
      ----------------------

Title: SVP & CFO
       ---------------------

                                      -8-
<PAGE>   9

                             Exhibit B to Amendment

                        CONSENT OF GUARANTOR SUBSIDIARIES

               Reference is hereby made to that certain 1997 Revolving Loan
Agreement dated as of April 21, 1997 among Kaufman and Broad Home Corporation
("Borrower"), the Banks party thereto, Credit Lyonnais Los Angeles Branch, as
Documentation Agent and Managing Agent, Guaranty Federal Bank F.S.B., Societe
Generale and Union Bank of California, N.A., as Co-Agents, and Bank of America
National Trust and Savings Association, as Administrative Agent, Co-Syndication
Agent and Managing Agent (as heretofore amended, the "Loan Agreement").

               Each of the undersigned hereby consents to the execution,
delivery and performance by Borrower and the Administrative Agent of Amendment
No. 3 to the Loan Agreement.

               Each of the undersigned represents and warrants to the
Administrative Agent and the Banks that the Subsidiary Guaranty remains in full
force and effect in accordance with its terms.

Dated: April 19, 1999

                                   "GUARANTORS"

                                   KAUFMAN AND BROAD OF NORTHERN
                                   CALIFORNIA, INC., a California corporation

                                   KAUFMAN AND BROAD OF SAN DIEGO,
                                   INC., a California corporation

                                   KAUFMAN AND BROAD - SOUTH BAY,
                                   INC., a California corporation

                                   KAUFMAN AND BROAD - CENTRAL
                                   VALLEY, INC., a California corporation

                                   KAUFMAN AND BROAD COASTAL, INC.,
                                   a California corporation

                                      -9-
<PAGE>   10

                                   KAUFMAN AND BROAD OF NEVADA,
                                   INC., a Nevada corporation

                                   KAUFMAN AND BROAD OF ARIZONA,
                                   INC., an Arizona corporation

                                   KAUFMAN AND BROAD OF COLORADO,
                                   INC., a Colorado corporation

                                   KAUFMAN AND BROAD MULTI-
                                   HOUSING GROUP, INC., a California
                                   corporation

                                   KAUFMAN AND BROAD OF NEW
                                   MEXICO, INC., a New Mexico corporation

                                   KAUFMAN AND BROAD - MONTEREY
                                   BAY, INC., a California corporation

                                   KAUFMAN AND BROAD OF
                                   SACRAMENTO, INC., a California
                                   corporation

                                   KAUFMAN AND BROAD OF RENO, INC., a
                                   Nevada corporation

                                   GENERAL HOMES CORPORATION, a
                                   Delaware corporation

                                   By: /s/ WILLIAM R. HOLLINGER
                                       -----------------------------------------
                                       William R. Hollinger, Assistant Secretary

                                      -10-
<PAGE>   11

                                   KB HOLDINGS ONE, INC., a California
                                   corporation

                                   By: /s/ WILLIAM R. HOLLINGER
                                       -----------------------------------------
                                       William R. Hollinger, Assistant Secretary
                                                  and Vice President

                                   KAUFMAN AND BROAD OF SOUTHERN
                                   CALIFORNIA, INC., a California corporation

                                   By: /s/ WILLIAM R. HOLLINGER
                                       -----------------------------------------
                                       William R. Hollinger, Assistant Treasurer

                                   KAUFMAN AND BROAD OF UTAH, INC., a
                                   California corporation

                                   By: /s/ WILLIAM R. HOLLINGER
                                       -----------------------------------------
                                       William R. Hollinger, Vice President

                                   KAUFMAN AND BROAD OF TEXAS, LTD.,
                                   a Texas limited partnership

                                   By: KBSA, Inc., a Texas corporation,
                                       Its general partner

                                   By: /s/ WILLIAM R. HOLLINGER
                                       -----------------------------------------
                                           William R. Hollinger,
                                           Assistant Secretary

                                      -11-
<PAGE>   12

                                   KAUFMAN AND BROAD LONE STAR, L.P.,
                                   a Texas limited partnership

                                   By: KBSA, Inc., a Texas corporation,
                                       Its general partner

                                   By: /s/ WILLIAM R. HOLLINGER
                                       -----------------------------------------
                                           William R. Hollinger,
                                           Assistant Secretary

                                   KAUFMAN AND BROAD DEVELOPMENT
                                   OF TEXAS, L.P., a Texas limited partnership

                                   By: KBSA, Inc., a Texas corporation,
                                       Its general partner

                                        By: /s/ WILLIAM R. HOLLINGER
                                            ------------------------------------
                                                William R. Hollinger,
                                                Assistant Secretary

                                      -12-
<PAGE>   13

                             Exhibit C to Amendment

                                 CONSENT OF BANK

               Reference is hereby made to that certain 1997 Revolving Loan
Agreement dated as of April 21, 1997 among Kaufman and Broad Home Corporation
("Borrower"), the Banks party thereto, Credit Lyonnais Los Angeles Branch, as
Documentation Agent and Managing Agent, Guaranty Federal Bank F.S.B., Societe
Generale and Union Bank of California, N.A., as Co-Agents, and Bank of America
National Trust and Savings Association, as Administrative Agent, Co-Syndication
Agent and Managing Agent (as heretofore amended, the "Loan Agreement").

               The undersigned Bank hereby consents to the execution and
delivery of Amendment No. 3 to the Loan Agreement by the Administrative Agent on
its behalf, substantially in the form of the most recent draft thereof presented
to the undersigned Bank.

Dated: April 22, 1999

                              The Industrial Bank of Japan - Los Angeles Agency
                              -------------------------------------------------
                              [Name of Institution]

                              By: /s/ TAKESHI KUBO
                                  ---------------------------------------------
                              Takeshi Kubo (Vice President)
                              -------------------------------------------------
                              [Printed Name and Title]

                                      -13-

<PAGE>   14

                             Exhibit C to Amendment

                                 CONSENT OF BANK

               Reference is hereby made to that certain 1997 Revolving Loan
Agreement dated as of April 21, 1997 among Kaufman and Broad Home Corporation
("Borrower"), the Banks party thereto, Credit Lyonnais Los Angeles Branch, as
Documentation Agent and Managing Agent, Guaranty Federal Bank F.S.B., Societe
Generale and Union Bank of California, N.A., as Co-Agents, and Bank of America
National Trust and Savings Association, as Administrative Agent, Co-Syndication
Agent and Managing Agent (as heretofore amended, the "Loan Agreement").

               The undersigned Bank hereby consents to the execution and
delivery of Amendment No. 3 to the Loan Agreement by the Administrative Agent on
its behalf, substantially in the form of the most recent draft thereof presented
to the undersigned Bank.

Dated: April 16, 1999

                              Societe Generale
                              -------------------------------------------------
                              [Name of Institution]

                              By: /s/ MAUREEN KELLY
                                  ---------------------------------------------
                              Director
                              -------------------------------------------------
                              [Printed Name and Title]

                                      -13-

<PAGE>   15

                             Exhibit C to Amendment

                                 CONSENT OF BANK

               Reference is hereby made to that certain 1997 Revolving Loan
Agreement dated as of April 21, 1997 among Kaufman and Broad Home Corporation
("Borrower"), the Banks party thereto, Credit Lyonnais Los Angeles Branch, as
Documentation Agent and Managing Agent, Guaranty Federal Bank F.S.B., Societe
Generale and Union Bank of California, N.A., as Co-Agents, and Bank of America
National Trust and Savings Association, as Administrative Agent, Co-Syndication
Agent and Managing Agent (as heretofore amended, the "Loan Agreement").

               The undersigned Bank hereby consents to the execution and
delivery of Amendment No. 3 to the Loan Agreement by the Administrative Agent on
its behalf, substantially in the form of the most recent draft thereof presented
to the undersigned Bank.

Dated: April 16, 1999

                              SunTrust Bank, Atlanta
                              -------------------------------------------------
                              [Name of Institution]

                              By: /s/ DONALD L. GAUDETTE, JR.
                                  ---------------------------------------------
                              Donald L. Gaudette, Jr.
                              Director/Vice President
                              -------------------------------------------------
                              [Printed Name and Title]

                                      -13-

<PAGE>   16

                             Exhibit C to Amendment

                                 CONSENT OF BANK

               Reference is hereby made to that certain 1997 Revolving Loan
Agreement dated as of April 21, 1997 among Kaufman and Broad Home Corporation
("Borrower"), the Banks party thereto, Credit Lyonnais Los Angeles Branch, as
Documentation Agent and Managing Agent, Guaranty Federal Bank F.S.B., Societe
Generale and Union Bank of California, N.A., as Co-Agents, and Bank of America
National Trust and Savings Association, as Administrative Agent, Co-Syndication
Agent and Managing Agent (as heretofore amended, the "Loan Agreement").

               The undersigned Bank hereby consents to the execution and
delivery of Amendment No. 3 to the Loan Agreement by the Administrative Agent on
its behalf, substantially in the form of the most recent draft thereof presented
to the undersigned Bank.

Dated: April 16, 1999

                              PARIBAS
                              -------------------------------------------------
                              [Name of Institution]

                              By: /s/ JOHN KOPCHA
                                  ---------------------------------------------
                                  John Kopcha
                                  Director
                              -------------------------------------------------
                              [Printed Name and Title]

                              By: /s/ MARC PREISER
                                  ---------------------------------------------
                                  Marc Preiser
                                  Vice President

                                      -13-

<PAGE>   17

                             Exhibit C to Amendment

                                 CONSENT OF BANK

               Reference is hereby made to that certain 1997 Revolving Loan
Agreement dated as of April 21, 1997 among Kaufman and Broad Home Corporation
("Borrower"), the Banks party thereto, Credit Lyonnais Los Angeles Branch, as
Documentation Agent and Managing Agent, Guaranty Federal Bank F.S.B., Societe
Generale and Union Bank of California, N.A., as Co-Agents, and Bank of America
National Trust and Savings Association, as Administrative Agent, Co-Syndication
Agent and Managing Agent (as heretofore amended, the "Loan Agreement").

               The undersigned Bank hereby consents to the execution and
delivery of Amendment No. 3 to the Loan Agreement by the Administrative Agent on
its behalf, substantially in the form of the most recent draft thereof presented
to the undersigned Bank.

Dated: April 16, 1999

                              THE CHASE MANHATTAN BANK
                              -------------------------------------------------
                              [Name of Institution]

                              By: /s/ MARC E. CONSTANTINO
                                  ---------------------------------------------
                                  Marc E. Constantino
                                  Vice President
                              -------------------------------------------------
                              [Printed Name and Title]

                                      -13-

<PAGE>   18

                                  VIA FACSIMILE

                                 April 19, 1999

Mr. John E. Friedricks
Sheppard, Mullin, Richter, & Hampton, LLP
Attorneys At Law
333 S. Hope Street
Los Angeles, CA 90071

Re:  Kaufman and Board Corporation

     Reference is hereby made to that certain 1997 Revolving Loan Agreement
dated as of April 21, 1997 among Kaufman and Broad Home Corporation
("Borrower"), the Banks party thereto, Credit Lyonnais Los Angeles Branch, as
Documentation Agent and Managing Agent, Guaranty Federal Bank F.S.B., Societe
Generale and Union Bank of California, N.A., as Co-Agents, and Bank of America
National Trust and Savings Association, as Administrative Agent, Co-Syndication
Agent and Managing Agent (as heretofore amended, the "Loan Agreement").

     The undersigned Bank hereby consents to the execution and delivery of
Amendment No. 3 to the Loan Agreement by the Administrative Agent on its behalf,
substantially in the form of the most recent draft thereof presented to the
undersigned Bank.

Dated: April 19, 1999

                              The First National Bank of Chicago
                              -------------------------------------------------

                              By: /s/ JAMES D. BENKO
                                  ---------------------------------------------
                                  James D. Benko
                                  Vice President

<PAGE>   19

                             Exhibit C to Amendment

                                 CONSENT OF BANK

               Reference is hereby made to that certain 1997 Revolving Loan
Agreement dated as of April 21, 1997 among Kaufman and Broad Home Corporation
("Borrower"), the Banks party thereto, Credit Lyonnais Los Angeles Branch, as
Documentation Agent and Managing Agent, Guaranty Federal Bank F.S.B., Societe
Generale and Union Bank of California, N.A., as Co-Agents, and Bank of America
National Trust and Savings Association, as Administrative Agent, Co-Syndication
Agent and Managing Agent (as heretofore amended, the "Loan Agreement").

               The undersigned Bank hereby consents to the execution and
delivery of Amendment No. 3 to the Loan Agreement by the Administrative Agent on
its behalf, substantially in the form of the most recent draft thereof presented
to the undersigned Bank.

Dated: April ___, 1999

                              The Bank of New York
                              -------------------------------------------------
                              [Name of Institution]

                              By: /s/ ROBERT W. PIERSON
                                  ---------------------------------------------
                              Robert W. Pierson, VP
                              -------------------------------------------------
                              [Printed Name and Title]

                                      -13-

<PAGE>   20

                             Exhibit C to Amendment

                                 CONSENT OF BANK

               Reference is hereby made to that certain 1997 Revolving Loan
Agreement dated as of April 21, 1997 among Kaufman and Broad Home Corporation
("Borrower"), the Banks party thereto, Credit Lyonnais Los Angeles Branch, as
Documentation Agent and Managing Agent, Guaranty Federal Bank F.S.B., Societe
Generale and Union Bank of California, N.A., as Co-Agents, and Bank of America
National Trust and Savings Association, as Administrative Agent, Co-Syndication
Agent and Managing Agent (as heretofore amended, the "Loan Agreement").

               The undersigned Bank hereby consents to the execution and
delivery of Amendment No. 3 to the Loan Agreement by the Administrative Agent on
its behalf, substantially in the form of the most recent draft thereof presented
to the undersigned Bank.

Dated: April 19, 1999

                              COMERICA BANK
                              -------------------------------------------------
                              [Name of Institution]

                              By: /s/ SAM MEEHAN
                                  ---------------------------------------------
                              Sam Meehan, Account Officer
                              -------------------------------------------------
                              [Printed Name and Title]

                                      -13-

<PAGE>   21

                             Exhibit C to Amendment

                                 CONSENT OF BANK

               Reference is hereby made to that certain 1997 Revolving Loan
Agreement dated as of April 21, 1997 among Kaufman and Broad Home Corporation
("Borrower"), the Banks party thereto, Credit Lyonnais Los Angeles Branch, as
Documentation Agent and Managing Agent, Guaranty Federal Bank F.S.B., Societe
Generale and Union Bank of California, N.A., as Co-Agents, and Bank of America
National Trust and Savings Association, as Administrative Agent, Co-Syndication
Agent and Managing Agent (as heretofore amended, the "Loan Agreement").

               The undersigned Bank hereby consents to the execution and
delivery of Amendment No. 3 to the Loan Agreement by the Administrative Agent on
its behalf, substantially in the form of the most recent draft thereof presented
to the undersigned Bank.

Dated: April 19, 1999

                              BANK OF AMERICA NT&SA
                              -------------------------------------------------
                              [Name of Institution]

                              By: /s/ KELLY M. ALLRED
                                  ---------------------------------------------
                              Kelly M. Allred, VP
                              -------------------------------------------------
                              [Printed Name and Title]

                                      -13-

<PAGE>   22

                             Exhibit C to Amendment

                                 CONSENT OF BANK

               Reference is hereby made to that certain 1997 Revolving Loan
Agreement dated as of April 21, 1997 among Kaufman and Broad Home Corporation
("Borrower"), the Banks party thereto, Credit Lyonnais Los Angeles Branch, as
Documentation Agent and Managing Agent, Guaranty Federal Bank F.S.B., Societe
Generale and Union Bank of California, N.A., as Co-Agents, and Bank of America
National Trust and Savings Association, as Administrative Agent, Co-Syndication
Agent and Managing Agent (as heretofore amended, the "Loan Agreement").

               The undersigned Bank hereby consents to the execution and
delivery of Amendment No. 3 to the Loan Agreement by the Administrative Agent on
its behalf, substantially in the form of the most recent draft thereof presented
to the undersigned Bank.

Dated: April 19, 1999

                              UNION BANK OF CALIFORNIA, N.A.
                              -------------------------------------------------
                              [Name of Institution]

                              By: /s/ GARY ROBERTS
                                  ---------------------------------------------
                                      Gary Roberts
                                      Vice President
                              -------------------------------------------------
                              [Printed Name and Title]

                                      -13-

<PAGE>   23

                             Exhibit C to Amendment

                                 CONSENT OF BANK

               Reference is hereby made to that certain 1997 Revolving Loan
Agreement dated as of April 21, 1997 among Kaufman and Broad Home Corporation
("Borrower"), the Banks party thereto, Credit Lyonnais Los Angeles Branch, as
Documentation Agent and Managing Agent, Guaranty Federal Bank F.S.B., Societe
Generale and Union Bank of California, N.A., as Co-Agents, and Bank of America
National Trust and Savings Association, as Administrative Agent, Co-Syndication
Agent and Managing Agent (as heretofore amended, the "Loan Agreement").

               The undersigned Bank hereby consents to the execution and
delivery of Amendment No. 3 to the Loan Agreement by the Administrative Agent on
its behalf, substantially in the form of the most recent draft thereof presented
to the undersigned Bank.

Dated: April 21, 1999

                              BANK UNITED
                              -------------------------------------------------
                              [Name of Institution]

                              By: /s/ THOMAS S. GRIFFIN
                                  ---------------------------------------------
                                      Thomas S. Griffin, VP/MGR.
                              -------------------------------------------------
                              [Printed Name and Title]

                                      -13-

<PAGE>   24

                             Exhibit C to Amendment

                                 CONSENT OF BANK

               Reference is hereby made to that certain 1997 Revolving Loan
Agreement dated as of April 21, 1997 among Kaufman and Broad Home Corporation
("Borrower"), the Banks party thereto, Credit Lyonnais Los Angeles Branch, as
Documentation Agent and Managing Agent, Guaranty Federal Bank F.S.B., Societe
Generale and Union Bank of California, N.A., as Co-Agents, and Bank of America
National Trust and Savings Association, as Administrative Agent, Co-Syndication
Agent and Managing Agent (as heretofore amended, the "Loan Agreement").

               The undersigned Bank hereby consents to the execution and
delivery of Amendment No. 3 to the Loan Agreement by the Administrative Agent on
its behalf, substantially in the form of the most recent draft thereof presented
to the undersigned Bank.

Dated: April 19, 1999

                              Guaranty Federal Bank F.S.B.
                              -------------------------------------------------
                              [Name of Institution]

                              By: /s/ RICHARD V. THOMPSON
                                  ---------------------------------------------
                                      Richard V. Thompson, Vice President
                              -------------------------------------------------
                              [Printed Name and Title]

                                      -13-

<PAGE>   25

                             Exhibit C to Amendment

                                 CONSENT OF BANK

               Reference is hereby made to that certain 1997 Revolving Loan
Agreement dated as of April 21, 1997 among Kaufman and Broad Home Corporation
("Borrower"), the Banks party thereto, Credit Lyonnais Los Angeles Branch, as
Documentation Agent and Managing Agent, Guaranty Federal Bank F.S.B., Societe
Generale and Union Bank of California, N.A., as Co-Agents, and Bank of America
National Trust and Savings Association, as Administrative Agent, Co-Syndication
Agent and Managing Agent (as heretofore amended, the "Loan Agreement").

               The undersigned Bank hereby consents to the execution and
delivery of Amendment No. 3 to the Loan Agreement by the Administrative Agent on
its behalf, substantially in the form of the most recent draft thereof presented
to the undersigned Bank.

Dated: April 19, 1999

                              KBC BANK N.V.
                              -------------------------------------------------
                              [Name of Institution]

                              By: /s/ ROBERT SNAUFFER
                                  ---------------------------------------------
                                      ROBERT SNAUFFER
                                      FIRST VICE PRESIDENT
                              -------------------------------------------------
                              [Printed Name and Title]

                              /s/ DECLAN P. MEAGHER
                              -------------------------------------------------
                                  DECLAN P. MEAGHER
                                  VICE PRESIDENT

                                      -13-

<PAGE>   26

                                 CONSENT OF BANK

               Reference is hereby made to that certain 1997 Revolving Loan
Agreement dated as of April 21, 1997 among Kaufman and Broad Home Corporation
("Borrower"), the Banks party thereto, Credit Lyonnais Los Angeles Branch, as
Documentation Agent and Managing Agent, Guaranty Federal Bank F.S.B., Societe
Generale and Union Bank of California, N.A., as Co-Agents, and Bank of America
National Trust and Savings Association, as Administrative Agent, Co-Syndication
Agent and Managing Agent (as heretofore amended, the "Loan Agreement").

               The undersigned Bank hereby consents to the execution and
delivery of Amendment No. 3 to the Loan Agreement by the Administrative Agent on
its behalf, substantially in the form of the most recent draft thereof presented
to the undersigned Bank.

Dated: April 19, 1999

                              Credit Lyonnais Los Angeles Branch
                              -------------------------------------------------
                              [Name of Institution]

                              By: /s/ DIANNE M. SCOTT
                                  ---------------------------------------------
                                      Dianne M. Scott
                                      First Vice President and Manager
                              -------------------------------------------------
                              [Printed Name and Title]

                                      -13-

<PAGE>   27

                             Exhibit C to Amendment

                                 CONSENT OF BANK

               Reference is hereby made to that certain 1997 Revolving Loan
Agreement dated as of April 21, 1997 among Kaufman and Broad Home Corporation
("Borrower"), the Banks party thereto, Credit Lyonnais Los Angeles Branch, as
Documentation Agent and Managing Agent, Guaranty Federal Bank F.S.B., Societe
Generale and Union Bank of California, N.A., as Co-Agents, and Bank of America
National Trust and Savings Association, as Administrative Agent, Co-Syndication
Agent and Managing Agent (as heretofore amended, the "Loan Agreement").

               The undersigned Bank hereby consents to the execution and
delivery of Amendment No. 3 to the Loan Agreement by the Administrative Agent on
its behalf, substantially in the form of the most recent draft thereof presented
to the undersigned Bank.

Dated: April ___, 1999

                              Sanwa Bank California
                              -------------------------------------------------
                              [Name of Institution]

                              By: /s/ KURT MAIR
                                  ---------------------------------------------
                              Kurt Mair, AVP
                              -------------------------------------------------
                              [Printed Name and Title]

                                      -13-<PAGE>   1
                                                                   EXHIBIT 10.21

                       KAUFMAN AND BROAD HOME CORPORATION

                               1999 INCENTIVE PLAN

     SECTION 1. PURPOSE. The purpose of the 1999 Incentive Plan (the "Plan") is
to promote the success of Kaufman and Broad Home Corporation (the "Company") by
providing a method whereby a broad category of non-executive employees of the
Company and its subsidiaries and other eligible participants may be encouraged
to invest in the Common Stock, $1.00 par value, of the Company ("Common Stock"),
increase their proprietary interest in its business, remain in the employ of the
Company or its subsidiaries, and increase their personal interests in the
continued success and progress of the Company. The Plan provides for the grant
of Options that are not intended to satisfy the requirements for treatment as
Incentive Stock Options as defined under Section 422 of the Code, as well as for
certain other "Awards," as defined below.

     SECTION 2. DEFINITIONS. As used in this Plan, the following terms shall
have the indicated meanings:

     (a)  AWARD: An award under this Plan of a Performance Stock Award,
Restricted Stock Award, or Stock Unit Award.

     (b)  BOARD: The board of directors of Kaufman and Broad Home Corporation.

     (c)  CODE: The Internal Revenue Code of 1986, as amended.

     (d)  COMMITTEE: The Committee specified in Section 3(a) of this Plan.

     (e)  COMPANY: Kaufman and Broad Home Corporation and its Subsidiaries.

     (f)  EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.

     (g)  LIMITED STOCK APPRECIATION RIGHT: A right granted pursuant to Section
6(b) to receive cash in certain circumstances with respect to a related Option.

     (h)  OPTION: An Option is a right granted under Section 6(a) to purchase a
number of shares of Common Stock at such exercise price, at such times, and on
such other terms and conditions as are specified in or determined pursuant to
the document(s) evidencing the Award.

     (i)  PARTICIPANT: An individual eligible under Section 5(a) to participate
in this Plan.

<PAGE>   2
     (j)  PERFORMANCE OBJECTIVES: With reference to a particular Option or
Award, the objectives established by the Committee under various criteria, the
satisfaction of which may result in the grant, issuance, retention and/or
vesting of an Option, a Performance Stock Award or Stock Unit Award, or which
may accelerate the release of shares of Common Stock from the restrictions of a
Restricted Stock Award. The Performance Objectives may differ from Participant
to Participant and from Award to Award, as determined by the Committee and
specified in the applicable Award, and may include any one or more of the
following performance criteria, either individually, alternatively or in any
combination, applied to either the Company as a whole or to a business unit or
subsidiary, either individually, alternatively or in any combination, and
measured either annually or cumulatively over a period of years, on an absolute
basis or relative to a pre-established target, to previous years' results or to
a designated comparison group, in each case as specified by the Committee in the
Award: (i) pre-tax income, (ii) after-tax income, (iii) cash flow, (iv) return
on equity, (v) return on capital, (vi) earnings per share (including earnings
before interest, taxes, depreciation and amortization), (vii) unit volume,
(viii) net sales, (ix) service quality or (v) total shareholder return, in each
case as determined in accordance with Generally Accepted Accounting Principles,
if applicable.

     (k)  PERFORMANCE STOCK AWARD: Performance Stock is an award of shares of
Common Stock made under Section 7(a), the grant, issuance, retention and/or
vesting of which is subject to such performance and other conditions as are
expressed in the document(s) evidencing the Award.

     (l)  PLAN: The Kaufman and Broad Home Corporation 1999 Incentive Plan, as
it may be amended from time to time.

     (m)  RESTRICTED STOCK AWARD: Restricted Stock is a right granted under
Section 7(b) to shares of Common Stock issued or issuable under the Plan but
subject during specified periods of time to such conditions on vesting,
restrictions on transferability and/or repurchase rights as are expressed in the
document(s) evidencing the Award.

     (n)  STOCK UNIT AWARD: An award granted under Section 8 of this Plan.

     (o)  SUBSIDIARY: Any corporation of which the Corporation owns, directly or
indirectly, fifty percent (50%) or more of the voting or capital stock, or any
partnership or other entity of which the Company owns, directly or indirectly, a
fifty percent (50%) or more participating interest or the general partner of
which is a Subsidiary.

     (p)  TAX DATE: The date on which taxes of any kind are required by law to
be withheld with respect to shares of Common Stock subject to an Option or
Award.

                                       2

<PAGE>   3
     SECTION 3.  ADMINISTRATION.

     (a)  The Plan shall be administered by the Board and/or by a committee of
the Board, as appointed from time to time by the Board (the "Committee").
The Board shall fill vacancies on, and from time to time may remove or add
members to, the Committee. The Committee shall act pursuant to a majority vote
or unanimous written consent. Notwithstanding the foregoing, the Committee may
appoint one or more separate committees (any such committee, a "Subcommittee")
composed of one or more directors of the Corporation (who may but need not be
members of the Committee) and may delegate to any such Subcommittee(s) the
authority to grant Options, Limited Stock Appreciation Rights and/or Awards
under the Plan, to determine all terms of such Options, Limited Stock
Appreciation Rights and/or Awards, and to administer the Plan or any aspect of
it. Any action by any such Subcommittee shall be deemed for all purposes to have
been taken by the Committee. The Committee may designate the Secretary of the
Corporation or other Company employees to assist the Committee in the
administration of the Plan, and may grant authority to such persons to issue
and/or execute agreements or other documents under this Plan on behalf of the
Committee or the Company.

     (b)  The Committee shall have full power and authority, subject to such
orders or resolutions not inconsistent with the provisions of the Plan as may
from time to time be issued or adopted by the Board, to grant to eligible
persons Options, Limited Stock Appreciation Rights and Awards pursuant to the
provisions of the Plan, to fix the exercise price and other terms of Options, to
fix the terms of any Performance Stock Award and/or Restricted Stock Award in a
manner consistent with the terms of Section 7, to fix the terms of any Stock
Unit Award in a manner consistent with the terms of Section 8, to prescribe,
amend and rescind rules and regulations, if any, relating to the Plan, to
interpret the provisions of the Plan, Options, Limited Stock Appreciation Rights
and Awards issued under the Plan, to amend such Options, Limited Stock
Appreciation Rights and Awards from time to time subject to the provisions of
the Plan, and to supervise the administration of the Plan. All decisions made by
the Committee pursuant to the provisions of the Plan and related orders or
resolutions of the Board shall be final, conclusive and binding on all persons,
including the Company, stockholders, employees and optionees.

     (c)  Each person who is or shall have been a member of the Committee or of
the Board shall be indemnified and held harmless by the Company from any loss,
cost, liability or expense that may be imposed upon or reasonably incurred by
him or her in connection with any claim, action, suit or proceeding to which
he or she may be a party by reason of any action taken or any failure to act
under the Plan. The foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which

                                       3

<PAGE>   4
such persons may be entitled under the Company's Articles of Incorporation or
Bylaws, or as a matter of law, or otherwise, or any power that the Company may
have to indemnify them or hold them harmless.

     SECTION 4.  SHARES SUBJECT TO THE PLAN.

     (a)  The shares to be delivered upon exercise of Options or Limited Stock
Appreciation Rights granted under the Plan or pursuant to Awards, may be made
available from the authorized but unissued shares of the Company or from shares
reacquired by the Company, including shares purchased in the open market or in
private transactions.

     (b)  Subject to adjustments made pursuant to the provisions of Section 4(c)
and this Section 4(b), the aggregate number of shares reserved for issuance upon
the exercise of Options and pursuant to Awards which may be granted under the
Plan shall not exceed 2,000,000 shares of Common Stock. The aggregate number of
shares of Common Stock issued under this Plan shall equal only the number of
shares actually issued upon exercise or settlement of an Option or vesting or
settlement of any Award and not returned to the Company upon cancellation,
expiration or forfeiture of Options and Awards or delivered (either actually or
by attestation) in payment or satisfaction of the exercise price, purchase price
or tax obligation of Options and Awards.

     (c)  In the event that the Committee shall determine that any stock
dividend, extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination, exchange of shares, warrants or
rights offering to purchase Common Stock at a price substantially below fair
market value, or other similar corporate event affects the Common Stock such
that an adjustment is required in order to preserve the benefits or potential
benefits intended to be made available to Participants under this Plan, then the
Committee shall, in its sole discretion, subject to approval by the Board, and
in such manner as the Committee may deem equitable, adjust any or all of (1) the
number and kind of shares which thereafter may be awarded or optioned and sold
or made the subject of Limited Stock Appreciation Rights under the Plan, (2) the
number and kind of shares subject to outstanding Options and Awards, and Limited
Stock Appreciation Rights, and (3) the option price with respect to any of the
foregoing and/or, if deemed appropriate, make provision for a cash payment to a
Participant, including to reflect such an event occurring prior to an Option or
Award, the grant of which was intentionally deferred in anticipation of such
event; provided, however, that the number of shares subject to any Option or
Award shall always be a whole number.

                                       4

<PAGE>   5
     SECTION 5.  ELIGIBILITY AND EXTENT OF PARTICIPATION.

     (a)  The persons eligible to receive Awards, Options and associated Limited
Stock Appreciation Rights under the Plan shall consist of employees or
prospective employees of the Company and consultants or advisors of the Company,
other than any person who is an "executive" of the Company within the meaning of
Rule 312 under the New York Stock Exchange Listed Company Manual. For purposes
of the administration of previously granted Options and Awards, the term
"Participant" shall also include a former Participant and any permitted
transferee (including any trust, partnership or estate) of a Participant or
former Participant.

     (b)  Subject to the limitations of the Plan, the Committee shall, after
such consultation with and consideration of the recommendations of management as
the Committee considers desirable, select from eligible persons those
Participants to be granted Options and Awards and determine the time when each
Option and Award shall be granted, the number of shares subject to each Option
and Award and whether Limited Stock Appreciation Rights should be granted in
connection with such Option, the number of shares for each Award and the
restrictions associated with such Award. Subject to the provisions of Section 4,
both Options and Awards may be granted to the same Participant.

     SECTION 6.  GRANTS OF OPTIONS AND LIMITED STOCK APPRECIATION RIGHTS.

     (a)  GRANT OF OPTIONS. Options on shares of Common Stock may be granted to
Participants by the Committee from time to time at its sole discretion. Each
Option grant shall contain such terms and conditions as may be approved by the
Committee. Subject to the terms of the Plan, the Committee may establish
provisions regarding (1) the number of shares of Common Stock which may be
issued upon exercise of the Option, (2) the purchase price of the shares of
Common Stock and the means of payment for the shares of Common Stock, (3) the
term of the Option, (4) such terms and conditions of exercisability as may be
determined from time to time by the Committee, (5) restrictions on the transfer
of the Option and forfeiture provisions, and (6) such further terms and
conditions, in each case not inconsistent with the Plan as may be determined
from time to time by the Committee. The grant of an Option shall not constitute
or be evidence of any agreement or other understanding, express or implied, on
the part of the Company or any Subsidiary to employ an individual for any
specific period.

     (b)  GRANT OF LIMITED STOCK APPRECIATION RIGHTS IN THE EVENT OF CHANGE OF
OWNERSHIP. If deemed by the Committee to be in the best interests of the
Company, any Option granted on or after the effective date of the Plan may
include a Limited Stock

                                       5
<PAGE>   6
Appreciation Right at the time of grant of the Option; also, the Committee may
grant a Limited Stock Appreciation Right with respect to any unexercised Option
at any time after granting such Option prior to the end of its term, provided
such Option was granted after the effective date of the Plan. Unless otherwise
specified, any reference in this Plan to an Option or Options shall include any
associated Limited Stock Appreciation Right. Such Limited Stock Appreciation
Rights shall be subject to such terms and conditions not inconsistent with the
Plan as the Committee shall impose, provided that:

     (1)  A Limited Stock Appreciation Right shall be exercisable only during
          the ninety-one (91) day period specified in the last sentence of
          Section 9(a); and

     (2)  A Limited Stock Appreciation Right shall, upon its exercise, entitle
          the optionee to whom such Limited Stock Appreciation Right was granted
          to receive an amount of cash equal to the amount by which the "Offer
          Price per Share" (as such term is hereinafter defined) shall exceed
          the exercise price of the associated Option, multiplied by the number
          of shares of Common Stock with respect to which such Limited Stock
          Appreciation Right shall have been exercised. Upon the exercise of a
          Limited Stock Appreciation Right, any associated Option shall cease to
          be exercisable to the extent of the shares of Common Stock with
          respect to which such Limited Stock Appreciation Right was exercised.
          Upon the exercise or termination of an associated Option, any related
          Limited Stock Appreciation Right shall terminate to the extent of the
          shares of Common Stock with respect to which such associated Option
          was exercised or terminated.

          The term "Offer Price per Share" as used in this Section 6(b) shall
          mean with respect to a Limited Stock Appreciation Right the higher of
          (i) the fair market value per share of Common Stock on the date of
          exercise of such Limited Stock Appreciation Right or (ii) the highest
          price per share for Common Stock paid or to be paid in the
          transaction, if any, giving rise to the event specified in clauses (1)
          or (2) (as the case may be) of Section 9(a) which triggered the
          exercisability of such Limited Stock Appreciation Right. For purposes
          of clause (ii) above, any securities or property which are part of the
          consideration paid or to be paid in such transactions shall be valued
          in determining the Offer Price per Share at the highest of (A) the
          valuation placed on such securities or property by the company, person
          or other entity engaging in such transaction, or (B) the valuation
          placed on such securities or property by the Committee.

                                       6
<PAGE>   7
     (c)  OPTION PRICE.

     (1)  The price at which each share of Common Stock may be purchased upon
          exercise of a particular Option shall be as specified by the
          Committee, in its sole discretion, but in no event shall the exercise
          price be less than 100% of the fair market value of a share of Common
          Stock at the time such Option is granted, except that (i) in the event
          that an optionee is required to make a payment or to forego the
          receipt of other compensation pursuant to paragraph (c)(3) below prior
          to receiving such Option, the exercise price per share of Common Stock
          of such Option shall not be less than 100% of the fair market value of
          a share of Common Stock at the time such Option is granted less the
          purchase price per share of Common Stock of such Option, and (ii) the
          Committee may specifically provide that the exercise price of an
          Option may be higher or lower in the case of an Option granted to
          employees of a company acquired by the Company in assumption and
          substitution of options held by such employees at the time such
          company is acquired.

     (2)  Unless approved by shareholders and subject to adjustment pursuant to
          Section 4(c), the exercise price of any Option previously awarded
          under the Plan may not be adjusted downward, whether through
          amendment, cancellation or replacement grants, or by any other means.

     (d)  EXERCISE.

     (1)  Each Option shall be exercisable at such times and subject to such
          terms and conditions as the Committee may, in its sole discretion,
          specify, provided, however, that in no event may any Option granted
          hereunder be exercisable after the expiration of 15 years from the
          date of such grant. Subject to the foregoing, each Option grant shall
          specify the effect thereon of the death, retirement or other
          termination of employment of the optionee. In addition, the Committee
          may impose such other conditions with respect to the exercise of
          Options, including without limitation, any relating to the application
          of Federal or state securities laws, as it may deem necessary or
          advisable.

     (2)  No shares shall be delivered pursuant to any exercise of an Option
          until the Participant has made payment in full of the option price
          therefor or provision for such payment satisfactory to the Committee.
          The exercise price of an Option may be paid in cash or certified or
          cashiers' check or by delivery (either actually or by attestation) of
          shares of Common Stock that

                                       7
<PAGE>   8
          have been acquired or held by the Participant in such manner as to not
          result in an accounting charge. To the extent authorized by the
          Committee, either at the time of grant or at the time of exercise of
          an Option, the exercise price of an Option also may be paid through
          one of more of the following: (i) shares of capital stock of the
          Corporation, (ii) other property deemed acceptable by the Committee,
          (iii) a reduction in the number of shares or other property otherwise
          issuable pursuant to such Option, (iv) a promissory note of or other
          commitment to pay by the Participant or of a third party, the terms
          and conditions of which shall be determined by the Committee, or (vi)
          any combination of the foregoing. No optionee or the legal
          representative, legatee or distributee of an optionee shall be deemed
          to be a holder of any shares subject to any Option prior to the
          issuance of such shares upon exercise of such Option.

     (e)  TRANSFERABILITY OF OPTIONS. Unless the documents evidencing the grant
of an Option (or an amendment thereto authorized by the Committee) expressly
states that the Option is transferable, no Option granted under the Plan may be
sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred
in any manner, other than by will or the laws of descent and distribution.

     SECTION 7.  PERFORMANCE STOCK AWARDS AND RESTRICTED STOCK AWARDS.

     (a)  PERFORMANCE STOCK AWARDS. Subject to the terms of this Plan,
Performance Stock Awards may be granted to Participants by the Committee from
time to time at its sole discretion. Performance Stock Awards shall consist of
an award of shares of Common Stock, the grant, issuance, retention and/or
vesting of which shall be subject to such Performance Objectives, and to such
further terms and conditions as the Committee deems appropriate. Each
Performance Stock Award shall contain provisions regarding (1) the number of
shares of Common Stock subject to such Award or a formula for determining such,
(2) the performance criteria and level of achievement versus these criteria
which shall determine the number of shares of Common Stock granted, issued,
retainable and/or vested, (3) the period as to which performance shall be
measured for determining achievement of such performance criteria (a
"Performance Period"), (4) forfeiture provisions, and (5) such further terms and
conditions, in each case not inconsistent with the Plan as may be determined
from time to time by the Committee. The grant, issuance, retention and/or
vesting of each Performance Stock Award shall be subject to such performance
criteria and level of achievement versus these criteria as the Committee shall
determine, which criteria may be based on financial performance and/or personal
performance evaluations. Notwithstanding anything in this Plan to the contrary,
Performance Stock Awards may provide that upon satisfaction of Performance
Objectives the shares subject to the Award are subject to such further holding
periods and/or restrictions on transferability as the Committee may provide.

                                       8
<PAGE>   9
     (b)  RESTRICTED STOCK AWARDS. Subject to the terms of this Plan, Restricted
Stock Awards may be granted to Participants by the Committee from time to time
at its sole discretion. Restricted Stock consists of shares of Common Stock
which are registered or are issuable by the Company in the name of a Participant
in exchange for such cash or other consideration, if any, as determined by the
Committee. Restricted Stock shall be subject during specified periods of time to
such conditions to vesting, to restrictions on their sale or other transfer by
the Participant and/or to repurchase rights as may be determined by the
Committee, consistent with the terms of the Plan. The transfer and sale of
shares of Common Stock pursuant to Restricted Stock Awards shall be subject to
the following terms and conditions:

     (1)  The number of shares of Common Stock to be transferred or sold by the
          Company to a Participant pursuant to a Restricted Stock award shall be
          determined by the Committee.

     (2)  Subject to the requirements of applicable law, the Committee shall
          determine the price, if any, at which shares of Restricted Stock shall
          be sold or awarded to a Participant, which may vary from time to time
          and among Participants and which may be below the fair market value of
          such Shares at the date of grant or issuance.

     (3)  All shares of Common Stock transferred or sold as Restricted Stock
          hereunder shall be subject to such restrictions or conditions as the
          Committee may determine, including, without limitation any or all of
          the following: (i) a prohibition against the sale, transfer, pledge or
          other encumbrance of the Shares, such prohibition to lapse at such
          time or times as the Committee shall determine (whether in annual or
          more frequent installments, at the time of the death, disability or
          retirement of the holder of such Shares, or otherwise); (ii) a
          requirement that the holder of shares of Common Stock forfeit or
          resell back to the Company at a price specified by the Committee
          (which price may be more than the price, if any, paid by the
          Participant for such Shares) all or part of such shares of Common
          Stock in the event of termination of employment during any period in
          which such shares of Common Stock are subject to conditions; (iii)
          such other conditions or restrictions as the Committee may deem
          advisable; and (iv) any applicable Performance Objectives which, if
          achieved, shall cause acceleration of the lapsing of restrictions
          imposed upon all or part of the shares covered by the Restricted Stock
          Award.

Once established, Performance Objectives and the terms under which the lapsing
of restrictions may be accelerated may be changed, adjusted or amended by the
Committee in its sole discretion. Notwithstanding anything in this Plan to the
contrary,

                                       9
<PAGE>   10
Restricted Stock Awards may provide that upon the lapsing of restrictions set
forth above, the shares subject to the Award may be subject to such further
holding periods and/or restrictions on transferability as the Committee may
provide.

     (c)  RIGHTS WITH RESPECT TO SHARES. Unless the terms of the Award provide
otherwise, unless and until forfeited pursuant to the terms of this Plan or the
Award, a Participant shall have the right to vote and to receive dividends and
other distributions on shares subject to a Performance Stock Award or Restricted
Stock Award, subject, however, to the terms, conditions and restrictions
described in this Plan and the Award.

     (d)  ESCROW. Shares of Common Stock issued pursuant to a Performance Stock
Award or Restricted Stock Award may be held in escrow by the Company until such
time as the Committee shall have determined that the restrictions set forth in
Section 7 have lapsed or until the shares subject to such Performance Stock
Award or Restricted Stock Award are forfeited pursuant to their terms.

     (e)  RESTRICTIVE LEGENDS. Certificates for shares of Common Stock delivered
pursuant to Performance Stock Awards or Restricted Stock Awards may bear an
appropriate legend referring to the terms, conditions and restrictions described
in this Plan and in the applicable Award. Any attempt to dispose of any such
shares of Common Stock in contravention of the terms, conditions and
restrictions described in this Plan or in the applicable Award shall be
ineffective. Any shares of Common Stock of the Company or other property,
including cash, received by a Participant as a dividend or as a result of any
stock split, combination, exchange of shares, reorganization, merger,
consolidation or similar event with respect to shares of Common Stock received
pursuant to a Performance Stock Award or Restrictive Stock Award shall have the
same status and bear the same legend and be held in escrow pursuant to Section
7(d) as the shares received pursuant to the Performance Stock Award or
Restricted Stock Award unless otherwise determined by the Committee at the time
of such event.

     (f)  DESIGNATION OF BENEFICIARIES. A Participant may designate a
beneficiary or beneficiaries to receive such Participant's Common Stock
hereunder in the event of such Participant's death, and may, at any time and
from time to time, change any such beneficiary designation. All beneficiary
designations and changes therein shall be in writing and shall be effective if
and when delivered to the Committee during the lifetime of the Participant.

     (g)  DISCRETIONARY ADJUSTMENTS. Notwithstanding satisfaction of any
Performance Objectives, the number of shares of Common Stock granted, issued,
retainable and/or vested under a Performance Stock Award on account of either
financial performance or personal performance evaluations may be reduced by the
Committee on the basis of

                                       10

<PAGE>   11
such further considerations as the Committee in its sole discretion shall
determine. The Committee may make adjustments or modifications, and its
determination thereof shall be conclusive, in any applicable Performance
Objectives to give effect to the intent of this Plan in connection with any
event affecting the performance criteria established as the Performance
Objectives, including without limitation, any reorganization, recapitalization,
merger, consolidation, offering of additional shares of Common Stock or other
change in the Company's shareholders' equity by means other than earnings, or
any similar event. The grant of an Award shall not constitute or be evidence of
any agreement or other understanding, express or implied, on the part of the
Company or any Subsidiary to employ an individual for any specific period.

     SECTION 8.  STOCK UNIT AWARDS.

     (a)  GRANT OF STOCK UNIT AWARDS. The Committee shall have authority to
grant to Participants Stock Unit Awards, the value of which is based, in whole
or in part, on the value of Common Stock. Each "Stock Unit" shall consist of a
bookkeeping entry representing an amount equivalent to the fair market value of
one share of Common Stock. Such Stock Units represent an unfunded and unsecured
obligation of the Company, except as otherwise provided for by the Committee.
Stock Units may be granted as additional compensation or in lieu of any other
compensation, as specified by the Committee, or may be issued upon exercise of
Options, or in lieu of a Performance Stock Award or Restricted Stock Award,
provided that for any Common Stock to be purchased in connection with a Stock
Unit Award other than upon exercise of an Option or in settlement of a
Performance Stock Award or Restricted Stock Award, the purchase price or the
amount of consideration paid or of other compensation foregone shall be equal to
at least 100% of the fair market value of such Common Stock on the date such
Award is granted. Subject to the provisions of the Plan, Stock Unit Awards shall
be subject to such terms, restrictions, conditions, vesting requirements and
payment rules as the Committee may determine in its sole discretion.

     (b)  TRANSFERABILITY OF STOCK UNITS. Unless the Stock Unit Award (or an
amendment thereto authorized by the Committee) expressly states otherwise, any
shares of Common Stock which are part of a Stock Unit Award shall not be
assigned, sold transferred, pledged or otherwise encumbered before the date on
which the shares are issued.

     (c)  SETTLEMENT OF STOCK UNITS. Unless provided otherwise by the Committee,
settlement of Stock Units shall be made by issuance of Common Stock and shall
occur within 60 days after a Participant's termination of employment for any
reason. The Committee may provide for Stock Units to be settled in cash (at the
election of the Company or the Participant, as specified by the Committee) and
to be made at such other times as it determines appropriate or as it permits a
Participant to choose. The

                                       11

<PAGE>   12
amount of shares of Common Stock, or other settlement medium, to be so
distributed may be increased by an interest factor or by dividend equivalents,
which may be valued as if reinvested in Common Stock. Until a Stock Unit is
settled, the number of shares of Common Stock represented by a Stock Unit shall
be subject to adjustment pursuant to Section 4(d).

     SECTION 9.  SPECIAL RULES.

     (a)  Notwithstanding anything to the contrary in this Plan, unless
otherwise specifically determined by the Committee (regardless of whether at the
time of grant, at the time of a possible Change of Ownership, or otherwise) all
Options theretofore granted and not fully exercisable shall become exercisable
in full and the restrictions on all outstanding Awards shall lapse upon the
occurrence of a Change of Ownership. A "Change of Ownership" shall be deemed to
have occurred if either (1) individuals who, as of the effective date of this
Plan, constitute the Board of Directors of the Company (the "Board of Directors"
generally and as of the date hereof the "Incumbent Board") cease for any reason
to constitute at least a majority of the directors constituting the Board of
Directors, provided that any person becoming a director subsequent to the
effective date of this Plan whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least three-quarters (3/4)
of the then directors who are members of the Incumbent Board (other than an
election or nomination of an individual whose initial assumption of office is
(i) in connection with the acquisition by a third person, including a "group" as
such term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the "Act"), of beneficial ownership, directly or indirectly, of 20% or
more of the combined voting securities ordinarily having the right to vote for
the election of directors of the Company (unless such acquisition of beneficial
ownership was approved by a majority of the Board of Directors who are members
of the Incumbent Board), or (ii) in connection with an actual or threatened
election contest relating to the election of the directors of the Company, as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Act)
shall be, for purposes of this Plan, considered as though such person were a
member of the Incumbent Board, or (2) the Board of Directors (a majority of
which shall consist of directors who are members of the Incumbent Board) has
determined that a Change of Ownership triggering the exercisability of Options
and the lapse of restrictions on Awards as described in this Section 10 shall
have occurred. Options which become fully exercisable by reason of events
specified in clauses (1) or (2) shall remain exercisable for 90 days following
the date on which they become so exercisable, after which they will revert to
being exercisable in accordance with their original terms, provided, however,
that no Option which has previously been exercised or has expired or otherwise
terminated shall become exercisable by virtue of this Section nor shall this
Section

                                       12
<PAGE>   13
permit exercise of any option during the portion, if any, of such 90 day period
which follows the termination or expiration of any such Option.

     (b)  For purposes of this Plan and any Option or Award hereunder,
termination of employment shall not be deemed to occur upon the transfer of any
optionee from the employ of the Company to the employ of any Subsidiary or
affiliate. For purposes of this Plan, "affiliate" means (1) any entity 50% or
more of the voting interest in which is owned, directly or indirectly, by an
entity which owns, directly or indirectly, 50% or more of the voting interest in
the Company and (2) any entity which owns, directly or indirectly, 50% or more
of the voting interest in the Company.

     SECTION 10.  DELIVERY OF SHARES. No shares of Common Stock shall be
 delivered pursuant to an Award or any exercise of an Option until the
requirements of such laws and regulations as may be deemed by the Committee
to be applicable thereto are satisfied.

     SECTION 11.  TAX WITHHOLDING.

     (a)  WITHHOLDING OF TAXES. As a condition to the making of an Award, to the
lapse of the restrictions pertaining to an Award, or to the delivery of shares
in connection with the exercise of an Option, the Company may require the
Participant to pay to the Company, or make arrangements satisfactory to the
Committee regarding payment of, any taxes of any kind required by law to be
withheld with respect to such shares of Common Stock.

     (b)  WITHHOLDING OF SHARES.

     (1) If requested by a Participant who acquires shares of Common Stock upon
         the exercise of an Option or who has received Common Stock pursuant to
         an Award with respect to which the restrictions shall have lapsed, the
         Committee may in its discretion permit the Participant to satisfy any
         tax withholding obligations, in whole or in part, by having the
         Company withhold a portion of such shares with a value equal to the
         amount of taxes required by law to be withheld.

     (2) Requests by a Participant to have shares of Common Stock withheld shall
         be (i) made prior to the Tax Date and (ii) irrevocable.

     SECTION 12.  AMENDMENTS, SUSPENSION OR DISCONTINUANCE.  The Board of
Directors or the Committee may amend, suspend or discontinue the Plan or any
Option or Award granted under the Plan.

                                       13
<PAGE>   14
     SECTION 13.  TERM OF PLAN. The Plan shall become effective on the date it
is approved and adopted by the Board. No Option or Award shall be granted under
the Plan after the date that is ten (10) years after the date on which the Plan
is approved and adopted by the Board or after such earlier date as the Committee
may decide, in its sole discretion.

     SECTION 14.  OPTION GRANTS BY SUBSIDIARIES. In the case of a grant of an
option to any Participant by a Subsidiary, such grant may, if the Committee so
directs, be implemented by the Corporation issuing any subject shares to the
Subsidiary, for such lawful consideration as the Committee may determine, upon
the condition or understanding that the Subsidiary will transfer the shares
to the optionholder in accordance with the terms of the option specified by the
Committee pursuant to the provisions of the Plan. Notwithstanding any other
provision hereof, such option may be issued by and in the name of the Subsidiary
and shall be deemed granted on such date as the Committee shall determine.

     SECTION 15.  NON-EXCLUSIVITY OF THE PLAN. The adoption of the Plan by the
Board shall not be construed as creating any limitations on the power of the
Board or the Committee to adopt such other incentive arrangements as it or they
may deem desirable, including without limitation, the granting of restricted
stock or stock options otherwise than under the Plan, and such arrangements
may be either generally applicable or applicable only in specific cases.

                                       14

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