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                                                                   EXHIBIT 10.22

                                 TRUST AGREEMENT

                                     BETWEEN

                       KAUFMAN AND BROAD HOME CORPORATION

                                       AND

                               WACHOVIA BANK, N.A.

                                   AS TRUSTEE

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                                 TRUST AGREEMENT

                      DATED AS OF AUGUST 27, 1999, BETWEEN

                        KAUFMAN & BROAD HOME CORPORATION

                                       AND

                         WACHOVIA BANK, N.A., AS TRUSTEE

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>             <C>
SECTION 1       Definitions.................................................   4
SECTION 2       Establishment of the Trust..................................   6
        2.1     Trust Fund..................................................   6
        2.2     Irrevocability..............................................   7
        2.3     Claims of Creditors.........................................   7
SECTION 3       Acceptance by the Trustee...................................   7
SECTION 4       Investment of the Trust.....................................   7
        4.1     General Duties of Trustee...................................   7
        4.2     Additional Powers of Trustee................................   9
SECTION 5       Establishment and Maintenance of Participant Schedule.......  11
        5.1     Form of Participant Schedule................................  11
        5.2     Maintaining the Participant Schedule........................  11
SECTION 6       Maintenance of the Trust....................................  11
        6.1     Trust Assets and Allocation to Plans........................  11
        6.2     Valuations of Trust and Accounts............................  11
        6.3     Trust Statements............................................  11
SECTION 7       Voting and Tender of Company Stock Held in Trust............  12
        7.1     Voting of Company Stock.....................................  12
        7.2     Tender Rights...............................................  12
        7.3     Notices and Information Statements..........................  13
SECTION 8       Distributions from the Trust................................  14
        8.1     Distribution of Company Stock from the Trust................  14
        8.2     Protection of Trustee.......................................  15
        8.3     Company Obligations.........................................  15
        8.4     Trustee as Holder of Legal Title to Trust Assets............  16
        8.5     Federal Income Tax Consequences of the Trust................  16
SECTION 9       Expenses, Compensation and Indemnification..................  16
        9.1     Compensation................................................  16
        9.2     Expenses....................................................  16
        9.3     Charge on Trust Fund........................................  16
        9.4     Indemnification.............................................  16
        9.5     Payment from Trust Fund.....................................  17
SECTION 10      Administration and Records..................................  17
        10.1    Records.....................................................  17
        10.1    Settlement of Accounts......................................  17
        10.3    Audit.......................................................  18
        10.4    Judicial Settlement.........................................  18
</TABLE>

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<TABLE>
<CAPTION>
<C>                <S>                                                        <S>
        10.5   Delivery of Records to Successor.............................. 18
        10.6   Tax Filings................................................... 18

SECTION 11     Removal or Resignation of the Trustee and Designation of
               Successor Trustee............................................. 19
        11.1   Removal....................................................... 19
        11.2   Resignation................................................... 19
        11.3   Successor Trustee............................................. 19

SECTION 12     Enforcement of the Trust Agreement............................ 19
        12.1   Rights of Parties to Enforce the Trust Agreement.............. 19
        12.2   Limitation on Rights of Participants, Beneficiaries and Other
               Affiliates.................................................... 20

SECTION 13     Termination................................................... 20
        13.1   Termination upon Specific Events.............................. 20
        13.2   Termination in Other Events................................... 20
        13.3   Limitation on Trustee Liability upon Total Distribution;
               Continuation of Trustee Powers................................ 21
        13.4   Nonapplicability of ERISA..................................... 21

SECTION 14     Amendment..................................................... 21
        14.1   Amendments in General......................................... 21
        14.2   Specific Amendments........................................... 22

SECTION 15     Nonalienation................................................. 22

SECTION 16     Communications................................................ 22
        16.1   To the Company, Board of Directors and Committee.............. 22
        16.2   To the Trustee................................................ 22
        16.3   To a Participant.............................................. 24
        16.4   Binding upon Receipt.......................................... 24
        16.5   Authority to Act.............................................. 24
        16.6   Authenticity of Instruments................................... 24

SECTION 17     Claims of Company's Bankruptcy Creditors...................... 24
        17.1   Bankruptcy Creditors.......................................... 24
        17.2   Resumption of Benefits, Restoration of Accounts............... 25

SECTION 18     Consolidation, Merger or Sale of the Company.................. 25
SECTION 19     Miscellaneous Provisions...................................... 25
        19.1   Binding Effect................................................ 25
        19.2   Inquiry as to Authority....................................... 25
        19.3   Responsibility for Company Action............................. 26
        19.4   Successor to Trustee.......................................... 26
        19.5   Intercompany Agreements....................................... 26
        19.6   Titles Not to Control......................................... 26
        19.7   Laws of the State of Delaware to Govern....................... 26
        19.8   Fractional Shares............................................. 26
        19.9   Counterparts.................................................. 26

SCHEDULE A     List of Plans and Administrators
SCHEDULE B     Trustee's Compensation Schedule
SCHEDULE C     Form of Promissory Note
</TABLE>

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     This TRUST AGREEMENT is made and entered into as of August 27, 1999 (the
"Effective Date") by and between Kaufman and Broad Home Corporation, a
corporation organized under the laws of the State of Delaware (the "Company"),
Wachovia Bank, N.A., a national banking association, organized under the laws of
the United States of America (the "Trustee").

                              W I T N E S S E T H:

     WHEREAS, the Company is the sponsor of various  non-qualified  and
qualified employee  benefit plans  and  arrangements  for the  benefit  of some
or all of the  employees  of the  Company  and  certain  of its subsidiaries and
affiliates and may from time to time adopt one or more additional plans or
arrangements;

     WHEREAS, the  Company  and its  subsidiaries  or  affiliates  have and will
have  certain  legal obligations under these employee benefit plans or
arrangements;

     WHEREAS, the Company wishes to establish a trust to assist it in meeting
certain of these obligations and to make contributions for the benefit of its
subsidiaries or affiliates and intends to make contributions and/or loans to
such trust at such time or times and in such amount or amounts as it may
determine;

     WHEREAS, the Company intends that such contributions shall be held by the
Trustee and, if other than in the form of common stock of the Company, used for
the purpose of acquiring common stock of the Company and making payments with
respect to loans used to acquire common stock of the Company all in accordance
with the provisions of this Trust Agreement;

     WHEREAS, the Company  intends  that any loans made to the  Trustee by the
Company  shall be used for the  exclusive  purpose of acquiring  common stock of
the Company in  accordance  with the  provisions  of this Trust Agreement;

     WHEREAS, inasmuch  as the income  and corpus of such trust may and will be
applied in  discharge of the legal  obligations of the Company,  and for the
benefit of the Company's  subsidiaries and affiliates,  such trust is intended
to be a "grantor trust" within the meaning of Section 671 of the Code; and

     WHEREAS, the Company  intends that the assets of such trust at all times
shall be subject to the claims of bankruptcy and other general creditors of the
Company as provided in Section 17 of this Trust Agreement;

     NOW, THEREFORE,  in consideration of the mutual covenants herein contained,
the Company and the Trustee declare and agree as follows:

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SECTION 1  DEFINITIONS.

     As used in this Trust Agreement, the following definitions apply to the
terms indicated below:

     1.1 "Administrator" or "Administrators" shall refer to the Committee,
          Company official(s) or other persons listed in Schedule A charged with
          responsibility for overseeing and administering the Plans and
          provision of Benefits.

     1.2 "Affiliate" shall refer to any direct or indirect subsidiary related by
          direct or indirect stock ownership of the Company that has adopted a
          Plan while each such entity is a Subsidiary of the Company.

     1.3 "Beneficiary"  shall mean any person entitled to receive  benefits
          under any Plan on the death of a Participant.

     1.4 "Benefits" shall mean amounts that the Company or an Affiliate has an
          obligation to pay to Participants pursuant to any Plan under which the
          Company has a legal obligation to (a) pay from its general assets,
          (b) provide for the payment of by making contributions from its
          general assets, or (c) deliver in shares of Company Stock.

     1.5 "Board of Directors" shall mean the Board of Directors of the Company.

     1.6 "Code" shall mean the Internal Revenue Code of 1986 as it may be
          amended from time to time.

     1.7 "Committee" shall mean such committee as the Board of Directors shall
          appoint from time to time to provide instructions to the Trustee as
          provided herein. The Committee shall consist of three or more persons.
          The members of the Committee will be certified to the Trustee by the
          Secretary or Assistant Secretary of the Company. The Committee will
          initially be comprised of the Chief Financial Officer, Secretary, and
          Treasurer of the Company and shall remain so comprised until its
          composition is changed by the Board of Directors.

     1.8 "Company Stock" shall mean the common stock of the Company, par value
          $1.00 per share.

     1.9 "Daily Value" shall mean, with respect to a share of Company Stock, the
          closing reported sales price per share of Company Stock on the New
          York Stock Exchange Composite Tape, or if Company Stock is not traded
          on such stock exchange, the principal national securities exchange on
          which Company Stock is traded, or if not so traded, the mean between
          the highest bid and lowest asked quotation on the over-the-counter
          market as reported by the National Quotations

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Bureau, or any similar organization, on any relevant date, or if not so
reported, as determined by the Committee in a manner consistently applied.

     1.10 "Eligible Participant" shall mean a Participant who is an Employee
and who, as of the date upon which Eligible Participants are determined, (a) is
a Participant in one of the Stock Option Plans (b) is not a member of the Board
of Directors.

     1.11 "Employee" shall mean any individual who is actively employed by the
Company or an Affiliate.

     1.12 "ERISA" shall mean the Employee  Retirement  Income Security Act of
1974, as amended from time to time.

     1.13 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.

     1.14 "401(k)  Plan" shall mean the  Kaufman and Broad Home  Corporation
Amended and  Restated  401(k) Plan.

     1.15 "Other  Assets" shall mean any asset or investment  aside from cash
held by the Trust that is not Company Stock.

     1.16 "Participant  Schedule"  shall  mean the  schedule  prepared  by the
Company  from  time to time pursuant to Section 5.

     1.17 "Participants" shall mean those individuals who participate in one or
more of the Plans.

     1.18 "Plans" shall mean the plans or  arrangements  referred to in
Schedule A, as amended from time to time.

     1.19 "Stock Option Plans" shall mean the Company's (a) 1999 Incentive Plan,
(b) 1988 Employee Stock Plan, (c) Performance Based Incentive Plan for Senior
Management, (d) 1998 Stock Incentive Plan, or (e) 1986 Stock Option Plan, as
each Stock Option Plan may be amended from time to time, or such successor or
substitute stock incentive or option plan as may be listed on Schedule A from
time to time by the Company.

     1.20 "Specified Investments" shall mean (a) direct obligations of the
United States of America and agencies thereof for which the full faith and
credit of the United States is pledged or mutual funds, the sole assets of which
are such investments, (b) obligations fully guaranteed by the United States of
America or mutual fund, the sole assets of which are such investments, (c)
certificates of deposit issued by, or banker's acceptances of, or time deposits
with, any bank, trust company or national banking association incorporated or
doing business under the laws of the United States of America or one of the
states thereof having

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combined capital and surplus and retained earnings of at least $500,000,000
(including the Trustee if such conditions are met), (d) commercial paper of
companies, banks, trust companies or national banking associations incorporated
or doing business under the laws of the United States of America or one of the
states thereof and in each case having a rating assigned to such commercial
paper by Standard & Poor's Corporation or Moody's Investors' Service, Inc. (or,
if neither such organization shall rate such commercial paper at any time, by
any nationally recognized rating organization in the United States of America)
equal to the highest rating assigned by such organization, and (e) repurchase
agreements with any financial institution having a combined capital and surplus
of at least $750,000,000 fully collateralized by obligations of the type
described in clauses (a) through (d) above; PROVIDED that, if all of the above
investments are unavailable, the entire amount to be invested may be used to
purchase Federal Funds from an entity described in clause (c) above; and
provided further that no investment shall be eligible as a "Specified"
Investment" unless the final maturity or date of return of such investment is
12 months or less from the date of purchase thereof.

     1.21 "Subsidiary" shall mean any corporation of which a majority of the
total voting power of its outstanding voting securities, or any partnership,
limited liability company, joint venture, or other entity of which a majority of
the partnership interests, membership or manager interests, or other similar
equity interests thereof, is owned, directly or indirectly by the Company.

     1.22 "Trust"  shall mean the  Kaufman  and Broad Home  Corporation
Grantor  Stock  Trust  established pursuant to this Trust Agreement.

     1.23 "Trust Fund" shall mean all Company Stock, money and other property
from time to time obtained by the Trust and all investments and reinvestments
made therewith or proceeds thereof and all earnings and profits thereon, less
all payments and charges as authorized herein.

SECTION 2  ESTABLISHMENT OF THE TRUST.

     2.1  TRUST FUND. The Company hereby establishes the Kaufman and Broad Home
Corporation Grantor Stock Trust. The Trust Fund shall consist of such sums of
Company Stock, money, and other property acceptable to the Trustee as are from
time to time paid to or otherwise acquired by the Trustee. Subject to Section
8.1(a) as to deemed forgiveness of debt, the Company shall have no duty or
obligation to make any contributions to the Trust, and the Trustee shall have no
duty or obligation to require the Company to make any contribution to the Trust.
The Trust Fund shall be held by the Trustee in trust and shall be dealt with in
accordance with the provisions of this Trust Agreement. The Trustee, and any
successor Trustee appointed pursuant to Section 11 hereof or resulting under
Subsection 19.4 hereof, shall at all times be a bank and trust company or other

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national banking association that is neither a subsidiary of, nor other firm
related by direct or indirect stock ownership to, the Company.

     2.2  IRREVOCABILITY. This trust shall be irrevocable. Except as provided in
Section 17 hereof, the Trust shall be for the exclusive purpose of assisting the
Company in providing for the payment of Benefits and defraying expenses of the
Trust in accordance with the provisions of this Trust Agreement. No part of the
income or corpus of the Trust Fund shall be recoverable by the Company;
PROVIDED, HOWEVER, that the Trust Fund shall be applied in discharge of the
Company's legal obligations as provided in this Trust Agreement.

     2.3  CLAIMS OF CREDITORS. Notwithstanding anything in this Trust Agreement
or the Plans to the contrary, the Trust Fund shall at all times be subject to
the claims of bankruptcy and other general creditors of the Company as provided
in Section 17 hereof. No Participant, Affiliate, or Plan shall have any claim
against the Trust Fund or Trustee.

SECTION 3  ACCEPTANCE BY THE TRUSTEE.

     The Trustee accepts the Trust established under this Trust Agreement on the
terms and subject to the provisions set forth herein. The Trustee agrees to
discharge and perform fully and faithfully all of the duties and obligations
imposed upon it under this Trust Agreement.

SECTION 4  INVESTMENT OF THE TRUST.

     4.1  GENERAL DUTY OF TRUSTEE. Except as otherwise provided in this
Subsection 4.1 or except as otherwise expressly provided in this Trust
Agreement, all assets received by the Trustee other than Company Stock shall be
invested as soon as practicable, and remain invested, in Company Stock.

          (a)  The Trustee shall not invest any cash contributed to the Trust
     (other than cash contributed to repay loans to the Trust) in any investment
     other than Company Stock, except that cash contributions may be invested in
     Specified Investments on a temporary basis with the approval of the
     Committee.

          (b)  From time to time, the Trustee shall have the ability, with the
     approval of the Committee, to borrow funds for the purpose of acquiring
     shares of Company Stock and/or to issue one or more notes to the Company
     (together with the payment of cash for the aggregate par value) in exchange
     for newly issued shares of Company Stock or in exchange for cash to be used
     to purchase Company Stock on the open market. The Trustee shall have the
     ability to pledge any shares so acquired as collateral. Subject to the
     requirements of Subsection 8.1(d), the terms and conditions of any

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     borrowing shall be fair and reasonable. It is contemplated that any such
     obligation shall be repaid using cash contributions and earnings
     attributable to Company Stock held by the Trust Fund.

          (c)  The Company may transfer treasury shares of Company Stock to the
     Trust Fund; PROVIDED, that the Trustee must pay consideration for such
     treasury shares at least equal to the fair market value thereof in the form
     of a promissory note as set forth in Schedule C.

          (d)  Notwithstanding  anything  herein to the contrary,  unless
     the Committee  otherwise  directs,  cash (other than cash  proceeds of a
     loan and cash  received as  contributions  or as dividends  on Company
     Stock) or Other Assets  (other than Other Assets  received as  dividends on
     Company  Stock)  received by the Trustee shall be  retained  and  invested
     in Other  Assets,  PROVIDED,  HOWEVER,  that the Trust shall make no new
     investment in an Other Asset other than Specified  Investments,  and
     PROVIDED  FURTHER that, after payment of the costs of the Trust,
     including,  without limitation,  Trustee fees and expenses and, if
     applicable, debt  repayment  described in  Subsection  4.1(b),  through the
     end of the calendar year during which such cash or Other  Assets are
     received  by the  Trustee,  any such cash or Other  Assets  remaining
     shall be distributed by the Trustee to the  Administrators  at the end of
     such calendar year to provide for Company Matching Contributions under the
     401(k) Plan.

          (e)  Except as otherwise provided herein, dividends paid in cash on
     Company Stock held by the Trust shall be applied, immediately upon receipt
     thereof by the Trustee, first to pay interest and then to repay or pre-pay
     scheduled principal due under any loans to the Trust, which application
     shall be in the order such principal payments are due. In the event that
     dividends paid on Company Stock held in the Trust, other than extraordinary
     dividends, exceed the amount of scheduled principal and interest due in any
     Trust Year, such excess shall be distributed to the Administrator of the
     401(k) Plan for the purpose of making Company Matching Contributions and,
     to the extent not so needed, shall then be distributed to the
     Administrators for the purpose of paying compensation to any other broad
     cross-section of Participants, as determined in good faith by the
     Committee. Extraordinary dividends shall not be used to pay interest on or
     principal of any loans to the Trust, but shall be invested in additional
     Company Stock as soon as practicable. Dividends which are not in cash or in
     Company Stock (including extraordinary dividends, or portions thereof)
     shall be reduced to cash by the Trustee and reinvested in Company Stock as
     soon as practicable. For purposes of this Agreement, Company Stock
     purchased with the proceeds of an extraordinary dividend or with the
     proceeds of a non-cash dividend shall, for purposes of this, be
     deemed to have been acquired with the proceeds of the loan. In the
     Trustee's

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     discretion, investments in Company Stock may be made through open-market
     purchases, private transactions or (with Company's consent) purchases from
     the Company.

     4.2  ADDITIONAL POWERS OF TRUSTEE. Subject to the provisions of Section
4.1, the Trustee shall have the following additional powers and authority with
respect to all property constituting a part of the Trust Fund:

          (a)  To purchase securities or any other kind of property and to
     retain such securities or other property, regardless of diversification and
     without being limited to investments authorized by law for the investment
     of trust funds.

          (b)  Subject to Subsection 7.2 hereof, to sell, exchange or transfer
     any such property at public or private sale for cash or on credit and grant
     options for the purchase or exchange thereof.

          (c)  Subject to Section 7 hereof, to participate in any plan of
     reorganization, consolidation, merger, combination, liquidation or other
     similar plan relating to any such property, and to consent to or oppose any
     such plan or any action thereunder, or any contract, lease, mortgage,
     purchase, sale or other action by any corporation or other entity any of
     the securities of which may at any time be held in the Trust Fund, and to
     do any act with reference thereto.

          (d)  To deposit cash or any Other Assets with any protective,
     reorganization or similar committee; to delegate discretionary power to any
     such committee; and to pay part of the expenses and compensation of any
     such committee and any assessments levied with respect to any property so
     deposited.

          (e)  To exercise any conversion privilege or subscription right
     available in connection with any such property, and to do any act with
     reference thereto, including the exercise of options, the making of
     agreements or subscriptions and the payment of expenses, assessments or
     subscriptions, which may be deemed necessary or advisable in connection
     therewith, and to hold and retain any securities or other property which it
     may so acquire.

          (f)  Subject to Subsection 9.4 hereof, to commence or defend suits or
     legal proceedings and to represent the Trust in all suits or legal
     proceedings; to settle, compromise or submit to arbitration any claims,
     debts or damages, due or owing to or from the Trust; PROVIDED, HOWEVER,
     that except as to suits brought by the Trustee against the Company or
     against any other party to enforce an obligation of the Company under the
     Trust Agreement, suits may be commenced on behalf of the Trust only with
     the

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     prior approval of the Committee, and such prior approval shall not be
     unreasonably withheld.

          (g)  Subject to Section 7 hereof, to exercise, personally or by
     general or limited power of attorney, any right, including the right to
     vote, appurtenant to any securities or other such property.

          (h)  To hold cash awaiting investment uninvested, and to maintain such
     additional cash balances as it shall deem reasonable or necessary to meet
     anticipated cash distributions from or administrative costs of the Trust.

          (i)  To invest cash or Other Assets at Wachovia Bank, N.A. or another
     bank and trust company or national banking association in any type of
     interest-bearing investment, including, without limitation, deposit
     accounts, certificates of deposit and repurchase agreements.

          (j)  To invest and reinvest all or any specified portion of cash or
     Other Assets (i) through the medium of any common trust fund which has been
     or may hereafter be established and maintained by the Trustee, or (ii) in
     shares of open end or closed end investment companies, including companies
     for which the Trustee provides management or custodial services, PROVIDED
     that, prior to investing any portion of the Trust Fund for the first time
     in any such common trust fund or investment company, the Trustee shall
     advise the Company of its intent to make such an investment and furnish to
     the Company any information it may reasonably request with respect to such
     investment.

          (k)  To engage legal counsel, including counsel to the Company, or any
     other suitable agents, to consult with such counsel or agents with respect
     to the implementation or construction of this Trust Agreement, the duties
     of the Trustee hereunder, the transactions contemplated by this Trust
     Agreement or any act which the Trustee proposes to take or omit, to rely
     upon the advice of such counsel or agents, and to pay any such counsel's or
     agent's reasonable fees, expenses and compensation.

          (l)  To register or hold any securities or other property held by it
     in its own name or in the name of any custodian of such property or of its
     nominee, including the nominee of any system for the central handling of
     securities, with or without the addition of words indicating that such
     securities are held in a fiduciary capacity, to deposit or arrange for the
     deposit of any such securities with such a system and to hold any
     securities in bearer form.

          (m)  To make, execute and deliver, as Trustee, any and all deeds,
     leases, notes, bonds, guarantees, mortgages, conveyances, contracts,

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     waivers, releases or other instruments in writing that are necessary
     or proper for the accomplishment of any of the foregoing powers.

          (n)  Subject to Section 7 hereof, generally, to exercise any of the
     powers of an owner with respect to property held in the Trust Fund.

SECTION 5  ESTABLISHMENT AND MAINTENANCE OF PARTICIPANT SCHEDULE.

     5.1  FORM OF PARTICIPANT SCHEDULE. The Trustee may, from time to time,
request the Company to prepare and deliver to the Trustee in accordance with
Subsection 5.2 hereof, a schedule that sets forth the name of each Participant
entitled to receive a Benefit under a Plan or such group of Participants that
the Trustee may need to know in order to carry out the provisions of this
Agreement.

     5.2  MAINTAINING THE PARTICIPANT SCHEDULE. At the request of the Trustee,
the Company shall from time to time update the Participant Schedule. Each
Participant Schedule shall state the date as of which it applies, and the
Trustee shall be entitled to rely upon such Participant Schedule, without a duty
of further inquiry, until it receives an updated Participant Schedule bearing a
later date. Each Participant Schedule shall contain all information concerning a
Participant that the Trustee will need to complete its responsibilities under
this Agreement.

SECTION 6  MAINTENANCE OF TRUST.

     6.1  TRUST ASSETS AND ALLOCATION TO PLANS. Subject to Sections 4.1 and 17,
the Trustee shall hold all assets contributed or otherwise obtained by the Trust
and shall distribute such assets and any earnings thereon to such Administrators
or Participants, as provided for and in accordance with this Trust Agreement or
use such assets to pay obligations of the Trust described in Section 9 or to
repay a loan described in Subsection 4.1(b).

     6.2  VALUATION  OF TRUST AND  ACCOUNTS.  The  Trustee  shall  revalue  the
Trust  Fund as of the last business  day of each  calendar  quarter.  Shares of
Company  Stock  shall be valued at the Daily  Value of Company Stock as of such
date.

     6.3  TRUST STATEMENTS. As provided in Section 10.2, the Trustee shall, at
the end of each calendar quarter, furnish a statement to the Company reflecting
the assets held in the Trust Fund and the value thereof within ten business days
after the receipt of all information necessary to produce such report.

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SECTION 7  VOTING AND TENDER OF COMPANY STOCK HELD IN TRUST.

     7.1  VOTING OF COMPANY STOCK.

          (a)  The Trustee shall vote (or abstain from voting) the shares of
     Company Stock held by the Trust in accordance with, and by soliciting and
     receiving, voting directions from or on behalf of Eligible Participants. As
     soon as practicable following the record date in question, the Company
     shall deliver to the Trustee a Participant Schedule listing Eligible
     Participants determined as of such record date. Each Eligible Participant
     listed on such Participant Schedule shall have the right to direct the vote
     (or abstention) with respect to that number of shares of Company Stock held
     by the Trust as determined by the following formula: multiply the shares of
     Company Stock held by the Trust by a fraction for each Eligible Participant
     who has given voting instructions. The numerator of such fraction shall
     equal the total unexercised options granted pursuant to the Stock Option
     Plans held by such Eligible Participant; and the denominator of such
     fraction shall equal the total unexercised options granted pursuant to the
     Stock Option Plans held by all Eligible Participants who have given voting
     instructions.

          (b)  The Trustee shall devise and implement a procedure to assure
     confidentiality of any directions given by or on behalf of Eligible
     Participants in respect of votes. All actions taken by or on behalf of
     Eligible Participants pursuant to this Subsection 7.1 shall be held
     confidential by the Trustee and shall not be divulged or released to any
     person, other than (i) agents of the Trustee who are not affiliated with
     the Company or its Affiliates, (ii) by virtue of the execution by the
     Trustee of any proxy, consent or letter of transmittal for the shares of
     Company Stock held in the Trust, or (iii) as may be required by court
     order.

     7.2  TENDER RIGHTS.

          (a)  If any person shall commence a tender or exchange offer with
     respect to the Company Stock, the Trustee shall tender or exchange, or not
     tender or exchange, the shares of Company Stock held by the Trust as
     directed by or on behalf of Eligible Participants, determined as of the
     commencement of such tender or exchange offer, pursuant to the tender or
     exchange instructions solicited by the Trustee. The Trustee shall first
     divide the shares of Company Stock held in the Trust Fund into two equal
     blocks of shares of Company Stock to be known as the 401(k) Plan Block and
     the Stock Option Plans Block (with the odd share of stock, if any,
     allocated to the 401(k) Plan Block).

               (i)  The Trustee shall tender or exchange the shares
          of Company Stock held in the 401(k) Plan Block in the same proportions
          as shares of Company Stock held in the 401(k) Plan are tendered or

                                       12

<PAGE>   14
          exchanged and shall in making such tender or exchange rely on a
          certification from the Trustee of the 401(k) Plan as to the tender or
          exchange instructions that the participants in the 401(k) Plan have
          made with respect to shares of Company Stock allocated to their
          accounts in the 401(k) Plan.

               (ii) As soon as practicable following the commencement of such
          tender or exchange offer, the Company shall deliver to the Trustee a
          Participant Schedule listing the Eligible Participants determined as
          of the commencement of such tender or exchange offer. Each Eligible
          Participant listed on such Participant Schedule shall have the right
          to direct the tender or exchange of that number of shares of Company
          Stock held in the Stock Option Plan Block as determined by the
          following formula: multiply the shares of Company Stock held in the
          Stock Option Plan Block by a fraction for each Eligible Participant
          who has given tender or exchange instructions. The numerator of such
          fraction shall equal the total unexercised options granted pursuant to
          the Stock Option Plans held by such Eligible Participant; and the
          denominator of such fraction shall equal the total unexercised options
          granted pursuant to the Stock Option Plans held by all Eligible
          Participants who have given tender or exchange instructions.

          (b)  The Trustee shall devise and implement a procedure to assure the
     confidentiality of any directions given by or on behalf of Participants in
     response to such offers. All actions taken by or on behalf of Participants
     pursuant to this Subsection 7.2 shall be held confidential by the Trustee
     and shall not be divulged or released to any person, other than (i) agents
     of the Trustee who are not affiliated with the Company or its Affiliates,
     (ii) by virtue of the execution by the Trustee of any proxy, consent or
     letter of transmittal for the shares of Company Stock held in the Trust, or
     (iii) as may be required by court order.

     7.3  NOTICES AND INFORMATION STATEMENTS. The Company shall provide the
Trustee in a timely manner with notices and information statements (including
proxy statements) when voting or consent rights are to be exercised, and with
respect to tender, exchange or similar offers, notices and offer materials, at
the same time and in the same manner (except to the extent the Exchange Act
requires otherwise) as such notices, information statements, and offer materials
are provided to shareholders of the Company generally. The Trustee shall, in
turn, provide all material received pursuant to this Subsection 7.3 to Eligible
Participants described in Subsections 7.1 and 7.2, who do not otherwise receive
such material.

                                       13

<PAGE>   15

SECTION 8  DISTRIBUTIONS FROM THE TRUST.

     8.1  DISTRIBUTIONS OF COMPANY STOCK FROM THE TRUST. Except as otherwise
provided in Sections 13 or 17, all distributions of Company Stock from the Trust
shall be used to provide for the payment of Benefits. For shares acquired with
the proceeds of a loan, distributions of such shares of Company Stock from the
Trust shall be made in proportion to the principal payment made (or deemed
forgiven) with respect to the loan used to acquire such Company Stock described
in Subsection 4.1(b). For purposes of the foregoing, the proportion of the
principal payment made (or deemed forgiven) with respect to the loan shall be
determined by dividing the amount of the principal payment made (or deemed
forgiven) by the sum of such principal payment and the principal balance of the
loan remaining after such payment. For shares acquired by way of a contribution
of cash or Company Stock to the Trust, distributions of such shares of Company
Stock from the Trust shall be made in accordance with Section 8.1(b).

          (a)  RELEASE OF SHARES ACQUIRED WITH PROCEEDS OF A LOAN. Shares of
     Company Stock acquired with the proceeds of a loan shall be distributed
     from the Trust in accordance with the following directions: (i) to the
     extent available, shares of Company Stock sufficient to meet the current
     obligations of the Stock Option Plans in the order listed in Schedule A
     shall first be allocated to the Administrator of the Stock Option Plans in
     such order, and (ii) remaining shares of Company Stock (if any) to the
     extent available shall be transferred to the Administrator to assist the
     Company to meet the current obligations of the Company under the 401(k)
     Plan to fund Employee elections of Company Stock in the Investment Fund and
     then the Company Matching Contribution. If the earnings attributable to the
     shares of Company Stock acquired with the proceeds of such loan together
     with any contributions made by the Company for the purpose of repayment of
     such loan are not sufficient to enable the Trust to make a required
     repayment of principal under such loan that will cause a release and
     distribution of shares sufficient to provide for the payment of Benefits
     described in Subsections 8.1(a)(i) and (ii), then shares of Company Stock
     acquired by a contribution of cash or Company Stock to the Trust, to the
     extent available, shall be distributed in accordance with Section 8.1(b) to
     meet the Company's obligations to pay the Benefits described in Subsections
     8.1(a)(i) and (ii). If a deficiency still remains after making such
     distributions of shares under this Section 8.1(a) and Section 8.1(b), then
     repayment of principal shall be deemed forgiven by the Company to the
     extent necessary to cause a release and distribution of shares of Company
     Stock to satisfy such deficiency.

          (b)  RELEASE OF SHARES ACQUIRED BY A CONTRIBUTION OF CASH OR COMPANY
     STOCK TO THE TRUST. Subject to the provisions of Section 8.1(a), shares of
     Company Stock acquired by a contribution of cash or Company Stock to the
     Trust (including shares of Company Stock purchased by the Trustee with
     extraordinary dividends) shall be distributed by the Trustee to

                                       14
<PAGE>   16
     the extent necessary to meet the Company's current obligations under the
     Plans. Such shares of Company Stock released in any year shall first (i) be
     used to meet the current obligations under the Stock Option Plans in the
     order listed on Schedule A and shall be delivered by the Trustee to the
     Administrator of the Stock Option Plans in such order, and (ii) remaining
     shares of Company Stock (if any) to the extent available shall be
     transferred to the Administrator to assist the Company to meet the
     obligations of the Company under the 401(k) Plan to fund Employee elections
     of Company Stock in the Investment Fund and then the Company Matching
     Contribution. If at any time the Trust consists solely of shares of Company
     Stock acquired by a contribution of cash or Company Stock, then
     distributions of such shares of Company Stock in any year shall be made in
     an amount which is not less than the lesser of (iii) 100,000 shares of
     Company Stock, or (iv) a number of shares of Company Stock equal to 12% of
     the assets of the Trust.

          (c)  RELIANCE UPON COMMITTEE INSTRUCTION. From time to time, the
     Committee or its designee shall inform the Trustee in writing of how many
     shares are required to provide for the payment of Benefits under such Plans
     under Subsections 8.1(a) and (b). The Trustee may rely upon written
     instructions received by the Committee to carry out the instructions
     contained in this Subsection 8.1 and shall have no responsibility to verify
     or monitor the determinations made by the Committee.

          (d)  ACCELERATION. Notwithstanding anything herein to the contrary, if
     the Trustee undertakes a loan to acquire Company Stock pursuant to
     Subsection 4.1, such loan shall at all times provide that principal
     payments may be accelerated at any time at the discretion of the Committee.

     8.2  PROTECTION OF TRUSTEE. The Trustee shall, to the maximum extent
permitted by applicable law, be fully protected in acting upon any written
statement, affidavit or certification from the Company or the Committee. The
Trustee shall at all times, to the maximum extent permitted by applicable law,
be fully protected in making distributions pursuant to Sections 4, 8, 9, 13 and
17 hereof.

     8.3  COMPANY OBLIGATIONS. Notwithstanding the provisions of this Trust
Agreement, the Company and its Affiliates shall remain obligated with respect to
the Benefits attributable to their respective employees. Nothing in this Trust
Agreement shall relieve the Company or any of its Affiliates of their respective
liabilities with respect to the Benefits except to the extent such amounts are
paid to a Plan or a Participant from the Trust, it nevertheless being the
Company's intent that the Trust Fund shall be applied in discharge of the
Company's legal obligations as provided in this Trust Agreement. Notwithstanding
anything herein to the contrary, assets of the Trust Fund may not be used for
the payment of Benefits

                                       15
<PAGE>   17
under the Plans pursuant to this Section 8 unless the Benefits give rise to
a contractual obligation of the Company, and it is a Benefit described in
Schedule A.

     8.4  TRUSTEE AS HOLDER OF LEGAL TITLE TO TRUST ASSETS. Subject to Section
17 hereof, the Trustee shall hold legal title to all assets in the Trust.

     8.5  FEDERAL INCOME TAX CONSEQUENCES OF THE TRUST. The Trust Fund may be
applied in the discharge of legal obligations of the Company and for the benefit
of the Company's investments in its Affiliates as provided herein. Accordingly,
the Trust shall be treated as a grantor trust of the Company under the Code, and
the Company shall take into account in computing its tax liability, those items
of income, deductions and credits against tax attributable to assets held in the
Trust to which the Company would have been entitled had the Trust not been in
existence. The Trustee shall notify the Company promptly after it becomes aware
of any tax liability assessed against, or imposed upon, the Trust or the Trustee
in its capacity as Trustee of the Trust. The Company shall be responsible for
all matters in respect of such assessment or imposition, and shall have sole
responsibility for any defense in connection therewith. Payments in respect of
any tax liability of the Company arising in connection with earnings, gains or
activities relating to the Trust, including, without limitation, interest and
penalties, shall be made from the Trust Fund after a final determination of such
liability, unless the Company promptly pays such liability. In the event the
assets of the Trust are insufficient to pay such liability, any deficit shall be
paid promptly by the Company.

SECTION 9  EXPENSES, COMPENSATION AND INDEMNIFICATION.

     9.1  COMPENSATION. The Company shall pay the Trustee compensation in
accordance with the compensation schedule attached hereto as Schedule B, unless
the Company and the Trustee otherwise agree in writing.

     9.2  EXPENSES. The Trustee shall be reimbursed by the Company for its
reasonable expenses of implementation, management and administration of the
Trust, including brokerage commissions and the reasonable compensation of
attorneys or other agents engaged by the Trustee or by the Company to assist in
such implementation, management and administration.

     9.3  CHARGE ON TRUST FUND. All expenses and compensation referred to in
Sections 9.1 and 9.2 hereof shall be a charge on the Trust Fund and shall
constitute a lien on the Trust Fund in favor of the Trustee and shall be payable
from the Trust Fund unless paid when due by the Company.

     9.4  INDEMNIFICATION. The Company hereby agrees to indemnify and hold
harmless the Trustee from and against any losses, costs, damages, claims or
expenses, including without limitation reasonable attorneys' fees, which
the Trustee may incur or pay out in connection with, or otherwise arising out
of:

                                       16

<PAGE>   18
          (a)  the performance by the Trustee of its duties hereunder, unless
     any such loss, cost, damage, claim or expense is a result of negligence or
     willful misconduct by the Trustee or the breach by the Trustee of its
     fiduciary duties hereunder; or

          (b)  any action taken by the Trustee in good faith pursuant to the
     written direction of the Company or the Committee.

In the event that any action or regulatory proceeding shall be commenced or
claim asserted which may entitle the Trustee to be indemnified hereunder, the
Trustee shall give the Company written notice of such action or claim promptly
after becoming aware of such commencement or assertion unless the Company has
otherwise received notice of such action or claim. The Company shall be entitled
to participate in and, upon notice to the Trustee, assume the defense of any
such action or claim using counsel reasonably acceptable to the Trustee. The
Trustee shall cooperate with the Company in connection with the defense of any
such action or claim. Subject to Section 17 the Trustee shall have no claim on
the assets of the Trust Fund in respect of amounts payable to the Trustee under
this Subsection 9.4.

     9.5  PAYMENT FROM TRUST FUND. All payments of expenses and compensation
referred to in Subsections 9.1 and 9.2 hereof shall be made only with the
written approval of or at the direction of the Committee.

SECTION 10  ADMINISTRATION AND RECORDS.

     10.1 RECORDS. The Trustee shall keep or cause to be kept accurate and
detailed accounts of any investments, receipts, disbursements, loans, and other
transactions hereunder, and, subject to the confidentiality requirements of
Subsections 7.1 and 7.2, all accounts, books and records relating thereto shall
be open to inspection and audit at all reasonable times by any person designated
by the Company. The Trustee shall preserve all such accounts, books and records,
in original form or on microfilm, magnetic tape or any other similar process,
for such period as the Trustee may determine, but the Trustee may destroy such
accounts, books and records only after first notifying the Company in writing of
its intention to do so and transferring to the Company, subject to the
confidentiality requirements of Subsections 7.1 and 7.2 hereof, any of such
accounts, books and records that the Company shall request.

     10.2 SETTLEMENT OF ACCOUNTS.

          (a)  Subject to the confidentiality requirements of Subsections 7.1
     and 7.2, within 10 days after the close of each calendar quarter, and
     within 60 days after the removal or resignation of the Trustee or the
     termination of the Trust, the Trustee shall file with the Company a written
     account setting forth all investments, receipts, disbursements, loans, and
     other transactions

                                       17

<PAGE>   19

     effected by it with respect to the Trust during the preceding calendar
     quarter or during the period from the close of the preceding calendar
     quarter to the date of such removal, resignation or termination, including
     a description of all investments and securities purchased and sold, with
     the cost or net proceeds of such purchases or sales, and showing all cash,
     securities, and other property held and loans payable at the end of such
     calendar quarter or other period.

          (b)  It shall be the duty of the Company to review such written
     account promptly within 90 days from the date of filing any such account
     and if, within such 90-day period, the Company does not file with the
     Trustee a written notice of objection to any of the Trustee's acts or
     transactions, the initial account shall become an account stated between
     the Trustee and the Company. If the Company files a written notice of
     objection with the Trustee, the Trustee may file with the Company an
     adjusted account, in which case it shall be the duty of the Company to
     review such adjusted account promptly within 30 days from the date of its
     filing. If, within such 30-day period, the Company fails to file a written
     notice of objection to any of the Trustee's acts or transactions as so
     adjusted with the Trustee, the adjusted account shall become an account
     stated between the Trustee and the Company.

          (c)  Unless an account is fraudulent, when it becomes an account
     stated it shall be finally settled, and the Trustee shall, to the maximum
     extent permitted by applicable law, be forever released and discharged from
     all liability and accountability with respect to the propriety of its acts
     and transactions shown in such account.

     10.3 AUDIT. The Trustee shall from time to time permit an independent
public accountant selected by the Company to have access during ordinary
business hours to such records as may be necessary to audit the Trustee's
accounts.

     10.4 JUDICIAL SETTLEMENT. Nothing contained in this Trust Agreement shall
be construed as depriving the Trustee or the Company of the right to have a
judicial settlement of the Trustee's accounts. Upon any proceeding for a
judicial settlement of the Trustee's accounts or for instructions the only
necessary party thereto in addition to the Trustee shall be the Company.

     10.5 DELIVERY OF RECORDS TO SUCCESSOR. In the event of the removal or
resignation of the Trustee, the Trustee shall deliver to the successor Trustee
all records which shall be required by the successor Trustee to enable it to
carry out the provisions of this Trust Agreement.

     10.6 TAX FILINGS. In addition to any returns required of the Trustee by law
(E.G., any information return required to be filed on IRS Form 1041), the
Trustee

                                       18

<PAGE>   20
shall prepare and file such tax reports and other returns as the Company
and the Trustee may from time to time agree.

SECTION 11 REMOVAL OR RESIGNATION OF THE TRUSTEE AND DESIGNATION OF
           SUCCESSOR TRUSTEE.

     11.1 REMOVAL. At any time the Company may remove the Trustee with or
without cause upon at least 60 days' notice in writing to the Trustee. No
removal of the Trustee shall be effective until the Company has appointed in
writing a successor Trustee, and such successor has accepted the appointment in
writing.

     11.2 RESIGNATION. The Trustee may resign at any time upon at least 60 days'
notice in writing to the Company, except that any such resignation shall not be
effective until the Company has appointed in writing a successor Trustee, and
such successor has accepted the appointment in writing. At any time after 30
days following the sending of such notice of resignation, if the Company is
unable to appoint a successor Trustee or if a successor Trustee has not accepted
an appointment, the Trustee shall be entitled, at the expense of the Company, to
petition a United States District Court or any of the courts of the State of
Delaware or other court having jurisdiction to appoint its successor.

     11.3 SUCCESSOR TRUSTEE. Subject to Subsection 2.1 hereof, each successor
Trustee, during such period as it shall act as such, shall have the powers and
duties herein conferred upon the Trustee, and the word "Trustee" wherever used
herein, except where the context otherwise requires, shall be deemed to include
any successor Trustee. Upon designation of a successor Trustee and delivery to
the resigned or removed Trustee of written acceptance by the successor Trustee
of such designation, such resigned or removed Trustee shall promptly assign,
transfer, deliver and pay over to such Trustee, in conformity with the
requirements of applicable law, the funds and properties in its control or
possession then constituting the Trust Fund and take all requisite action to
provide for the succession by such successor Trustee to any loans to the Trust.

SECTION 12 ENFORCEMENT OF TRUST AGREEMENT.

     12.1 RIGHTS OF PARTIES TO ENFORCE THE TRUST AGREEMENT. The Company and the
Trustee shall have the exclusive right to enforce any provision of this Trust
Agreement. In any action or proceeding affecting the Trust, the only necessary
parties shall be the Company and the Trustee and, except as otherwise required
by applicable law, no other person shall be entitled to any notice or service of
process. Any judgment entered in such an action or proceeding shall, to the
maximum extent permitted by applicable law, be binding and conclusive on all
persons having or claiming to have any interest in the Trust or any Plan.

                                       19

<PAGE>   21

     12.2 LIMITATION ON RIGHTS OF PARTICIPANTS, BENEFICIARIES AND OTHER
AFFILIATES. Except as otherwise provided in Sections 7, 8, 13, and 14 hereof,
neither the Plans nor any Participant or Beneficiary shall have any rights with
respect to the Trust Fund, no Plan shall be deemed to have any beneficial
interest in the Trust Fund, no Employee shall be deemed to have any beneficial
interest in the Trust Fund arising from his participation in any particular
Plan, and no Affiliate shall have or be deemed to have any interest in the
Trust.

SECTION 13 TERMINATION.

     13.1 TERMINATION UPON SPECIFIC EVENTS. The Trust shall be terminated as
soon as practicable after the Trustee has received written notice from the
Committee that one or more of the following events has occurred:

          (a)  the Department of Labor or a court of competent jurisdiction has
     determined (or, in the Committee's sole discretion, would be likely to
     determine) that the assets of the Trust are subject to Part 4 of Subtitle B
     of Title I of ERISA, or

          (b)  the Internal Revenue Service or a court of competent jurisdiction
     has determined (or, in the Committee's sole discretion, would be likely to
     determine) that any portion of the Trust Fund is presently taxable to any
     Participant or Beneficiary.

In the event of a termination pursuant to this Subsection 13.1, the Trustee
shall sell such shares of Company Stock, subject to a registration statement
being filed if necessary, held in the Trust as necessary to repay all principal
and interest remaining due under any loans to the Trust. The Trustee shall then
make distributions of shares of Company Stock as provided in Subsection 8.1(b)
as though all shares of Company Stock held in the Trust had been acquired by a
contribution of cash or Company Stock to the Trust. Any assets remaining in the
Trust following such distribution shall be distributed to the Administrators to
satisfy the Company's obligations under one or more other employee benefit plans
of the Company benefiting the Participants or to pay the compensation of any
broad cross-section of Participants, as determined in good faith by the
Committee.

     13.2 TERMINATION IN OTHER EVENTS. Notwithstanding anything herein to the
contrary, the Trust shall terminate on the earliest of (a) the fifth anniversary
of the Effective Date, (b) the date on which the Committee informs the Trustee
in writing that the Company and its Affiliates have no obligations under any
Plans (or the date on which there are no Plans), (c) the date on which the
Committee demands repayment of the entire outstanding principal balance and
accrued interest on any loans to the Trust, or (d) the date on which the Trust
contains no assets and retains no claims to recover assets from the Company and
its Affiliates pursuant to any provision hereof, whichever shall first occur. In
the event of a termination described

                                       20
<PAGE>   22
in clauses (a), (b), or (c) of this Section 13.2, the Trustee shall sell such
shares of Company Stock held in the Trust as necessary to repay all principal
and interest remaining due under any loans to the Trust and shall then
distribute all remaining assets then constituting the Trust Fund, as provided in
Section 13.1

     13.3 LIMITATION ON TRUSTEE LIABILITY UPON TOTAL DISTRIBUTION; CONTINUATION
OF TRUSTEE POWERS. Upon a total distribution of the Trust assets pursuant to
Section 8 or this Section 13, the Trustee shall be relieved from all further
liability. The powers of the Trustee hereunder shall continue so long as any
assets of the Trust remain in its hands.

     13.4 NONAPPLICABILITY OF ERISA. Notwithstanding anything herein to the
contrary, no amount shall be distributed to any Participant pursuant to this
Section 13 if such distribution could, in the opinion of independent counsel,
cause the Trust to be subject to ERISA (other than as an unfunded plan described
in ERISA section 201(2)). Prior to a distribution pursuant to this Section, the
Committee shall provide the Trustee with a Schedule of Participants eligible for
a distribution (taking into account this subsection 13.4).

SECTION 14 AMENDMENT.

     14.1 AMENDMENTS IN GENERAL. The Company may, in its sole discretion, from
time to time amend, in whole or in part, any or all of the provisions of this
Trust Agreement, including, without limitation, by adding to, or subtracting
from, Schedule A hereto one or more employee benefit plans (within the meaning
of Section 3(3) of ERISA) or plans or arrangements that are not employee benefit
plans (within the meaning of such Section); PROVIDED, that (a) in making any
modification to Schedule A hereto, the Company shall act in good faith taking
into account the best interests of a broad cross-section of Employees, and (b)
the Company shall ensure that at all times Schedule A shall include (i) the
employee benefit plans included as items 6 and 7 under the list of Plans and
Benefits on Schedule A hereto on the Effective Date, and (ii) at least one
employee benefit plan that is not an employee benefit plan within the meaning of
Section 3(3) of ERISA. No amendment to this Trust Agreement or the Plans shall
be made that would (x) purport to alter the irrevocable character of the Trust,
(y) without the Trustee's prior written consent, adversely affect the Trustee's
rights, increase the Trustee's duties or responsibilities or decrease the
Trustee's compensation hereunder, or (z) without the approval of a majority of
the Eligible Participants, alter Sections 2, 4, 6, 7, 8, 9.4, 12, 13, or this
Section 14 so as to adversely affect the interests of the Participants. For
purposes of determining approval by Eligible Participants, each Eligible
Participant shall have one vote for each share of Company Stock allocated to
such Eligible Participant's account in the 401(k) Plan and one vote for each
share subject to outstanding options to purchase Company Stock granted under the
Stock Option Plans to such Eligible Participants. A vote in favor of an
amendment by

                                       21
<PAGE>   23
Eligible Participants holding a majority of the total voting power, as described
in the foregoing sentence, shall constitute approval of such amendment.

     14.2 SPECIFIC AMENDMENTS. Notwithstanding Subsection 14.1, the Company may
amend this Trust Agreement from time to time in such manner as may be necessary,
in the opinion of independent counsel, to prevent this Trust Agreement or the
Trust from becoming subject to ERISA and to prevent the current taxation of the
Trust Fund to Participants.

SECTION 15 NONALIENATION.

     Except as otherwise provided by this Trust Agreement and except as
otherwise may be required by applicable law, (a) no amount payable to or in
respect of any Plan, Participant or Employee at any time under the Trust shall
be subject in any manner to alienation by any Participant or Employee by
anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment,
charge, or encumbrance of any kind, and any attempt to so alienate, sell,
transfer, assign, pledge, attach, charge, or otherwise encumber any such amount,
whether presently or thereafter payable, shall be void, and (b) the Trust Fund
shall in no manner be liable for or subject to the debts or liabilities of any
Participant or Employee.

SECTION 16 COMMUNICATIONS.

     16.1 TO THE COMPANY,  BOARD OF DIRECTORS AND COMMITTEE.  Communications
to the Company,  the Board of Directors and the Committee shall be addressed to:

               Kaufman and Broad Home Corporation
               10990 Wilshire Boulevard
               Los Angeles, California  90024
               Attention: Chief Financial Officer

with a copy to:

               Kaufman and Broad Home Corporation
               10990 Wilshire Boulevard
               Los Angeles, California 90024
               Attention: General Counsel

PROVIDED, HOWEVER, that upon the Company's written request, such communications
shall be sent to such other address as the Company may specify.

     16.2 TO THE TRUSTEE.   Communications to the Trustee shall be addressed to:

               Wachovia Bank, N.A.
               100 Main Street

                                       22

<PAGE>   24

               Winston Salem, North Carolina 27150
               Attention: Manager, Executive Services Administration

                                       23

<PAGE>   25

with a copy to:

                Wachovia Bank, N.A.
                100 Main Street
                Winston Salem, North Carolina  27150
                Attention: Peter Quinn

PROVIDED, HOWEVER, that upon the Trustee's written request, such communications
shall be sent to such other address as the Trustee may specify.

     16.3  TO A PARTICIPANT. Communications to a Participant or to his
Beneficiaries shall be addressed to the Participant or his Beneficiaries,
respectively, at the address indicated on the Participant Schedule as in effect
at the time of the communication.

     16.4  BINDING UPON RECEIPT. No communication shall be binding on the
Trustee until it is received by the Trustee, and no communication shall be
binding on the Company, the Board of Directors, or the Committee until it is
received by the Company, the Board of Directors, or the Committee, respectively.
A communication shall be deemed binding on a Participant or the Participant's
Beneficiaries 60 days following the date notice is given or sent pursuant to
Subsection 16.3.

     16.5  AUTHORITY TO ACT. The Secretary or Assistant Secretary of the Company
shall from time to time certify to the Trustee the person or persons authorized
to act for the Company, the Committee, and the Board of Directors and shall
provide the Trustee with such information regarding the Company as the Trustee
may reasonably request. The Trustee may continue to rely on any such
certification until notified to the contrary.

     16.6  AUTHENTICITY OF INSTRUMENTS. The Trustee shall be fully protected in
acting upon any instrument, certificate, or paper reasonably believed by it to
be genuine and to be signed or presented by the proper person or persons, and
the Trustee shall be under no duty to make any investigation or inquiry as to
any statement contained in any such writing but may accept the same as
conclusive evidence of the truth and accuracy of the statements therein
contained.

SECTION 17  CLAIMS OF COMPANY'S BANKRUPTCY CREDITORS.

     17.1  BANKRUPTCY CREDITORS. In the event of the Company's "insolvency," the
assets of the Trust shall be available to pay the claims of any creditor of the
Company to whom a distribution may be made in accordance with state and federal
bankruptcy laws. The Company shall be deemed to be "insolvent" if it is either
(a) unable to pay its debts and liabilities as they become due or (b) subject to
a pending proceeding as a debtor under the federal Bankruptcy Code (or any
successor federal statute) or any state bankruptcy code. In the event the
Company

                                       24
<PAGE>   26
becomes insolvent, the Board of Directors and the Chief Executive Officer of the
Company shall notify the Trustee of the event as soon as practicable. Upon
receipt of such notice, or if the Trustee receives other written allegations of
the Company's insolvency from a third party considered by the Trustee to be
reliable and responsible, the Trustee shall cease making any distributions from
the assets of the Trust, shall hold the assets in the Trust for the benefit of
the Company's creditors and shall take such steps as are necessary to determine
within a reasonable period of time whether the Company is insolvent. In making
such determination, the Trustee may rely upon a certificate of the Board of
Directors and the Chief Executive Officer of the Company or a determination by a
court of competent jurisdiction that the Company is or is not insolvent. In the
case of the Trustee's determination of the Company's insolvency, the Trustee
will deliver assets of the Trust to satisfy claims of the Company's creditors as
directed pursuant to a final order of a court of competent jurisdiction.

     17.2 RESUMPTION OF BENEFITS; RESTORATION OF ACCOUNTS. In the event the
Trustee ceases making distributions by reason of Subsection 17.1, the Trustee
shall resume making distributions pursuant to Sections 4, 8, or 13 of this
Agreement only after the Trustee has determined that the Company is no longer
insolvent or upon receipt of an order of a court of competent jurisdiction
requiring such distributions. In making any determination under this Section,
the Trustee may rely upon a certificate of the Board of Directors and the Chief
Executive Officer of the Company.

SECTION 18  CONSOLIDATION, MERGER OR SALE OF THE COMPANY.

     In the event of consolidation of the Company with, or merger of the Company
with or into, any corporation or corporations or other entity or entities, or
any sale or conveyance of all or substantially all of the assets of the Company,
proper provisions shall be made in connection with such transaction such that
the Trustee shall deal with the corporation formed by such consolidation, or
with or into which the Company is merged, or the person that acquires the assets
of the Company on the same basis as it dealt with the Company prior to such
transactions and, in such event, the term "Company" within this Agreement shall
mean such corporation or person.

SECTION 19  MISCELLANEOUS PROVISIONS.

     19.1 BINDING  EFFECT.  This Trust  Agreement  shall be  binding on the
Company  and the  Trustee  and their respective successors and assigns.

     19.2 INQUIRY AS TO AUTHORITY. A third party dealing with the Trustee shall
not be required to make inquiry as to the authority of the Trustee to take any
action nor be under any obligation to follow the proper application by the
Trustee of the

                                       25

<PAGE>   27
proceeds of sale of any property sold by the Trustee or to inquire into the
validity or propriety of any act of the Trustee.

     19.3 RESPONSIBILITY FOR COMPANY ACTION. The Trustee assumes no obligation
or responsibility with respect to any action required by this Trust Agreement on
the part of the Company, the Board of Directors, the Committee, any Affiliate,
the Participants or any Beneficiaries. The Trustee shall be under no duties
except such duties as are specifically set forth as such in this Trust Agreement
or under applicable law, and no implied covenant or obligation shall be read
into this Trust Agreement against the Trustee.

     19.4 SUCCESSOR TO TRUSTEE. Subject to Subsection 2.1, any corporation into
which the Trustee may be merged or with which it may be consolidated, or any
corporation resulting from any merger, reorganization or consolidation to which
the Trustee may be a party, or any corporation to which all or substantially all
the trust business of the Trustee may be transferred shall be the successor of
the Trustee hereunder without the execution or filing of any instrument or the
performance of any act.

     19.5 INTERCOMPANY AGREEMENTS. The Company may require any Affiliate to
enter into such other agreement or agreements as it shall deem necessary to
obligate such Affiliate to reimburse the Company for any other amounts paid by
the Company hereunder, directly or indirectly, in respect of such Affiliate's
employees.

     19.6 TITLES NOT TO CONTROL. Titles to the Sections of this Trust Agreement
are included for convenience only and shall not control the meaning or
interpretation of any provision of this Trust Agreement.

     19.7 LAWS OF THE STATE OF DELAWARE TO GOVERN. This Trust Agreement and the
Trust established hereunder shall be governed by and construed, enforced, and
administered in accordance with the laws of the State of Delaware, without
reference to the principles of conflicts of law thereof.

     19.8 FRACTIONAL SHARES. Notwithstanding anything herein to the contrary,
the Trustee may distribute any fractional share otherwise required to be
distributed to Administrators or Participants pursuant to Sections 8 or 13, in
cash in an amount equal to the Daily Value, multiplied by such fraction.

     19.9 COUNTERPARTS. For the purpose of facilitating the execution of this
Trust Agreement and for other purposes, this Trust Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and all of which counterparts shall constitute but
one and the same instrument.

                                       26
<PAGE>   28
     IN WITNESS WHEREOF, this Trust Agreement has been duly executed by the
parties hereto as of the day and year first above written.

                                 KAUFMAN AND BROAD HOME CORPORATION

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

Attest:  /S/ KIMBERLY N. KING
         -----------------------------------------
         Kimberly N. King, its Corporate Secretary
         and Corporate Counsel

                                 WACHOVIA BANK, N.A., as Trustee

                                 By:  /S/ JOE O. LONG
                                      ---------------------------------------
                                      Joe O. Long, its Senior Vice President/
                                      Group Executive

Attest:  /S/ JOHN N. SMITH III
         ------------------------------------------
         John N. Smith III, its Assistant Secretary

                                       26

<PAGE>   29
STATE OF CALIFORNIA         )
                            )ss
COUNTY OF LOS ANGELES       )

     On August 30, 1999, before me, Michelle Tillen, personally appeared Michael
F. Henn, personally known to me to be the person whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument the person, or
the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal

-----------------------------
      Michelle Tillen
    Commission #1090909
Notary Public - California                     /s/ MICHELLE TILLEN
    Los Angeles County                         ----------------------------
My Comm. Expires Mar 17, 2000                  Notary Public
-----------------------------

STATE OF   __________________________________

COUNTY OF  __________________________________

     On the ______ day of  August, 1999, before me personally came to
me ____________________, who, being by me duly sworn, did depose and say that he
resides at ; that he is the ____________________ of Wachovia Bank, N.A., one of
the corporations described in and which executed the foregoing instrument; that
he knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by order of the board of
directors of said corporation; and that he signed his name thereto by like
order.

                                         ----------------------------
                                         Notary Public

                                       27

<PAGE>   30

STATE OF CALIFORNIA         )
                            )ss
COUNTY OF LOS ANGELES       )

     On August __, 1999, before me, _________________, personally appeared
_______________, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal

                                         Notary Public

STATE OF NORTH CAROLINA

COUNTY OF STOKES

     On the 30 day of August, 1999, before me personally came to me John N.
Smith, III, who, being by me duly sworn, did depose and say that he resides at
Winston-Salem, NC; that he is the Assistant Secretary of Wachovia Bank, N.A.,
one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by order of the
board of directors of said corporation; and that he signed his name thereto by
like order.

                                         /s/ BONNIE D. HARTSOE
                                         ----------------------------
                                         Notary Public

                                                      OFFICIAL SEAL
                                                    BONNIE D. HARTSOE
                                         [SEAL]  Notary Public-North Carolina
                                                    COUNTY OF STOKES
                                                   My Commission Expires
                                                     December 20, 2000
<PAGE>   31
                                   Schedule A

                           LIST OF PLANS AND BENEFITS

1.   Kaufman and Broad Home Corporation 1999 Incentive Plan

2.   Kaufman and Broad Home Corporation 1988 Employee Stock Plan

3.   Kaufman and Broad Home Corporation Performance Based Incentive Plan for
     Senior Management

4.   Kaufman and Broad Home Corporation 1998 Stock Incentive Plan

5.   Kaufman and Broad Home Corporation 1986 Stock Option Plan

6.   Company Stock Investment Fund under Kaufman and Broad Home
     Corporation Amended and Restated 401(k) Plan

7.   Company Matching Contribution under Kaufman and Broad Home
     Corporation Amended and Restated 401(k) Plan

                           LIST OF PLAN ADMINISTRATORS

The Company is the Administrator of all plans.

                                       29

<PAGE>   32

                                   Schedule B

                        TRUSTEE'S COMPENSATION SCHEDULE

The following fees shall be paid to Wachovia in consideration of its services as
Trustee of the Trust:

1.   ACCEPTANCE AND IMPLEMENTATION FEE...................................$10,000

     Wachovia agrees to implement the Trust for a fee of Ten Thousand Dollars
     ($10,000). Initial services will include reviewing drafts of the Trust and
     all other pertinent documents, the establishment of a trust account and the
     establishment of administrative procedures among Kaufman and Broad,
     Wachovia and the agent receiving shares from the trust. The Acceptance and
     Implementation Fee will be due 30 days after the Trust document is signed.

2.   ONGOING ANNUAL ADMINISTRATION FEE...................................$30,000

     Wachovia agrees to provide trustee services for an annual fee of Thirty
     Thousand Dollars ($30,000). This fee will include all transfers of stock
     from the Trust (reporting gross transfers, not participant transactions),
     holding Kaufman and Broad common stock in an amount not to exceed 3 million
     shares, voting of the shares as tabulated by the Company or transfer agent
     and issuing trust reports on a quarterly basis. The Annual Administration
     Fee will be billed quarterly, in arrears.

Wachovia will  guarantee  this pricing for a period of two years.  Any future
increases  will be limited to 5% per annum.

                                       30

<PAGE>   33

                                   Schedule C

                            FORM OF PROMISSORY NOTE

$75,000,000                                                      August 27, 1999
Los Angeles, California

     FOR VALUE RECEIVED, the undersigned, WACHOVIA BANK, N.A., not in its
individual or corporate capacity, but solely in its capacity as Trustee of the
Kaufman and Broad Home Corporation Grantor Stock Trust (the "Trust"), hereby
promises on behalf of the Trust to pay to the order of Kaufman and Broad Home
Corporation, a Delaware corporation (the "Company"), at the principal offices of
the Company in Los Angeles, California, or at such other place as the Company
shall designate in writing, the aggregate principal amount of Seventy-Five
Million Dollars ($75,000,000), as shown on Schedule A attached hereto as such
may be amended from time to time, with interest in arrears thereon, as
hereinafter provided.

     Principal shall be paid in installments in the amounts and on the dates set
forth on the Maturity Schedule attached hereto as Schedule A, with the last such
installment due on August 29, 2004; PROVIDED, HOWEVER, that this Note may be
prepaid in whole or in part at any time without penalty; and provided further
that the principal amount of this Note and any accrued but unpaid interest (i)
shall be accelerated in the event that the Trust shall have been terminated in
accordance with Section 13.2 of the Trust, and the Trustee shall have complied
with the requirements of such Section 13.2, or (ii) shall be deemed forgiven, if
applicable, in accordance with Section 8.1(a) of the Trust. Interest on the
unpaid principal balance, at an annual interest rate (the "Interest Rate") equal
to the Midterm AFR Rate in effect on the date that any principal is advanced
under this Note, as shown on Schedule A, shall be paid quarterly, in arrears, on
each January 1, April 1, July 1, and October 1, commencing October 1, 1999, and
shall be calculated on the basis of a 360-day year of 30-day months. Whenever
any payment fall due on a Saturday, Sunday, or public holiday, such payment
shall be made on the next succeeding business day.

     This Note shall be construed under the laws of the State of Delaware.

     The  undersigned  represents  and warrants  that the  indebtedness
represented  by this Note was incurred for the purpose of purchasing shares of
Common Stock, $1.00 par value, of the Company.

                                       31
<PAGE>   34

     This Note may not be assigned by the Company,  other than by operation of
law,  without the prior express written consent of the undersigned.

     The Company shall have no recourse  whatsoever to any assets of the Trustee
in its  individual or corporate  capacity for  repayment.  The Trustee is
entering into this Agreement not it its individual or corporate capacity but
solely as Trustee,  and no personal or corporate  liability or personal or
corporate  responsibilities are  assumed  by, or shall at any time be  asserted
or  enforceable  against,  the  Trustee in its  individual  or corporate
capacity under, or with respect to, this Agreement.

                                           WACHOVIA  BANK,  N.A.,  on behalf
                                           of the  Kaufman and Broad Home
                                           Corporation Stock Benefit Trust

                                           By: _____________________________

                                               _______________, its __________

                                       32
<PAGE>   35

SCHEDULE A:

<TABLE>
<CAPTION>
DATE THAT            AMOUNT OF                     REPAYMENT
PRINCIPAL IS         PRINCIPAL        INTEREST     SCHEDULE FOR
ADVANCED             ADVANCED         RATE         PRINCIPAL ADVANCED
---------            ---------        ----         ------------------
<S>                  <C>              <C>          <C>

August 27, 1999      $6,300,000       5.97%        $630,000 on August 26, 2000
                                                   $630,000 on August 26, 2001
                                                   $630,000 on August 26, 2002
                                                   $630,000 on August 26, 2003
                                                   Balance Outstanding on August 26, 2004

$________________    $_________       ____%        [10% of Principal] on [First Anniversary of Date Principal Advanced]
                                                   [10% of Principal] on [Second Anniversary of Date Principal Advanced]
                                                   [10% of Principal] on [Third Anniversary of Date Principal Advanced]
                                                   [10% of Principal] on [Fourth Anniversary of Date Principal Advanced]
                                                   Balance Outstanding on August 29, 2004

$________________    $_________       ____%        [10% of Principal] on [First Anniversary of Date Principal Advanced]
                                                   [10% of Principal] on [Second Anniversary of Date Principal Advanced]
                                                   [10% of Principal] on [Third Anniversary of Date Principal Advanced]
                                                   [10% of Principal] on [Fourth Anniversary of Date Principal Advanced]
                                                   Balance Outstanding on August 29, 2004

$________________    $_________       ____%        [10% of Principal] on [First Anniversary of Date Principal Advanced]
                                                   [10% of Principal] on [Second Anniversary of Date Principal Advanced]
                                                   [10% of Principal] on [Third Anniversary of Date Principal Advanced]
                                                   [10% of Principal] on [Fourth Anniversary of Date Principal Advanced]
                                                   Balance Outstanding on August 29, 2004

$________________    $_________       ____%        [10% of Principal] on [First Anniversary of Date Principal Advanced]
                                                   [10% of Principal] on [Second Anniversary of Date Principal Advanced]
                                                   [10% of Principal] on [Third Anniversary of Date Principal Advanced]
                                                   [10% of Principal] on [Fourth Anniversary of Date Principal Advanced]
                                                   Balance Outstanding on August 29, 2004
</TABLE>

                                       1

<PAGE>   36

SCHEDULE A:

<TABLE>
<CAPTION>
DATE THAT            AMOUNT OF                     REPAYMENT
PRINCIPAL IS         PRINCIPAL        INTEREST     SCHEDULE FOR
ADVANCED             ADVANCED         RATE         PRINCIPAL ADVANCED
---------            ---------        ----         ------------------
<S>                  <C>              <C>          <C>

August 27, 1999      $6,300,000       5.97%        $630,000 on August 26, 2000
                                                   $630,000 on August 26, 2001
                                                   $630,000 on August 26, 2002
                                                   $630,000 on August 26, 2003
                                                   Balance Outstanding on August 26, 2004

$________________    $_________       ____%        [10% of Principal] on [First Anniversary of Date Principal Advanced]
                                                   [10% of Principal] on [Second Anniversary of Date Principal Advanced]
                                                   [10% of Principal] on [Third Anniversary of Date Principal Advanced]
                                                   [10% of Principal] on [Fourth Anniversary of Date Principal Advanced]
                                                   Balance Outstanding on August 29, 2004

$________________    $_________       ____%        [10% of Principal] on [First Anniversary of Date Principal Advanced]
                                                   [10% of Principal] on [Second Anniversary of Date Principal Advanced]
                                                   [10% of Principal] on [Third Anniversary of Date Principal Advanced]
                                                   [10% of Principal] on [Fourth Anniversary of Date Principal Advanced]
                                                   Balance Outstanding on August 29, 2004

$________________    $_________       ____%        [10% of Principal] on [First Anniversary of Date Principal Advanced]
                                                   [10% of Principal] on [Second Anniversary of Date Principal Advanced]
                                                   [10% of Principal] on [Third Anniversary of Date Principal Advanced]
                                                   [10% of Principal] on [Fourth Anniversary of Date Principal Advanced]
                                                   Balance Outstanding on August 29, 2004

$________________    $_________       ____%        [10% of Principal] on [First Anniversary of Date Principal Advanced]
                                                   [10% of Principal] on [Second Anniversary of Date Principal Advanced]
                                                   [10% of Principal] on [Third Anniversary of Date Principal Advanced]
                                                   [10% of Principal] on [Fourth Anniversary of Date Principal Advanced]
                                                   Balance Outstanding on August 29, 2004
</TABLE>

                                       1

<PAGE>   37

                                   Schedule C

                            FORM OF PROMISSORY NOTE
                            -----------------------

$75,000,000                                                      August 31, 1999
Los Angeles, California

     FOR VALUE RECEIVED, the undersigned, WACHOVIA BANK, N.A., not in its
individual or corporate capacity, but solely in its capacity as Trustee of the
Kaufman and Broad Home Corporation Grantor Stock Trust (the "Trust"), hereby
promises on behalf of the Trust to pay to the order of Kaufman and Broad Home
Corporation, a Delaware corporation (the "Company"), at the principal offices
of the Company in Los Angeles, California, or at such other place as the
Company shall designate in writing, the aggregate principal amount of
Seventy-Five Million Dollars ($75,000,000), as shown on Schedule A attached
hereto as such may be amended from time to time, with interest in arrears
thereon, as hereinafter provided.

     Principal shall be paid in installments in the amounts and on the dates
set forth on the Maturity Schedule attached hereto as Schedule A, with the last
such installment due on August 27, 2004; PROVIDED, HOWEVER, that this Note may
be prepaid in whole or in part at any time without penalty; and provided
further that the principal amount of this Note and any accrued but unpaid
interest (i) shall be accelerated in the event that the Trust shall have been
terminated in accordance with Section 13.2 of the Trust, and the Trustee shall
have complied with the requirements of such Section 13.2, or (ii) shall be
deemed forgiven, if applicable, in accordance with Section 8.1(a) of the Trust.
Interest on the unpaid principal balance, at an annual interest rate (the
"Interest Rate") equal to the Midterm AFR Rate in effect on the date that any
principal is advanced under this Note, as shown on Schedule A, shall be paid
quarterly, in arrears, on each January 1, April 1, July 1, and October 1,
commencing October 1, 1999, and shall be calculated on the basis of a 360-day
year of 30-day months. Whenever any payment falls due on a Saturday, Sunday, or
public holiday, such payment shall be made on the next succeeding business day.

     This Note shall be construed under the laws of the State of Delaware.

     The undersigned represents and warrants that the indebtedness represented
by this Note was incurred for the purpose of purchasing shares of Common Stock,
$1.00 par value, of the Company.

                                       30
<PAGE>   38

     This Note may not be assigned by the Company, other than by operation of
law, without the prior express written consent of the undersigned.

     The Company shall have no recourse whatsoever to any assets of the Trustee
in its individual or corporate capacity for repayment. The Trustee is entering
into this Agreement not in its individual or corporate capacity but solely as
Trustee, and no personal or corporate liability or personal or corporate
responsibilities are assumed by, or shall at any time be asserted or
enforceable against, the Trustee in its individual or corporate capacity under,
or with respect to, this Agreement.

                                              WACHOVIA BANK, N.A., on behalf of
                                              the Kaufman and Broad Home
                                              Corporation Stock Benefit Trust

                                              By:  /s/ JOE O. LONG
                                                 -------------------------------
                                                 Joe O. Long
                                                 Senior VP / Group Executive

                                       31
<PAGE>   39

SCHEDULE A:
-----------

<TABLE>
<CAPTION>
Date that                Amount of                           Repayment
Principal is             Principal             Interest      Schedule for
Advanced                 Advanced              Rate          Principal Advanced
----------               ----------            --------      ------------------
<S>                      <C>                   <C>           <C>
August 31, 1999          $7,852,818.75          5.97%        $785,281.88 on August 27, 2000
                                                             $785,281.88 on August 27, 2001
                                                             $785,281.88 on August 27, 2002
                                                             $785,281.88 on August 27, 2003
                                                             Balance Outstanding on August 27, 2004
</TABLE>

                                       1<PAGE>   1

                                                                  EXHIBIT 10.23

                       KAUFMAN AND BROAD HOME CORPORATION

                        NON-EMPLOYEE DIRECTORS STOCK PLAN

                   (as amended and restated December 6, 1999)

         1. PURPOSE OF THE PLAN. The purpose of the Kaufman and Broad Home
Corporation Non-Employee Directors Stock Plan ("Plan") is to grant Awards of
Stock Units and/or Options to non-employee Directors of Kaufman and Broad Home
Corporation (the "Company") in order to align their compensation with the equity
interests of the Company's stockholders. The Plan provides for compensation
through (i) annual grants of Stock Units to Directors and Committee Chairs, (ii)
the payment of Directors' Annual Retainer and Meeting Fees in cash or Stock
Units, and (iii) the ability under certain conditions for Directors to elect to
receive any or all of the foregoing in the form of Options. The Plan was adopted
effective as of September 26, 1996, was subsequently amended as of December 4,
1998 and, with respect to all Awards first made after December 6, 1999, was
amended and restated as of December 6, 1999.

         2.  DEFINITIONS.

         "ANNUAL MEETING" shall mean an annual meeting of stockholders of the
Company.

         "ANNUAL RETAINER" shall mean the retainer fee, established by the
Board, paid to a Director for service as a Director on the Board for a Director
Year.

         "ANNUAL STOCK UNIT AWARD" shall mean the annual Award of Stock Units,
established by the Board, paid to a Director at the beginning of a Director Year
in consideration for such Director's agreement to serve as a Director on the
Board for the Director Year.

         "AWARD" shall mean an award of Stock Units or Options pursuant to the
Plan.

         "BOARD" shall mean the Board of Directors of the Company.

         "CHANGE IN CONTROL" of the Company shall have occurred if either: (1)
individuals who, as of the effective date of this Plan, constitute the Board of
the Company (as of the date hereof, the "Incumbent Board") cease for any reason
to constitute at least a majority of the Directors constituting the Board,
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

                                       1

<PAGE>   2

the Incumbent Board (other than an election or nomination of an individual whose
initial assumption of office is (A) in connection with the acquisition by a
third person, including a "group" as such term is used in Section 13(d)(3) of
the Exchange 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 who are members of the
Incumbent Board), or (B) 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 Exchange Act)
shall be, for purposes of this Plan, considered as though such person were a
member of the Incumbent Board, or (2) the Board (a majority of which shall
consist of Directors who are members of the Incumbent Board) has determined that
a Change of Ownership, for purposes of this Plan, shall have occurred. If any of
the events enumerated in clauses (1) or (2) occur, the Board shall determine the
effective date of the Change of Ownership resulting therefrom, for purposes of
the Plan.

         "CODE" shall mean the Internal Revenue Code of 1986, as amended.

         "COMMITTEE" shall mean the Nominating and Corporate Governance
Committee of the Board or such other committee as may be designated by the
Board.

         "COMMITTEE CHAIR RETAINER" shall mean the annual Award of Stock Units,
established by the Board, to be paid to a Director for service as Chairman of a
committee of the Board of Directors for a Director Year.

         "COMPANY" shall mean Kaufman and Broad Home Corporation.

         "DIRECTOR" shall mean a non-employee director of the Company.

         "DIRECTOR YEAR" shall mean the fiscal year commencing on the date of
the Company's Annual Meeting and ending on the date immediately preceding the
next Annual Meeting.

         "DIVIDEND EQUIVALENT PAYMENTS" shall mean the payment described in
Section 7 hereof, to a holder of Stock Units with respect to certain dividend
paid on outstanding shares of Stock.

         "EFFECTIVE DATE" shall mean September 26, 1996.

         "FAIR MARKET VALUE" of the Stock on a particular date shall equal the
average of the reported closing prices for the Stock on the New York Stock
Exchange for the ten (10) consecutive trading days immediately preceding such
date.

                                       2

<PAGE>   3

         "FEES" shall mean the amount, for any Director Year, of the Annual
Retainer and/or the Meeting Fees, if any.

         "MEETING FEES" shall mean the fees, established by the Board, paid to a
Director for attending a meeting of the Board or a committee of the Board and
any Per Diem Fees. This term shall include all fees paid to a Director for
extraordinary or special Board and/or committee meetings.

         "OPTION" shall mean a right to purchase a number of shares of Stock at
such exercise price, at such times, and on such other terms and conditions as
are specified herein or pursuant to such other documentation as may evidence the
Award. Options granted under this Plan are not intended to satisfy the
requirements for treatment as Incentive Stock Options as defined under Section
422 of the Internal Revenue Code of 1986, as amended.

         "PER DIEM FEES" shall mean a fee, established by the Board, authorized
by the Chief Executive Officer of the Company, in his or her sole discretion, to
a Director who is asked to work on Board issues for a significant part of the
day outside of normal Board or committee meetings.

         "PRIOR PLANS" shall mean the Kaufman and Broad Home Corporation
Directors Restricted Stock Plan and the Kaufman and Broad Home Corporation 1993
Director Stock Plan.

         "RESTRICTED STOCK" shall mean Restricted Stock (as defined in the
Kaufman and Broad Home Corporation Directors Restricted Stock Plan) of the
Company.

         "RATIO" shall mean such ratio of the grant-date value of an Option to
the Fair Market Value of the Stock underlying the Option as may be determined by
the Committee from time to time for the purposes to calculating the number of
Options to be granted to a Director, provided that any adjustment in such ratio
shall be subject to the approval of the Board.

         "RULE 16B-3" shall mean Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended.

         "STOCK" shall mean shares of Common Stock, par value $1.00 per share,
of the Company.

         "STOCK UNIT" shall mean a right to (i) receive a share of Stock or (ii)
receive a cash payment, in accordance with the conditions set forth herein, of
the Fair Market Value of a share of Stock.

                                       3

<PAGE>   4

         "TERMINATION DATE" shall mean the date a Director's service on the
Board terminates for any reason.

         3.  SOURCE OF SHARES DELIVERED UNDER AWARDS.  Any Stock delivered
pursuant to an Award shall consist of shares of stock acquired by the Company
on the open market.

         4.  ANNUAL FEES AND AWARDS.

                  (a) The Committee shall from time to time establish the dollar
amount of the Annual Retainer and Meeting Fees for a Director Year, the number
of shares of Stock subject to the Annual Stock Unit Award and Committee Chair
Retainer for a Director Year , and the applicable Ratio for Options granted
during a Director Year, provided that any adjustment in such amounts or numbers
shall be subject to the approval of the Board.

                  (b) On the date of each Annual Meeting, commencing with
the 2000 Annual Meeting, each person who has served as a Director for at least
90 days preceding such Annual Meeting shall receive an Annual Stock Unit Award
of 2,000 Stock Units, which amount shall be subject to adjustment in future
Director Years as contemplated in Section 4(a) hereof. If an individual is first
elected as Director during a Director Year, at the earliest of 90 days following
such election, he or she shall receive a prorated Annual Stock Unit Award for
the remaining balance of the Director Year.

                  (c) On the date of each Annual Meeting, commencing with the
2000 Annual Meeting, each Director who has served as the Chairman of a Committee
for at least 90 days preceding such Annual Meeting shall receive an Committee
Chair Retainer of 500 Stock Units, which amount shall be subject to adjustment
in future Director Years as contemplated in Section 4(a) hereof. If a Director
is elected as the Chairman of a Committee during a Director Year, at the
earliest of 90 days following such election, he or she shall receive a prorated
Committee Chair Retainer for the remaining balance of the Director Year.

         5. FEES. Each Director shall be entitled to receive Fees with respect
to each Director Year in accordance with the provisions of this Section 6. Each
Director shall be given an opportunity by the Company on an annual basis to
elect ("Annual Election") to defer or to receive his or her Annual Retainer
and/or Meeting Fees: (i) in cash, (ii) in Stock Units, (iii) in a combination of
cash and Stock Units or (iv) in certain circumstances, as provided in Section 6
hereof, in Options or in a combination of cash and Options.

                  (a) The Annual Election must be in writing and shall be
delivered to the Secretary of the Company no later than the tenth day preceding

                                       4

<PAGE>   5

the date of the Annual Meeting. (The Annual Election shall be irrevocable after
the tenth day preceding the date of the Annual Meeting.) The Annual Election
shall specify the Annual Retainer and/or meeting Fees that such Director elects
to receive in cash, or Stock Units, or Options, or to defer.

                  (b) If a Director elects to receive Fees in cash, cash payment
for the Annual Retainer shall be paid as soon as practicable after the beginning
of a Director Year and cash payment for Meeting Fees shall be paid as soon as
practicable after each meeting. If a Director elects to receive Stock Units in
lieu of the Annual Retainer, the Director shall receive Stock Units (including
fractional Stock Units) with respect to Stock having a Fair Market Value (on the
date of the Company's Annual Meeting) equal to 110% of the Annual Retainer. If a
Director elects to receive Stock Units in lieu of the Meeting Fees, the Director
shall receive Stock Units (including fractional Stock Units) at the Annual
Meeting at the end of the Director Year for which the election was made having a
Fair Market Value (determined as of such following Annual Meeting) equal to 110%
of the Meeting Fees earned during such Director Year.

                  (c) If a Director elects to defer all or a portion of the
Fees, such deferred Fees shall be credited to the deferred account established
for each Director in accord with the Kaufman and Broad Home Corporation
Directors Deferred Compensation Plan.

                  (d) Any person who becomes a Director following an Annual
Meeting, whether by appointment or election as a Director (or by change in
status from a full-time employee), shall receive an Annual Retainer prorated for
the balance of that Director Year. In the event a Director voluntarily resigns
from the Board during a Director Year, (i) the Director shall return to the
Company any cash payment covering the prorated portion of the Annual Retainer
for the balance of that Director Year, (ii) the Director shall forfeit a
percentage of any Stock Units or Options awarded (or if an option has been
exercised, the Director shall return to the Company a cash amount equal to the
taxable amount realized by the Director on the date of the Option exercise)
prorated for the balance of the portion of the Director Year (if any) as to
which such Stock Units or Options were awarded, and (iii) any Fees credited to
the Deferred Account, in respect of the prorated portion of the Annual Retainer
for the balance of that Director Year shall be forfeited. No return of any
portion of the Annual Retainer shall be required in the event a Director leaves
the Board as the result of retirement, incapacity or death.

6.  OPTION AWARDS IN LIEU OF FEES OR STOCK UNITS.

                  (a) On the date of each Annual Meeting, commencing with the
2000 Annual Meeting, each person who has served as a Director for at

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<PAGE>   6

least 90 days preceding such Annual Meeting and who as of such Annual Meeting
beneficially owns at least 10,000 Stock Units or shares of Stock, shall be
entitled to elect to receive an Award of Options in lieu of the Annual Retainer,
Committee Chair Retainer, Meeting Fees and/or Annual Stock Unit Award that such
Director otherwise would be entitled to receive. If a Director elects to receive
Options in lieu of the Annual Retainer, the Annual Stock Unit Award, or the
Committee Chair Retainer, the Director shall receive Options on the date of the
Company's Annual Meeting. If a Director elects to receive Options in lieu of the
Meeting Fees, the Director shall receive Options at the Annual Meeting at the
end of the Director Year for which the election was made.

                  (b) The number of shares of Stock subject to an Option granted
in lieu of the Annual Retainer or Meeting Fees shall equal the number of shares,
rounded up to the nearest whole number, obtained by dividing (i) 110% of the
dollar amount of such retainer or fee, by (ii) the product of the Ratio and the
Fair Market Value of a share of Stock on the date of the Award. The number of
shares of Stock subject to an Option granted in lieu of the Annual Stock Unit
Award and/or the Committee Chair Retainer shall equal the number of shares,
rounded up to the nearest whole number, obtained by dividing (i) the Fair Market
Value of the number of shares of Stock subject to the Annual Stock Unit Award
and/or the Committee Chair Retainer, by (ii) the product of the Ratio and the
Fair Market Value of a share of Stock on the date of the Award.

                  (c) The price at which each share of Stock may be purchased
upon exercise of a particular Option shall be the Fair Market Value of the Stock
on the date of the Annual Meeting at which the Option is granted. 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) Each Option shall be exercisable as of the date of grant
and shall have a maximum term of 15 years from the date of grant. Except as
provided in Section 6 (d) herein, Options shall remain outstanding and fully
exercisable for one (1) year for the Date of Termination, except in the event of
removal for cause, in which case Options shall remain outstanding and fully
exercisable for 30 days.

                  (e) No Stock shall be delivered pursuant to any exercise of an
Option until the Director 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 Stock that have been acquired
or held by the Director in such manner as to not result in an accounting charge.

                                       6

<PAGE>   7

                  (f) 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.

         7. CONVERSION OF PRIOR AWARDS. As of the Effective Date, all Shares of
Restricted Stock outstanding under the Kaufman and Broad Home Corporation
Directors Restricted Stock Plan which are held by Directors shall be canceled.
Each Director who, immediately prior to the Effective Date, holds Restricted
Stock which shall be canceled in accordance with the immediately preceding
sentence, shall receive, in consideration for such cancellation, an Award of
Stock Units equal to the sum of number of such Director's shares of canceled
Restricted Stock.

         8. DIVIDEND EQUIVALENT PAYMENTS. Effective as of each dividend payment
date for outstanding shares of Stock, a current cash payment shall be made on
each outstanding Stock Unit to the holder thereof in an amount equal to dividend
paid on an outstanding share of Stock.

         9.  TIME OF PAYMENT.  Unless otherwise provided herein, all payments
in respect of a Director's Stock Units and in settlement of a Director's
Deferred Account shall be made as soon as practicable after the earlier of: (i)
the occurrence of a Change in Control and (ii) the Termination Date.

         10. FORM OF PAYMENT. Payment in respect of Stock Units and/or Options
shall be made in Stock or in cash, in accord with the previous annual elections
made by the Director. The Company shall not issue fractions of a share. Whenever
under the terms of the Plan a fractional share would otherwise be required to be
issued, the Director shall be paid in cash for such fractional share.

         11. STATEMENT OF ACCOUNT. Each Director shall receive an annual
statement showing the number of Stock Units that have been awarded to the
Director under the plan.

         12. CHANGE IN CAPITAL STRUCTURE. In the event of any change in the
Stock by reason of any stock dividend, split, combination of shares, exchange of
shares warrants or rights offering to purchase Stock at a price below its fair
market value, reclassification, recapitalization, merger, consolidation or other
change in capitalization, appropriate adjustment shall be made by the Committee
in the number and kind of shares subject to the Plan and any other relevant
provisions of the Plan, whose determination shall be binding and conclusive on
all persons.

                                       7

<PAGE>   8

         13. NONTRANSFERABILITY. Stock Units shall not be transferable and may
not be alienated by a Director except by will or the laws of descent and
distribution.

         14. RIGHTS. Except to the extent otherwise set forth herein, Directors
shall not have any of the rights of a stockholder with respect to the Stock
Units.

         15. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Committee. The Committee shall have full power, discretion and authority to
interpret and administer the Plan, except that the Committee shall have no power
to (a) determine the eligibility for Awards or the number of Stock Units or
timing or value of Awards to be granted to any Director, or (b) take any action
specifically delegated to the Board under the plan. With respect to any
determination contemplated in subsection (a) of the preceding sentence, the
Committee shall make recommendations to the Board, but any final determination
with respect to such recommendation shall be subject to the approval of the full
Board.

         16. AMENDMENT OR TERMINATION OF THE PLAN. The Board may, at any time,
amend or terminate the plan; but no amendment or termination shall, without the
written consent of a Director, reduce the Director's rights under previously
granted Awards or with respect to any Fees previously earned. No amendment which
requires stockholder approval in order for the Plan to continue to comply with
Rule 16b-3 shall be effective unless the same shall be approved by the requisite
vote of the stockholders of the Company. This Plan was amended and restated as
of December 6, 1999, provided that such amendment shall not affect or impair the
rights or benefits accrued by any Director under this Plan with respect to
Awards earned or granted prior to December 6, 1999, which Awards shall be
governed by the terms of the Plan as it existed prior to being amended and
restated.

         17. NO RIGHT TO RENOMINATION. Nothing in the plan or in any Award shall
confer upon any Director the right to be nominated for reelection to the Board.

         18. PAYMENTS UPON DEATH. In the event of a Director's death, payments
with respect to any Stock Units shall be made in a single lump sum payment to
the beneficiary designated by the Director, and the right to exercise any
Options shall be accorded to such beneficiary, or in the absence of an executed
beneficiary form, to the person legally entitled thereto, as designated under
his or her will, or to such heirs as determined under the laws of intestacy for
the state of his or her domicile.

         19. GOVERNING LAW. The plan and all actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of
California.

                                       8

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