Directors' Restricted Stock Plan - KB Home
KAUFMAN AND BROAD HOME CORPORATION
DIRECTORS' RESTRICTED STOCK PLAN
SECTION 1. PURPOSE. The purpose of the Kaufman and Broad Home
Corporation Directors' Restricted Stock Plan (the "Plan") is to promote the
success of Kaufman and Broad Home Corporation (the "Company") and enhancing the
stock ownership of directors of the Company by providing a method whereby
directors who are not employees of the Company or any of its affiliated
companies (a "Participant") may elect to receive their annual Board and
Committee Chairman retainers (an "Annual Retainer") and/or meeting fees
("Meeting Fees") in restricted shares of the Company's Common Stock, par value
$1.00 per share ("Common Stock").
SECTION 2. FEES. Each Participant shall be given an opportunity by
the Company on an annual basis to elect (an "Annual Election") to receive his or
her Annual Retainer and/or Meeting Fees in restricted shares of Common Stock as
follows:
A. ANNUAL RETAINER. If selected, the value of the
restricted shares of Common Stock payable in lieu of an Annual Retainer shall
equal 110% of the amount of the Annual Retainer and shall be paid in one grant
as soon as practicable after the Company's Annual Meeting of Stockholders at the
beginning of the Director Year, with the number of shares granted determined by
the Fair Market Value (as defined in Section 5 hereof) on the date of such
Annual Meeting of the Stockholders.
B. MEETING FEES. If selected, the value of shares of Common
Stock payable in lieu of the Meeting Fees earned during a Director Year shall
equal 110% of the amount of such Meetings Fees and shall be paid as soon as
practicable after the Company's Annual Meeting of Stockholders at the end of the
Director Year, with the number of shares granted being determined by the Fair
Market Value on the date of said Annual Meeting of Stockholders.
C. ALL FEES. If a Participant elects to receive his or her
Annual Retainer and Meeting Fees in shares of Common Stock, the number of such
shares shall be determined as provided in this Section 2, and will be paid in
one grant as soon as possible after each Annual Meeting of Stockholders, with
the Annual Retainer being paid for the ensuing Director Year and the Meeting
Fees being paid for the preceding Director Year.
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SECTION 3. SHARE RESTRICTIONS. All Restricted Shares issued to a
Participant in lieu of cash payments for the Annual Retainer and/or Meeting Fees
shall be subject to the restriction that they may not be sold or transferred
until the earliest to occur of the following:
A. five years shall lapse from the date the applicable
shares are credited to the Participant's account (the "Restriction Period");
B. the Participant's death or disability;
C. the Participant retires from the Board at the mandatory
retirement age;
D. the Participant, after being nominated to the Board, is
not elected by the shareholders in an election for the Board;
E. the Board determines that the Participant will not be
nominated for election to the Board;
F. the Participant's service on the Board terminates because
of his or her resignation at the request of the Nominating Committee of the
Board or his or her removal by action of the Company's stockholders;
G. the Participant's service on the Board terminates because
the Participant has taken a position with a governmental agency in public
service that does not permit membership on the board of directors of a
publicly-held corporation; or
H. the occurrence of a Change in Ownership as defined in the
Company's 1988 Employee Stock Plan, or any successor plan thereto.
All shares of Common Stock subject to the forgoing restrictions are
herein referred to as "Restricted Shares."
SECTION 4. LAPSING AND FORFEITURE. In the event the restrictions on
Restricted Shares lapse upon the occurrence of any of the events specified in
Section 3 hereof, a certificate for the applicable shares of Common Stock, free
and clear of all restrictions, will be delivered to the Participant soon as
practicable thereafter. If the Participant's service on the Board terminates
prior to the end of the Restriction Period for any reason other than those
identified in Section 3 hereof, including voluntary resignation, the Participant
shall immediately forfeit the shares to the Company.
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SECTION 5. SHARE CERTIFICATES, VOTING AND OTHER RIGHTS.
A. SHARE CERTIFICATES. The certificates for Restricted
Shares issued under Section 4 hereof may be registered in the name of the
Participant, or in the name of the Participant and one other individual as joint
tenants, and shall be held by the Company during the Restriction Period. Any
dividends, or distributions, payable in cash or in kind with respect to the
Restricted Shares that have been issued, shall be paid to the Participant. All
Restricted Shares issued hereunder shall be fully paid and non-assessable and
the Participant shall have all voting rights with respect thereto. The Company
shall pay all original issue taxes with respect to the issue of shares and all
other fees and expenses necessarily incurred by Company in connection therewith.
B. FAIR MARKET VALUE. "Fair Market Value" means, as of any
valuation date, the median of the high and low trading price of Kaufman and
Broad Home Corporation Common Stock, par value $1.00 per share, as quoted in the
New York Stock Exchange Composite Transactions on such date, as reported in the
Wall Street Journal (or, if there is no reported sale on such date, on the last
preceding date on which any reported sale occurred).
C. FRACTIONS OF SHARES. The Company shall not issue
fractions of shares. Whenever under the terms of the Plan, a fractional share
would otherwise be required to be issued, the Participant shall be paid in cash
for such fractional share; or for Participants electing to receive Meeting Fees
in stock, the unpaid amount shall be added to the fees for the next quarterly
period.
D. GENERAL RESTRICTIONS. The issuance of Common Stock
underlying the Restricted Shares or the delivery of certificates for such shares
to Participants under the Plan shall be subject to the requirement that, if at
any time the General Counsel or Corporate Secretary of the Company shall
reasonably determine, in his or her discretion, that the listing, registration,
or qualification of such Common Stock upon any securities exchange or under any
state or federal law, or the consent or approval of any governmental body, is
necessary or desirable as a condition of, or on connection with, the issuance or
payment or delivery shall not take place unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not reasonably acceptable to the General Counsel or Corporate
Secretary.
E. SHARES AVAILABLE. Shares of Common Stock issuable under
the Plan shall be acquired by the Company on the open market or shall be taken
from authorized but unissued or treasury shares of the Company, as shall from
time to time be necessary for issuance pursuant to the Plan.
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F. CHANGE IN CAPITAL STRUCTURE. In the event of any change
in the Common Stock by reason of any stock dividend, split, combination of
shares, exchange of shares, warrants or rights offering to purchase Common 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 Company 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.
SECTION 6. TAXES. No income will be recognized by a Participant
at the time of issuance of Restricted Shares, unless an election under Internal
Revenue Code Section 83(b) is made by the Participant. The Company shall be
authorized to withhold from any payment due under the Plan the amount of
withholding taxes, if any, due in respect of an award hereunder, unless other
provisions satisfactory to the Company shall have been made for the payment of
such taxes.
SECTION 7. MISCELLANEOUS
A. ADMINISTRATION. Except as may be specifically provided
elsewhere herein, the Plan shall be administered by the Nominating and Corporate
Governance Committee of the Board (the "Nominating Committee"), which shall have
full authority to construe and interpret the Plan, to establish, amend and
rescind rules and regulations relating to the Plan, and to take all such actions
and make all such determinations in connection with the Plan as it may deem
necessary or desirable. The Nominating Committee may from time to time make
such amendments to the Plan, or an award made hereunder, as it may deem proper,
necessary, and in the best interests of the Company.
B. RIGHTS OF DIRECTORS. Nothing in the plan shall confer
upon any Participant any right to serve on the Board for any period of time or
to continue his or her current or any other rate of compensation.
C. GOVERNING LAW. The Plan and all actions taken thereunder
shall be governed and construed in accordance with the laws of the State of
Delaware.