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EXHIBIT 10.17
KAUFMAN AND BROAD HOME CORPORATION
NON-EMPLOYEE DIRECTORS STOCK UNIT PLAN
1. PURPOSE OF THE PLAN. The purpose of the Kaufman and Broad Home
Corporation Non-Employee Directors Stock Unit Plan ("Plan") is to grant Awards
of Stock Units 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 (ii) the payment of Directors'
Annual Retainer and Meeting Fees in cash or Stock Units. The effective date of
the Plan is September 26, 1996.
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 (i) services as a Director on the Board for a
Director Year and (ii) for services as Chairman of a committee of the Board of
Directors for a Director Year.
"AWARD" shall mean an award of Stock Units 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 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
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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.
"COMMITTEE" shall mean the Nominating and Corporate Governance
Committee of the Board or such other committee as may be designated by the
Board.
"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.
"FEES" shall mean the sum, for any Director Year, of the Annual
Retainer and the meeting Fees and Per Diem 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.
This term shall include all fees paid to a Director for extraordinary or
special Board and/or committee meetings.
"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.
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"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 Common 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.
"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 STOCK UNIT AWARDS.
(a) On the Effective Date, each Director shall receive a
one-time Award of 700 Stock Units.
(b) On the date of each Annual Meeting, commencing with
the 1997 Annual Meeting, each person who has served as a Director for at least
90 days preceding such Annual Meeting shall receive an Award of Stock Units.
The initial annual Award to each Director shall be 1200 Stock Units; provided,
that such amount shall be subject to adjustment from time to time in the
discretion of the Committee; provided, further, that any such adjustment shall
be subject to the approval of the Board.
5. FEES. Each Director shall be entitled to receive Fees with
respect to each Director Year in accordance with the provisions of this Section
5. Each Director shall be given an opportunity by the Company on an annual
basis to elect ("Annual Election") to receive his or her Annual Retainer and
Meeting Fees: (i) in cash, (ii) in Stock Units, or (iii) in a combination of
cash and Stock Units.
(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 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 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
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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) any Stock Units 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. 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.
7. 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.
8. 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.
9. FORM OF PAYMENT. Payment in respect of Stock Units 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.
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10. 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.
11. 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.
12. NONTRANSFERABILITY. Stock Units shall not be transferable by a
Director except by will or the laws of descent and distribution.
Notwithstanding the above, Stock Units shall be transferable to the extent the
Company concludes that nontransferability is not then required in order for the
Plan to continue to comply with Rule 16b-3.
13. 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.
14. 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.
15. 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. To the extent then
required in order for the plan to continue to comply with Rule 16b-3, the Plan
may not be amended more than once every six months other than to comply with
the changes in the Internal Revenue Code of 1986, as amended, or ERISA or rules
thereunder.
16. 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.
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17. 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, 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.
18. 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.
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