SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO.___)
Filed by the Registrantoþ
Filed by a Party other than the Registranto
Check the appropriate box:
Definitive Proxy Statement | ||
Preliminary Proxy Statement | ||
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
o | Definitive Additional Materials | |
o | Soliciting Material Pursuant to §240.14a-12 |
KB HOME
KB HOME
Payment of Filing Fee (Check the appropriate box):
No fee required. | |||||
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. | ||||
(1) | Title of each class of securities to which transaction applies: | ||||
(2) | Aggregate number of securities to which transaction applies: | ||||
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | ||||
(4) | Proposed maximum aggregate value of transaction: | ||||
(5) | Total fee paid: | ||||
o | Fee paid previously with preliminary materials. | ||||
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | ||||
(1) | Amount Previously Paid: | ||||
(2) | Form, Schedule or Registration Statement No.: | ||||
(3) | Filing Party: | ||||
(4) | Date Filed: |
Time and Date: | 9:00 a.m. Pacific Daylight Time on Thursday, April | |||
Location: | ||||
Items of Business: | (1) | Elect three | ||
(2) Ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for | ||||
(3) Consider | ||||
The accompanying Proxy Statement describes these items in more detail. We have not received notice of any other matters that may be properly presented at the meeting. | ||
Record Date: | You can vote at the meeting and at any postponement or adjournment of the meeting if you were a stockholder of record on February 14, | |
If you plan to attend the meeting, you may be asked to present photo identification and you may be accompanied by only one guest. If you hold your shares of our common stock in a brokerage or similar account (in “street name”), you will need to bring a statement reflecting the shares you owned on February 14, | ||
Proxy Voting: | Whether or not you expect to attend the meeting, please promptly complete and return the | |
Annual Report: | Copies of our Annual Report on Form 10-K for the fiscal year ended November 30, | |
Internet Availability of Materials: | This Notice of 2008 Annual Meeting of Stockholders and the accompanying Proxy Statement, a sample proxy card and our Annual Report on Form 10-K for the fiscal year ended November 30, 2007 may be viewed, printed and downloaded from the Internet at www.kbhome.com/investor/proxy. |
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Management | Nominating and | ||||||||||||||||
Audit and | Development and | Corporate | |||||||||||||||
Name of Director | Compliance | Compensation | Governance | Executive | |||||||||||||
Independent Directors | |||||||||||||||||
Ronald W. Burkle | X | X | |||||||||||||||
Timothy W. Finchem | X | X | |||||||||||||||
Dr. Ray R. Irani | X | * | X | * | |||||||||||||
Kenneth M. Jastrow, II(a) | X | † | |||||||||||||||
James A. Johnson(b) | X | X | * | ||||||||||||||
J. Terrence Lanni | X | X | |||||||||||||||
Melissa Lora | X | ||||||||||||||||
Michael G. McCaffery | X | * | X | ||||||||||||||
Leslie Moonves | X | ||||||||||||||||
Luis G. Nogales | X | X | X | ||||||||||||||
Employee Director(c) | |||||||||||||||||
Jeffrey T. Mezger | X | ||||||||||||||||
Number of Meetings in Fiscal 2006 | 10 | (d) | 3 | 3 | 1 | ||||||||||||
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Nominating/ | |||||||||||||||
Director | Audit | Compensation | Governance | ||||||||||||
Mr. Burkle | X | X | |||||||||||||
Mr. Finchem | X | X | |||||||||||||
Mr. Jastrow | X | ||||||||||||||
Mr. Johnson | X | ||||||||||||||
Mr. Lanni | X | * | |||||||||||||
Ms. Lora | X | X | |||||||||||||
Mr. McCaffery | X | * | X | ||||||||||||
Mr. Moonves | X | * | |||||||||||||
Mr. Nogales | X | X | |||||||||||||
Number of Meetings: | 9 | (a) | 7 | 5 | |||||||||||
X = Member * = Chair |
(a) |
Includes quarterly conference calls with our management to review our earnings releases prior to their |
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• | corporate accounting and reporting practices, including the quality and integrity of our financial statements and reports; | |
• | internal control over financial reporting and disclosure controls and procedures; | |
• | audit process, including | |
• | compliance with legal and regulatory requirements and management of matters in which we have or may have material liability exposure. |
• | the evaluation and compensation of | |
• | oversight and approval of the general design of our executive compensation and benefit programs; |
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• | our efforts to attract, develop, promote and | |
• | the evaluation and determination of non-employee director compensation. |
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Fees Earned | |||||||||||||||||||||||||||
or Paid | Stock | Option | All Other | ||||||||||||||||||||||||
in Cash | Awards | Awards | Compensation | Total | |||||||||||||||||||||||
Name | ($)(a) | ($)(b) | ($)(b) | ($)(c) | ($) | ||||||||||||||||||||||
Mr. Bollenbach | $ | 225,000 | $ | 0 | $ | 108,755 | $ | 0 | $ | 333,755 | |||||||||||||||||
Mr. Burkle | 33,320 | (1,026,256 | ) | (2,606,087 | ) | 0 | (3,599,023 | ) | |||||||||||||||||||
Mr. Finchem | 61,826 | (88,739 | ) | 0 | 16,390 | (10,523 | ) | ||||||||||||||||||||
Mr. Jastrow | 59,282 | (829,849 | ) | 0 | 13,545 | (757,022 | ) | ||||||||||||||||||||
Mr. Johnson | 53,241 | (1,364,321 | ) | (3,016,948 | ) | 32,181 | (4,295,847 | ) | |||||||||||||||||||
Mr. Lanni | 24,526 | (453,505 | ) | 0 | 0 | (428,979 | ) | ||||||||||||||||||||
Ms. Lora | 72,112 | (405,548 | ) | 0 | 9,960 | (323,476 | ) | ||||||||||||||||||||
Mr. McCaffery | 66,102 | (283,391 | ) | (214,288 | ) | 13,545 | (418,032 | ) | |||||||||||||||||||
Mr. Moonves | 22,562 | (393,014 | ) | 0 | 16,390 | (354,062 | ) | ||||||||||||||||||||
Mr. Nogales | 55,080 | (1,420,962 | ) | (48,394 | ) | 0 | (1,414,276 | ) | |||||||||||||||||||
Former Non-Employee Director | |||||||||||||||||||||||||||
Dr. Irani | 93,047 | (1,738,968 | ) | (1,094,079 | ) | 0 | (2,740,000 | ) | |||||||||||||||||||
(a) | Fees Earned or Paid in Cash: Except as discussed in this footnote, the amounts reported in this column reflect the aggregate Director Plan stock unit dividend equivalent payments paid to non-employee directors during our 2007 fiscal year. Non-employee directors who have accumulated larger Director Plan stock unit holdings based on their tenure and their annual elections received higher aggregate dividend equivalent payments. The amount reported for Mr. Bollenbach reflects only the portion of his $300,000 annual Chairman retainer paid in our 2007 fiscal year. We will pay the remaining $75,000 prior to the date of the Annual Meeting. The respective amounts reported for Messrs. Finchem and McCaffery and Ms. Lora also include the one-time $50,000 payment each received for their service in directing the Review. The amount reported for Dr. Irani also includes the pro-rated annual cash retainer he was paid for his service in the 2007 Director Year corresponding to his resignation from the Board on November 1, 2007. Dr. Irani was the only non-employee director who |
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elected to receive his 2007 Director Year annual retainer in cash. The 2007 Director Year began on April 5, 2007, the date of our 2007 Annual Meeting of Stockholders, and it ends on April 2, 2008. | ||
(b) | Stock and Option Awards: The amounts reported in each of these columns reflect the aggregate compensation expense we recognized in our 2007 fiscal year for Director Plan stock unit and stock option awards, respectively, computed in accordance with Statement of Financial Accounting Standards No. 123 (revised 2004),“Share-Based Payment” (“SFAS 123(R)”) (disregarding estimates of forfeitures related to service-based vesting conditions). Information used in determining these amounts can be found in Note 15 of the Notes to the Consolidated Financial Statements contained in our Annual Report on Form10-K for the fiscal year ended November 30, 2007. The negative values reported in these columns are due to the decline in the market price of our common stock between November 30, 2006 and November 30, 2007. The Director Plan stock units and stock options were granted on April 5, 2007, the date of our 2007 Annual Meeting of Stockholders. Listed below are the respective Director Plan stock units and stock options granted to each non-employee director in accordance with their elections and the corresponding grant date fair value computed in accordance with SFAS 123(R). |
Grant Date | |||||||||||||||||
Stock Units | Stock Options | Fair Value | |||||||||||||||
Name | (#) | (#) | ($) | ||||||||||||||
Mr. Bollenbach | 0 | 23,540 | $ | 455,264 | |||||||||||||
Mr. Burkle | 0 | 23,540 | 455,264 | ||||||||||||||
Mr. Finchem | 6,263 | 0 | 265,676 | ||||||||||||||
Mr. Jastrow | 6,263 | 0 | 265,676 | ||||||||||||||
Mr. Johnson | 6,263 | 0 | 265,676 | ||||||||||||||
Mr. Lanni | 6,863 | 0 | 291,128 | ||||||||||||||
Ms. Lora | 6,263 | 0 | 265,676 | ||||||||||||||
Mr. McCaffery | 0 | 27,540 | 532,624 | ||||||||||||||
Mr. Moonves | 6,863 | 0 | 291,128 | ||||||||||||||
Mr. Nogales | 6,263 | 0 | 265,676 | ||||||||||||||
Former Non-Employee Director | |||||||||||||||||
Dr. Irani | 2,334 | 0 | 99,008 | ||||||||||||||
Mr. Lanni received an additional 600 stock units for his service as the Compensation Committee Chair and Mr. Moonves received an additional 600 stock units for his service as the Nominating/Governance Committee Chair. Mr. McCaffery received 4,000 stock options for his service as Audit Committee Chair by electing to receive his 1,000 stock unit retainer grant in stock options. As required under the Director Plan, Dr. Irani forfeited 1,666 stock units due to his resignation from the Board on November 1, 2007. All other stock unit and stock option amounts reflect the Director Plan cash retainer and stock unit grant the non-employee directors elected to receive in Director Plan stock units or, for Messrs. Bollenbach, Burkle and McCaffery, in Director Plan stock options. |
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Listed below are each respective non-employee director’s aggregate Director Plan stock unit and stock option holdings as of February 25, 2008. |
Total | |||||||||||||||||
Stock Units | Stock Options | Holdings | |||||||||||||||
Name | (#) | (#) | (#) | ||||||||||||||
Mr. Bollenbach | 0 | 23,540 | 23,540 | ||||||||||||||
Mr. Burkle | 33,320 | 165,155 | 198,475 | ||||||||||||||
Mr. Finchem | 13,392 | 0 | 13,392 | ||||||||||||||
Mr. Jastrow | 37,454 | 0 | 37,454 | ||||||||||||||
Mr. Johnson | 54,807 | 143,957 | 198,764 | ||||||||||||||
Mr. Lanni | 26,242 | 0 | 26,242 | ||||||||||||||
Ms. Lora | 23,678 | 0 | 23,678 | ||||||||||||||
Mr. McCaffery | 9,201 | 73,609 | 82,810 | ||||||||||||||
Mr. Moonves | 24,278 | 0 | 24,278 | ||||||||||||||
Mr. Nogales | 56,646 | 2,130 | 58,776 | ||||||||||||||
Upon his resignation from the Board on November 1, 2007, and in accordance with his elections and the Director Plan’s terms, we paid Dr. Irani $1,591,801 for the 61,507 stock units he held on November 1, 2007 based on the $25.88 closing price of our common stock on that date. Dr. Irani also held 37,628 Director Plan stock options on November 1, 2007 with various exercise prices. Dr. Irani exercised 36,182 of these Director Plan stock options on January 18, 2008, and we paid him $186,760 in cash, the sum total of the respective positive differences between the Director Plan stock options’ exercise prices and the $18.52 closing price of our common stock on the exercise date. Dr. Irani has until October 31, 2008 to exercise his remaining 1,446 Director Plan stock options. If he exercises his remaining Director Plan stock options, we will pay Dr. Irani the sum total of the respective positive differences between the Director Plan stock options’ exercise prices and the closing price of our common stock on the exercise date. | ||
(c) | All Other Compensation: The amounts reported in this column represent premium payments for the life insurance policies we maintain to fund charitable donations under the Directors Legacy Program, which is described below. Messrs. Bollenbach and Lanni do not participate in the program. No additional premium payments are currently required for the program donations for each of Messrs. Burkle and Nogales and Dr. Irani. In our 2007 fiscal year, we paid a total of $201,214 in life insurance premiums for all participants, including former directors. Premium payments vary depending on participants’ respective ages and other factors. The total dollar amount payable under the program at November 30, 2007 was $15,700,000. If all current participating directors were vested in the full donation amount, the total dollar amount payable under the program at November 30, 2007 would have been $17,300,000. |
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Stephen F. Bollenbach, age 65, was the Co-Chairman and Chief Executive Officer of Hilton Hotels Corporation, positions he held from May 2004 and February 1996, respectively. He retired from Hilton in October of 2007. Prior to joining Hilton, Mr. Bollenbach was Senior Executive Vice President and Chief Financial Officer for The Walt Disney Company from 1995 to 1996. Before Disney, Mr. Bollenbach was President and Chief Executive Officer of Host Marriott Corporation from 1993 to 1995, and served as Chief Financial Officer of Marriott Corporation from 1992 to 1993. From 1990 to 1992, Mr. Bollenbach was Chief Financial Officer of the Trump Organization. Mr. Bollenbach serves a director of Harrah’s Entertainment, Inc., Time Warner Inc., Macy’s, Inc. and American International Group, Inc. Mr. Bollenbach joined the Board as Chairman in 2007. |
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Timothy W. Finchem,age 60, has been Commissioner of the PGA TOUR since 1994. He joined the TOUR staff as Vice President of Business Affairs in 1987, and was promoted to Deputy Commissioner and Chief Operating Officer in 1989. Mr. Finchem served in the White House as Deputy Advisor to the President in the Office of Economic Affairs in 1978 and 1979, and in the early 1980’s, co-founded the National Marketing and Strategies Group in Washington, D.C. He joined the Board in 2005. |
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J. Terrence Lanni,age 64, has been Chairman of MGM MIRAGE since July 1995, and Chief Executive Officer from June 1995 to December 1999, and since March 2000. Before joining MGM MIRAGE, Mr. Lanni was President and Chief Operating Officer of Caesars World, Inc. from April 1981 to February 1995. Mr. Lanni has been a director since 2003. |
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Ron Burkle,age 55, is the founder and managing partner of The Yucaipa Companies, a private investment firm based in Southern California. Yucaipa specializes in acquisitions, mergers and management of large retail, manufacturing and distribution companies. Mr. Burkle has served as Chairman of the Board and controlling shareholder of numerous companies including Alliance Entertainment, Dominick’s, Fred Meyer, Ralphs and Food4Less. He is currently a member of the boards of Occidental Petroleum Corporation and Yahoo! Inc. He has been a director since 1995 and his current term expires in 2010. |
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Kenneth M. Jastrow, II,age 60, currently Non-Executive Chairman of Guaranty Financial Group Inc. and Forestar Real Estate Group Inc., served as Chairman and Chief Executive Officer of Temple-Inland Inc. from 2000 to 2007. Prior to that, Mr. Jastrow served as President and Chief Operating Officer in 1998 and 1999, Group Vice President from 1995 until 1998, and as Chief Financial Officer of Temple-Inland from November 1991 until 1999. Mr. Jastrow is also a director of MGIC Investment Corporation. He joined the Board in 2001 and his current term expires in 2009. |
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Melissa Lora,age 45, is the Chief Financial Officer of Taco Bell Corp., a position that she has held since 2001. Ms. Lora joined Taco Bell Corp. in 1987 and has held various positions throughout the company, most recently acting as Regional Vice President and General Manager from 1998 to 2000 for Taco Bell’s operations throughout the Northeastern United States. Ms. Lora joined the Board in 2004 and her current term expires in 2009. |
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Michael G. McCaffery,age 54, is the Chief Executive Officer of Makena Capital Management. From 2000 to 2006, Mr. McCaffery was President and CEO of the Stanford Management Company (SMC), which was established in 1991 to manage Stanford University’s financial and real estate investments. Previous to joining SMC, Mr. McCaffery was President and Chief Executive Officer of Robertson Stephens Investment Bankers from January 1993 to December 1999, and also served as Chairman from January 2000 to December 2000. Mr. McCaffery is a director of the Lucile Salter Packard Children’s Hospital, Thomas Weisel Partners Group, Inc., Western Technology Ventures, Savvian, LLC and RS Investment Trust, is a member of the Advisory Boards of Accel Ventures, Silver Lake Partners and Stanford University’s Graduate School of Business, and serves as a trustee for the Rhodes Trust. Mr. McCaffery was elected to the Board in 2003 and his current term expires in 2009. |
Leslie Moonves,age 58, is President and Chief Executive Officer and a Director of CBS Corporation and most recently was Co-President and Co-Chief Operating Officer of Viacom, which title he held from June 2004 to December 2005. Mr. Moonves previously served as President and Chief Executive Officer of CBS from 1998 to 2004, and served as its Chairman from 2003 to 2005. He joined CBS in 1995 as President, CBS Entertainment. Prior to that, Mr. Moonves was President of Warner Bros. Television from 1993, when Warner Bros. and Lorimar Television combined operations. From 1989 to 1993, he was President of Lorimar Television. Mr. Moonves joined the Board in 2004 and his current term expires in 2010. |
Luis G. Nogales,age 64, is the Managing Partner of Nogales Investors, LLC, a private equity investment firm. He was Chairman and Chief Executive Officer of Embarcadero Media, Inc. from 1992 to 1997, President of Univision Communications, Inc., from 1986 to 1988, and Chairman and Chief Executive Officer of United Press International from 1983 to 1986. He is a director of Southern California Edison Co., Edison International and Arbitron Inc. Mr. Nogales has been a director since 1995 and his current term expires in 2010. |
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• | Establishes performance targets for | |
• | Limits payment under the annual and performance-vested long-term incentive components of the Plan to when the Company’s performance on its selected financial performance metrics exceeds peer group median performance. |
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• | The company does not disclose the percentage breakdown of | |
• | Stock options | |
• | Restricted stock awards do | |
• | Performance units are based only on internal targets, and those targets are not disclosed. |
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Amount and Nature of | Holdings of Stock-Based | |||||||
Non-Employee Directors | Beneficial Ownership (a – c) | Awards under Director Plan (d) | ||||||
Ronald W. Burkle | 1,000 | 174,935 | ||||||
Timothy W. Finchem | — | 7,129 | ||||||
Dr. Ray R. Irani | 10,000 | 96,801 | ||||||
Kenneth M. Jastrow, II | — | 31,191 | ||||||
James A. Johnson | — | 192,501 | ||||||
J. Terrence Lanni | — | 19,379 | ||||||
Melissa Lora | 2,027 | 17,415 | ||||||
Michael G. McCaffery | — | 55,270 | ||||||
Leslie Moonves | — | 17,415 | ||||||
Luis G. Nogales | 7,400 | 52,513 |
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Amount and Nature of | Holdings of Stock-Based | |||||
Named Executive Officers | Beneficial Ownership (a – c) | Awards under Director Plan (d) | ||||
Jeffrey T. Mezger | 1,821,465 | N/A | ||||
Domenico Cecere | 259,883 | N/A | ||||
Robert Freed | 145,503 | N/A | ||||
William R. Hollinger | 250,262 | N/A | ||||
Kelly Masuda | 42,029 | N/A | ||||
Bruce Karatz | 4,528,183 | N/A | ||||
All Directors, Director nominees and current executive officers as a group (16 people) | 2,591,743 | 664,549 | ||||
Amount and Nature | ||||||||||||
of Beneficial | Percent | |||||||||||
Non-Employee Directors | Ownership (a - c) | of Class | ||||||||||
Mr. Bollenbach | — | * | ||||||||||
Mr. Burkle | 1,000 | * | ||||||||||
Mr. Finchem | — | * | ||||||||||
Mr. Jastrow | — | * | ||||||||||
Mr. Johnson | — | * | ||||||||||
Mr. Lanni | — | * | ||||||||||
Ms. Lora | 2,043 | * | ||||||||||
Mr. McCaffery | — | * | ||||||||||
Mr. Moonves | — | * | ||||||||||
Mr. Nogales | 7,400 | * | ||||||||||
Named Executive Officers | ||||||||||||
Jeffrey T. Mezger | 1,942,053 | 2.1 | % | |||||||||
Domenico Cecere | 186,789 | * | ||||||||||
William R. Hollinger | 259,404 | * | ||||||||||
Glen W. Barnard | 58,170 | * | ||||||||||
Kelly K. Masuda | 50,005 | * | ||||||||||
All directors and executive officers as a group (17 people) | 2,517,364 | 2.8 | % | |||||||||
(a) | Included are shares of | |
(b) | Included are | |
(c) | ||
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Amount and Nature | Percent | |||||||
of Beneficial | of | |||||||
Name and Address of Beneficial Owner | Ownership | Class | ||||||
KB Home Grantor Stock Ownership Trust, Wachovia Bank, N.A., as Trustee, Institutional Trust and Retirement Services 101 North Main Street Winston-Salem, North Carolina 27150 | 12,337,882 | (a) | 13.8% | |||||
Marsico Capital Management, LLC 1200 17th Street, Suite 1600 Denver, Colorado 80202 | 8,250,187 | (b) | 9.2% | |||||
FMR Corp. and Edward C. Johnson 3d 82 Devonshire Street Boston, Massachusetts 02109 | 6,967,654 | (c) | 7.8% | |||||
Jeffrey L. Gendell 55 Railroad Avenue Greenwich, Connecticut 06830 | 6,036,188 | (d) | 6.8% |
Amount and Nature | ||||||||||||
of Beneficial | Percent | |||||||||||
Name and Address of Beneficial Owner | Ownership | of Class | ||||||||||
KB Home Grantor Stock Ownership Trust (a) | 12,148,482 | 13.6 | % | |||||||||
Wachovia Executive Benefits Group One West Fourth Street - NC 6251 Winston-Salem, North Carolina 27101 | ||||||||||||
FMR LLC and Edward C. Johnson 3d (b) | 11,589,788 | 12.9 | % | |||||||||
82 Devonshire Street Boston, Massachusetts 02109 | ||||||||||||
AXA Financial, Inc., et al. (c) | 10,006,055 | 11.2 | % | |||||||||
1290 Avenue of the Americas New York, NY 10104 | ||||||||||||
(a) | The KB Home Grantor Stock Ownership Trust | |
The |
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(b) | ||
The stock holding information reported in the table above and in this footnote is based solely on an amendment to Schedule 13G dated February 14, |
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(c) | The stock holding information reported in the table above and in this footnote is based solely on |
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Compensation Element | Purpose / Description | |||
Base Salary | Provide competitive fixed income for performance ofday-to-day position responsibilities. Consists of semi-monthly cash payments. | |
Short-Term Incentives | Build accountability and reward achievement of annual goals that support short-term business objectives. Consists primarily of cash payments made after the relevant fiscal year. | |
Long-Term Incentives | Promote retention and provide link between executive compensation and stockholder value creation over a multi-year period. Consists primarily of the following equity-based awards, which are either cash-or stock-settled: | |
• Stock Options/Stock Appreciation Rights (“SARs”) | Provide compensation tied to the price of our common stock and paid in stock or cash. The awards have no value if our common stock price falls below the grant price. | |
• Restricted Stock/Phantom Shares | Provide equity-based compensation tied to the performance of our common stock price to promote retention and to mitigate cyclical industry/market volatility associated with stock options/SARs. | |
Executive Benefits | The following provide competitive health and welfare support to enhance recruitment and promote retention: | |
• Executive Life Insurance | Provide a death benefit to an executive’s designated beneficiary through company-owned and/or company-paid term life insurance. |
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• Retirement Plan (closed) | Contribute to financial security upon retirement through an annuity benefit. Not all of our NEOs participate in this plan and no new participants have been added to the plan since 2004. | |
• Deferred Compensation Plan | Permits deferred receipt of earned compensation into a non-qualified savings plan similar to our 401(k) Savings Plan. Amounts deferred under this plan and the 401(k) Savings Plan are eligible for a dollar-for-dollar company matching contribution up to an aggregate amount of six percent of base salary. | |
• Executive Health Benefits | Provide 100% reimbursement ofout-of-pocket medical, dental and vision expenses. | |
Discontinued Perquisites | Perquisites previously made available to all NEOs included automobile allowances, company-paid automobile fuel cards, and reimbursement of expenses for automobile insurance, annual financial planning and tax preparation services, and one-time estate planning services. These perquisites were discontinued in mid-2007. |
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• Beazer Homes | • Lennar Corporation | • Ryland Group | ||
• Centex Corporation | • MDC Holdings | • Standard Pacific | ||
• DR Horton | • NVR Incorporated | • Toll Brothers | ||
• Hovnanian Enterprises | • Pulte Homes |
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Payout as a Percentage of | ||||
Relative TSR Percentile Ranking | Performance Shares Granted | |||
<25th percentile | 0 | % | ||
25-50th percentile | 25 | % | ||
50-75th percentile | 100 | % | ||
>75th percentile | 150 | % |
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2001 | 2002 | 2003 | 2004 | 2005 | 2006 | |||||||||||||||||||
KB Home | 100 | 134 | 207 | 268 | 431 | 326 | ||||||||||||||||||
S&P 500 Homebuilding Index | 100 | 120 | 237 | 274 | 398 | 321 | ||||||||||||||||||
Dow Jones Home Construction Index | 100 | 118 | 230 | 262 | 354 | 282 | ||||||||||||||||||
S&P 500 Index | 100 | 83 | 96 | 108 | 118 | 134 |
Change in | |||||||||||||||||||||||||||||||||||||||||||||||
Pension Value | |||||||||||||||||||||||||||||||||||||||||||||||
and | |||||||||||||||||||||||||||||||||||||||||||||||
Nonqualified | |||||||||||||||||||||||||||||||||||||||||||||||
Non-Equity | Deferred | ||||||||||||||||||||||||||||||||||||||||||||||
Stock | Option | Incentive Plan | Compensation | All Other | |||||||||||||||||||||||||||||||||||||||||||
Name and | Fiscal | Salary | Bonus | Awards | Awards | Compensation | Earnings | Compensation | Total | ||||||||||||||||||||||||||||||||||||||
Principal Position | Year | ($) | ($)(a) | ($)(b) | ($)(c) | ($)(d) | ($)(e) | ($)(f) | ($) | ||||||||||||||||||||||||||||||||||||||
Jeffrey T. Mezger | 2007 | $ | 1,000,000 | $ | 6,000,000 | $ | 4,181,624 | $ | 3,743,258 | $ | 97,500 | $ | 388,632 | $ | 972,604 | $ | 16,383,618 | ||||||||||||||||||||||||||||||
President and Chief Executive Officer | |||||||||||||||||||||||||||||||||||||||||||||||
Domenico Cecere | 2007 | 595,834 | 0 | 376,181 | 90,560 | 438,500 | 86,362 | 114,295 | 1,701,732 | ||||||||||||||||||||||||||||||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||||||||||||||||||||||||||||||||||||||
William R. Hollinger | 2007 | 347,083 | 350,000 | 123,273 | 107,703 | 483,000 | 83,116 | 121,111 | 1,615,286 | ||||||||||||||||||||||||||||||||||||||
Senior Vice President and Chief Accounting Officer | |||||||||||||||||||||||||||||||||||||||||||||||
Glen W. Barnard | 2007 | 289,168 | 0 | 98,662 | 96,478 | 600,000 | 79,716 | 95,069 | 1,259,093 | ||||||||||||||||||||||||||||||||||||||
Senior Vice President, KBnxt Group | |||||||||||||||||||||||||||||||||||||||||||||||
Kelly K. Masuda | 2007 | 296,771 | 100,000 | 78,837 | 85,238 | 355,500 | 0 | 96,459 | 1,012,805 | ||||||||||||||||||||||||||||||||||||||
Senior Vice President and Treasurer | |||||||||||||||||||||||||||||||||||||||||||||||
Former NEO | |||||||||||||||||||||||||||||||||||||||||||||||
Robert Freed* | 2007 | 256,500 | 0 | 640,057 | 95,803 | 0 | 86,362 | 2,821,997 | 3,900,719 | ||||||||||||||||||||||||||||||||||||||
Senior Vice President, Investment Strategy | |||||||||||||||||||||||||||||||||||||||||||||||
(a) | Bonus: The amounts reported in this column reflect discretionary bonuses paid to Messrs. Mezger, Hollinger and Masuda. These are described under the heading “Annual Incentives and Discretionary Bonuses” on pages 29-30 above. | |
(b) | Stock Awards: The amounts reported in this column reflect the aggregate compensation expense we recognized in our 2007 fiscal year for shares of restricted stock and phantom shares granted to our NEOs, computed in accordance with SFAS 123(R) (disregarding estimates of forfeitures related to service-based vesting conditions). Information used in determining these amounts can be found in Note 15 of the Notes to |
35
41
the Consolidated Financial Statements contained in our Annual report onForm 10-K for the fiscal year ended November 30, 2007. The “Outstanding Equity Awards at Fiscal Year-End 2007” table on pages 39-40 below and its associated footnotes contain additional information about our NEOs’ respective equity award holdings. The amount reported in this column for Mr. Freed reflects the aggregate compensation costs we recognized for his equity awards through the date on which his employment with us ended. | ||
(c) | Option Awards: The amounts reported in this column reflect the aggregate compensation expense we recognized in our 2007 fiscal year for stock option and SAR awards granted to our NEOs, computed in accordance with SFAS 123(R) (disregarding estimates of forfeitures related to service-based vesting conditions). Information used in determining these amounts can be found in Note 15 of the Notes to the Consolidated Financial Statements contained in our Annual Report onForm 10-K for the fiscal year ended November 30, 2007. The “Outstanding Equity Awards at Fiscal Year-End 2007” table on pages 39-40 below and its associated footnotes contain additional information about our NEOs’ respective option award holdings. The amount reported in this column for Mr. Freed reflects the aggregate compensation costs we recognized for his option awards through the date on which his employment with us ended. | |
(d) | Non-Equity Incentive Plan Compensation: The amounts reported in this column reflect annual incentive compensation the respective NEOs earned based on achieving applicable 2007 fiscal year performance goals and payouts of UPP performance units corresponding to the2005-2007 performance period. Mr. Freed did not receive any non-equity incentive plan compensation due to the termination of his employment with us. | |
(e) | Change in Pension Value and Nonqualified Deferred Compensation Earnings: The amounts reported in this column reflect the change in present value during our 2007 fiscal year of accumulated benefits we provide under our Retirement Plan. Above-market or preferential earnings are not provided under our Deferred Compensation Plan. | |
(f) | All Other Compensation: The amounts reported in this column consist primarily of offsetting payments we made in 2007 to the NEOs and other employees who held stock options for which we increased the exercise price based on Internal Revenue Code Section 409A consequences resulting from the Review, as further discussed under the heading “Option Exercise Price Adjustment Payments” on page 38 below. For our NEOs, the aggregate offsetting payments were: Mr. Mezger $758,956, Mr. Cecere $85,921, Mr. Hollinger $87,393, Mr. Barnard $58,720, Mr. Masuda $65,583, and Mr. Freed $95,946. The remainder of the amounts reported in this column consist of the following items: |
• | Perquisites: Perquisites provided to the NEOs include automobile allowances, company-paid automobile fuel cards, and reimbursement of expenses for automobile insurance, annual financial planning and tax preparation services, and one-time estate planning services. These perquisites were discontinued, effective July 1, 2007. Included in the amounts reported for Mr. Mezger are $135,484 in legal expenses, which were incurred in negotiating his Employment Agreement, and $4,290 of incremental costs associated with personal use of an aircraft we owned in our 2007 fiscal year. We sold our aircraft in December 2007. | |
• | Matching 401(k) Savings Plan and Supplemental Deferred Compensation Plan Contributions: We provide a dollar-for-dollar match of Deferred Compensation Plan and 401(k) Savings Plan contributions of up to an aggregate amount of six percent of a participant’s base salary. The aggregate 2007 fiscal year matching contributions we made to each NEO were as follows: Mr. Mezger $57,125, Mr. Cecere $13,500, Mr. Hollinger $20,825, Mr. Barnard $17,350, Mr. Masuda $9,550, and Mr. Freed $9,320. | |
• | Premium Payments: We paid premiums on supplemental medical expense reimbursement plans and life insurance policies for the benefit of participating executives. These plans and policies are described under the heading “Benefits” on pages 32-33 above. The aggregate premiums we paid in our 2007 fiscal year for each NEO for these plans and policies were as follows: Mr. Mezger $9,043, Mr. Cecere $8,083, Mr. Hollinger $5,781, Mr. Barnard $8,552, Mr. Masuda $8,552, and Mr. Freed $4,934. | |
• | Post-Employment Incentive Compensation Payout: When his employment with us ended in July 2007, Mr. Freed became entitled to an aggregate payment of $2,702,484 representing incentive compensation he earned in prior fiscal years. To comply with Internal Revenue Code Section 409A, this payment was made on February 1, 2008. |
* | Mr. Freed’s employment with us ended on July 15, 2007. |
36
Estimated Possible Payouts Under | Estimated Future Payouts Under Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-Equity Incentive Plan Awards | Incentive Plan Awards(d) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
All Other | All Other | Grant | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock | Option | Date | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Awards: | Awards: | Exercise | Fair | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number | Number of | or Base | Value of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
of Shares | Securities | Price of | Stock and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
of Stock | Underlying | Option | Option | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Grant | Type of | Threshold | Target | Maximum | Threshold | Target | Maximum | or Units | Options | Awards | Awards | |||||||||||||||||||||||||||||||||||||||||||||||
Name | Date(a) | Award | ($) | ($) | ($) | (#) | (#) | (#) | (#) | (#) | ($/Sh) | ($)(e) | ||||||||||||||||||||||||||||||||||||||||||||||
Mr. Mezger | (b) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | Stock Options | 325,050 | $ | 36.19 | $ | 3,819,695 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | Stock Options | 325,050 | 36.19 | 4,000,044 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | Restricted Stock | 13,500 | 54,000 | 81,000 | 2,000,233 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | Phantom Shares | 55,264 | 2,000,004 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/4/07 | Stock Options | 137,500 | 28.10 | 1,177,210 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/4/07 | SARs | 412,500 | 3,355,028 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Cecere | (c) | $ | 1,800,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | SARs | 29,939 | 350,002 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | Phantom Shares | 15,751 | 570,029 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | Phantom Shares | 9,672 | 350,030 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Hollinger | (c) | 875,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | SARs | 25,662 | 300,002 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | Phantom Shares | 1,037 | 37,529 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | Phantom Shares | 8,290 | 300,015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/4/07 | SARs | 36,885 | 300,001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/4/07 | Phantom Shares | 10,677 | 300,024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Barnard | (c) | 1,250,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | SARs | 21,385 | 250,001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | Phantom Shares | 6,908 | 250,001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/4/07 | SARS | 36,885 | 300,001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/4/07 | Phantom Shares | 10,677 | 300,024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Masuda | (c) | 743,750 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | SARs | 17,108 | 200,001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | Phantom Shares | 5,527 | 200,022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/4/07 | SARS | 24,590 | 200,001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/4/07 | Phantom Shares | 7,118 | 200,016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Former NEO | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Freed | (c) | 2,280,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(a) | Grant Date: The grant date for each award is the date the Compensation Committee approved the award. The exercise price for each award is equal to the closing price of our common stock on the date of grant (if applicable to the award granted). Mr. Freed was not granted any plan-based awards in our 2007 fiscal year. | |
(b) | Mr. Mezger’s annual incentive for our 2007 fiscal year was based on a specified percentage of our pre-tax, pre-incentive profit, as discussed under the heading “Annual Incentives and Discretionary Bonuses” on pages 29-30 above. Therefore, this annual incentive at the time it was granted did not have an estimated possible threshold, target or maximum payout amount. We do not believe it is possible to provide a representative “target” amount for this annual incentive based on our 2006 fiscal year performance because Mr. Mezger served as our Executive Vice President and Chief Operating Officer for substantially all of that year and thus had different responsibilities and |
37
performance objectives. If his 2007 fiscal year annual incentive arrangement were applied to our 2006 fiscal year performance, however, the amount of the payout would have been $21,168,500. Because Mr. Mezger did not qualify for a payout under his 2007 fiscal year annual incentive, no payout amount is reported under the “Non-Equity Incentive Plan Compensation” column in the “Summary Compensation Table” on page 35 above. | ||
(c) | In setting annual incentive arrangements for Messrs. Cecere, Hollinger, Barnard and Masuda for our 2007 fiscal year, the Compensation Committee did not set any specific target payout amounts. Rather, it set only maximum payout amounts, as shown in the table above. These annual incentives are described under the heading “Annual Incentives and Discretionary Bonuses” on pages 29-30 above. The actual annual incentive payouts the Compensation Committee approved for these four NEOs were significantly lower, and were as follows: Mr. Cecere $400,000, Mr. Hollinger $450,000, Mr. Barnard $600,000, and Mr. Masuda $350,000. These payout amounts are reported under the “Non-Equity Incentive Plan Compensation” column in the “Summary Compensation Table” on page 35 above. The Compensation Committee also set an annual incentive for Mr. Freed for our 2007 fiscal year that was based on achieving specified performance goals relating to his roles as our Senior Vice President, Investment Strategy and as a regional manager for our Northern California operations. The Compensation Committee did not set a specific target payout for Mr. Freed’s annual incentive, only a maximum amount as shown in the table above. Since Mr. Freed’s employment with us ended during our 2007 fiscal year, he did not receive any payout under this annual incentive and no payout amount is reported under the “Non-Equity Incentive Plan Compensation” column in the “Summary Compensation Table.” | |
(d) | Estimated Future Payouts Under Equity Incentive Plan Awards: Mr. Mezger will vest in the specified threshold, target and maximum amounts relating to the restricted stock/performance shares granted to him on July 12, 2007 depending on our total stockholder return relative to our peer group, as further discussed under the heading “CEO Employment Agreement Grants” on page 31 above. The SARs and phantom shares reported in this column that were granted to the NEOs on July 12, 2007 and October 4, 2007 will vest in the specified target amounts if the Compensation Committee determines that the applicable performance vesting conditions are satisfied, as further discussed under the heading “Long-Term Incentives” onpages 30-32 above. | |
(e) | Grant Date Fair Value of Stock and Option Awards: The grant date fair value reported in this column for each award is computed in accordance with SFAS 123(R). |
38
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||
Options | Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||
Awards | Incentive | Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Plan | Incentive | ||||||||||||||||||||||||||||||||||||||||||||||||||
Incentive | Market | Awards: | Plan Awards: | |||||||||||||||||||||||||||||||||||||||||||||||||
Plan Awards: | Number | Value of | Number of | Market or | ||||||||||||||||||||||||||||||||||||||||||||||||
Number of | of Shares | Shares or | Unearned | Payout Value | ||||||||||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Securities | or Units | Units of | Shares, | of Unearned | ||||||||||||||||||||||||||||||||||||||||||||||
Securities | Securities | Underlying | of Stock | Stock | Units or | Shares, Units | ||||||||||||||||||||||||||||||||||||||||||||||
Underlying | Underlying | Unexercised | That | That | Other | or Other | ||||||||||||||||||||||||||||||||||||||||||||||
Unexercised | Unexercised | Unearned | Option | Have | Have | Rights That | Rights That | |||||||||||||||||||||||||||||||||||||||||||||
Options | Options | Options/ | Exercise | Option | Not | Not | Have Not | Have Not | ||||||||||||||||||||||||||||||||||||||||||||
Exercisable | Unexercisable | SARs | Price | Expiration | Vested | Vested | Vested | Vested | ||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | (#) | (#)(a) | (#)(b) | ($) | Date | (#) | ($)(c) | (#)(d) | ($)(e) | ||||||||||||||||||||||||||||||||||||||||||
Mr. Mezger | 10/30/01 | 431,122 | $ | 13.95 | 10/30/16 | |||||||||||||||||||||||||||||||||||||||||||||||
10/30/01 | 68,878 | 13.95 | 10/30/16 | |||||||||||||||||||||||||||||||||||||||||||||||||
2/13/02 | 102,090 | 20.07 | 2/13/17 | |||||||||||||||||||||||||||||||||||||||||||||||||
5/8/02 | 44,516 | 25.63 | 5/8/17 | |||||||||||||||||||||||||||||||||||||||||||||||||
10/7/02 | 400,000 | 21.51 | 10/7/17 | |||||||||||||||||||||||||||||||||||||||||||||||||
10/24/03 | 74,667 | 33.24 | (f) | 10/24/18 | ||||||||||||||||||||||||||||||||||||||||||||||||
10/24/03 | 149,333 | 34.05 | (f) | 10/24/18 | ||||||||||||||||||||||||||||||||||||||||||||||||
10/22/04 | 80,750 | 40.90 | 10/22/19 | |||||||||||||||||||||||||||||||||||||||||||||||||
10/22/04 | 119,250 | 40.90 | 10/22/19 | |||||||||||||||||||||||||||||||||||||||||||||||||
1/14/05 | 51,150 | $ | 1,068,524 | |||||||||||||||||||||||||||||||||||||||||||||||||
10/18/05 | 50,000 | 25,000 | 63.77 | 10/18/15 | ||||||||||||||||||||||||||||||||||||||||||||||||
10/21/05 | 25,000 | 522,250 | ||||||||||||||||||||||||||||||||||||||||||||||||||
1/13/06 | 80,343 | 1,678,365 | ||||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | 325,050 | 36.19 | 11/30/16 | (g) | ||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | 325,050 | 36.19 | 7/12/17 | |||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | 7/12/17 | 54,000 | $ | 1,128,060 | ||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | 55,264 | 1,154,465 | ||||||||||||||||||||||||||||||||||||||||||||||||||
10/4/07 | 137,500 | 28.10 | 10/4/17 | |||||||||||||||||||||||||||||||||||||||||||||||||
10/4/07 | 412,500 | 28.10 | 10/4/17 | |||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Cecere | 4/23/02 | 100,000 | $ | 25.17 | 4/23/17 | |||||||||||||||||||||||||||||||||||||||||||||||
10/7/02 | 80,000 | 21.51 | 10/7/17 | |||||||||||||||||||||||||||||||||||||||||||||||||
10/24/03 | 14,934 | 33.24 | (f) | 10/24/18 | ||||||||||||||||||||||||||||||||||||||||||||||||
10/24/03 | 29,866 | 34.05 | (f) | 10/24/18 | ||||||||||||||||||||||||||||||||||||||||||||||||
10/22/04 | 20,000 | 40.90 | 10/22/19 | |||||||||||||||||||||||||||||||||||||||||||||||||
1/14/05 | 2,924 | $ | 61,082 | |||||||||||||||||||||||||||||||||||||||||||||||||
10/18/05 | 4,000 | 2,000 | 63.77 | 10/18/15 | ||||||||||||||||||||||||||||||||||||||||||||||||
10/21/05 | 2,500 | 52,225 | ||||||||||||||||||||||||||||||||||||||||||||||||||
1/13/06 | 5,241 | 109,484 | ||||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | 29,939 | 36.19 | 7/12/17 | |||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | 9,672 | $ | 202,048 | |||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | 15,751 | 329,038 | ||||||||||||||||||||||||||||||||||||||||||||||||||
39
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||
Options | Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||
Awards | Incentive | Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Plan | Incentive | ||||||||||||||||||||||||||||||||||||||||||||||||||
Incentive | Market | Awards: | Plan Awards: | |||||||||||||||||||||||||||||||||||||||||||||||||
Plan Awards: | Number | Value of | Number of | Market or | ||||||||||||||||||||||||||||||||||||||||||||||||
Number of | of Shares | Shares or | Unearned | Payout Value | ||||||||||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Securities | or Units | Units of | Shares, | of Unearned | ||||||||||||||||||||||||||||||||||||||||||||||
Securities | Securities | Underlying | of Stock | Stock | Units or | Shares, Units | ||||||||||||||||||||||||||||||||||||||||||||||
Underlying | Underlying | Unexercised | That | That | Other | or Other | ||||||||||||||||||||||||||||||||||||||||||||||
Unexercised | Unexercised | Unearned | Option | Have | Have | Rights That | Rights That | |||||||||||||||||||||||||||||||||||||||||||||
Options | Options | Options/ | Exercise | Option | Not | Not | Have Not | Have Not | ||||||||||||||||||||||||||||||||||||||||||||
Exercisable | Unexercisable | SARs | Price | Expiration | Vested | Vested | Vested | Vested | ||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | (#) | (#)(a) | (#)(b) | ($) | Date | (#) | ($)(c) | (#)(d) | ($)(e) | ||||||||||||||||||||||||||||||||||||||||||
Mr. Hollinger | 7/1/02 | 58,058 | $ | 26.29 | 7/1/17 | |||||||||||||||||||||||||||||||||||||||||||||||
10/7/02 | 60,000 | 21.51 | 10/7/17 | |||||||||||||||||||||||||||||||||||||||||||||||||
10/24/03 | 9,334 | 33.24 | (f) | 10/24/18 | ||||||||||||||||||||||||||||||||||||||||||||||||
10/24/03 | 18,666 | 34.05 | (f) | 10/24/18 | ||||||||||||||||||||||||||||||||||||||||||||||||
10/22/04 | 24,000 | 40.90 | 10/22/19 | |||||||||||||||||||||||||||||||||||||||||||||||||
10/18/05 | 4,000 | 2,000 | 63.77 | 10/18/15 | ||||||||||||||||||||||||||||||||||||||||||||||||
10/21/05 | 2,500 | $ | 52,225 | |||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | 25,662 | 36.19 | 7/12/17 | |||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | 1,037 | 21,663 | ||||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | 8,290 | $ | 173,178 | |||||||||||||||||||||||||||||||||||||||||||||||||
10/4/07 | 36,885 | 28.10 | 10/4/17 | |||||||||||||||||||||||||||||||||||||||||||||||||
10/4/07 | 10,677 | 223,043 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Barnard | 3/1/04 | 30,000 | $ | 38.24 | 3/1/19 | |||||||||||||||||||||||||||||||||||||||||||||||
10/22/04 | 20,000 | 40.90 | 10/22/19 | |||||||||||||||||||||||||||||||||||||||||||||||||
10/18/05 | 2,667 | 1,333 | 63.77 | 10/18/15 | ||||||||||||||||||||||||||||||||||||||||||||||||
10/21/05 | 2,000 | $ | 41,780 | |||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | 21,385 | 36.19 | 7/12/17 | |||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | 6,908 | $ | 144,308 | |||||||||||||||||||||||||||||||||||||||||||||||||
10/4/07 | 36,885 | 28.10 | 10/4/17 | |||||||||||||||||||||||||||||||||||||||||||||||||
10/4/07 | 10,677 | 223,043 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Masuda | 9/2/03 | 10,000 | $ | 28.71 | 9/2/18 | |||||||||||||||||||||||||||||||||||||||||||||||
10/24/03 | 3,334 | 33.24 | (f) | 10/24/18 | ||||||||||||||||||||||||||||||||||||||||||||||||
10/24/03 | 6,666 | 34.05 | (f) | 10/24/19 | ||||||||||||||||||||||||||||||||||||||||||||||||
10/22/04 | 20,000 | 40.90 | 10/22/19 | |||||||||||||||||||||||||||||||||||||||||||||||||
10/18/05 | 3,334 | 1,666 | 63.77 | 10/18/15 | ||||||||||||||||||||||||||||||||||||||||||||||||
10/21/05 | 2,000 | $ | 41,780 | |||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | 17,108 | 36.19 | 7/12/17 | |||||||||||||||||||||||||||||||||||||||||||||||||
7/12/07 | 5,527 | $ | 115,459 | |||||||||||||||||||||||||||||||||||||||||||||||||
10/4/07 | 24,590 | 28.10 | 10/4/17 | |||||||||||||||||||||||||||||||||||||||||||||||||
10/4/07 | 7,118 | 148,695 | ||||||||||||||||||||||||||||||||||||||||||||||||||
(a) | Number of Securities Underlying Unexercised Options - Unexercisable: Stock option awards generally vest in equal installment amounts over a three-year period. | |
(b) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options/SARs: The items reported in this column consist of SARs that are subject to a performance-vesting condition, as discussed under the heading “Long-Term Incentives” on pages 30-32 above. |
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(c) | Market Value of Shares That Have Not Vested: The market value specified in this column is based on the closing price of our common stock on November 30, 2007, which was $20.89. | |
(d) | Equity Incentive Plan Awards: Number of Unearned Shares That Have Not Vested: The 54,000 shares of restricted stock granted to Mr. Mezger on July 12, 2007 are performance shares that vest as described under the heading “CEO Employment Agreement Grants” on page 31 above. The remaining rights reported in this column consist of phantom shares that are subject to a performance-vesting condition, as discussed under the heading “Long-Term Incentives” on pages 30-32 above. | |
(e) | Equity Incentive Plan Awards: Market Value of Unearned Shares That Have Not Vested: The market value specified in this column is based on the closing price of our common stock on November 30, 2007, which was $20.89. | |
(f) | As discussed under the heading “Option Exercise Price Adjustment Payments” on page 38 above, as a result of the Review, we adjusted the exercise price of certain stock options held by our employees. In order to comply with Internal Revenue Code Section 409A, the exercise price for a certain portion of the stock option grant made on October 24, 2003 was not adjusted. | |
(g) | The expiration date for these promotional stock options is set under Mr. Mezger’s Employment Agreement. These promotional stock options are further discussed under the heading “CEO Promotion Grant” on page 31 above. |
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Option Awards | Stock Awards | |||||||||||||||||||||
Number | Number | |||||||||||||||||||||
of Shares | Value | of Shares | Value | |||||||||||||||||||
Acquired | Realized | Acquired | Realized | |||||||||||||||||||
on Exercise | on Exercise | on Vesting | on Vesting | |||||||||||||||||||
Name | (#) | ($)(a) | (#)(b) | ($)(c) | ||||||||||||||||||
Mr. Mezger | 0 | $ | 0 | 67,958 | $ | 2,926,323 | ||||||||||||||||
Mr. Cecere | 0 | 0 | 10,000 | 448,140 | ||||||||||||||||||
Mr. Hollinger | 0 | 0 | 2,400 | 65,256 | ||||||||||||||||||
Mr. Barnard | 0 | 0 | 5,000 | 202,460 | ||||||||||||||||||
Mr. Masuda | 0 | 0 | 1,000 | 27,190 | ||||||||||||||||||
Former NEO | ||||||||||||||||||||||
Mr. Freed | 35,732 | 334,731 | 24,790 | 1,220,164 | ||||||||||||||||||
(a) | Value Realized on Exercise: The amount reported in this column for Mr. Freed reflects our payment to him for stock options he exercised and reflects the aggregate gross dollar value corresponding to those stock options (i.e., the difference between the market price of the underlying shares at exercise and the exercise price). | |
(b) | Number of Shares Acquired on Vesting: The amounts reported in this column for Messrs. Mezger and Cecere reflect the vesting of restricted stock awards on January 16, 2007 and October 23, 2007. The amounts reported in this column for Messrs. Hollinger and Masuda reflect the vesting of restricted stock awards on October 23, 2007. The amounts reported in this column for Mr. Barnard reflect the vesting of restricted stock awards on March 1, 2007 and October 23, 2007. The amount reported in this column for Mr. Freed reflects the vesting of a restricted stock award on January 16, 2007. In each case, the amount reported reflects the gross number of shares of our common stock that vested. However, each NEO returned shares to us to cover applicable tax withholding obligations, resulting in the NEO holding fewer shares of our common stock than reflected in the table. | |
(c) | Value Realized on Vesting: The amounts reported in this column reflect the gross dollar value realized upon the vesting of each applicable award (i.e., the number of shares times the closing price of our common stock on the vesting date). However, as noted in footnote (b) to this table, each NEO returned shares of our common stock to us to cover tax withholding obligations and, therefore, actually realized a lower total value than the amount reported in this column. |
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Number | Present | Payments | ||||||||||||||||||||
of Years | Value of | During | ||||||||||||||||||||
Credited | Accumulated | Last Fiscal | ||||||||||||||||||||
Plan | Service | Benefit | Year | |||||||||||||||||||
Name | Name | (#)(a) | ($)(b) | ($) | ||||||||||||||||||
Mr. Mezger | Retirement Plan | 14 | $ | 6,548,847 | $ | 0 | ||||||||||||||||
Mr. Cecere | Retirement Plan | 6 | 1,455,299 | 0 | ||||||||||||||||||
Mr. Hollinger | Retirement Plan | 20 | 1,400,596 | 0 | ||||||||||||||||||
Mr. Barnard | Retirement Plan | 13 | 1,343,291 | 0 | ||||||||||||||||||
Former NEO | ||||||||||||||||||||||
Mr. Freed | Retirement Plan | 13 | 1,455,299 | 0 | ||||||||||||||||||
(a) | Number of Years of Credited Service: These amounts are as of the valuation date. As discussed under the heading “Retirement Programs” on pages 33-34 above, full entitlement to the Retirement Plan benefit occurs upon the completion of five years of participation. As of November 30, 2007, all the participating NEOs had five years of participation, except for Mr. Barnard who had four years of participation. Mr. Masuda is not a participant in the plan. | |
(b) | Present Value of Accumulated Benefit: The amounts reported in this column represent the actuarial present value of the total retirement benefit that would be payable to each respective NEO under the Retirement Plan as of November 30, 2007. The following are the key actuarial assumptions and methodology used to calculate this present value: the base benefit for each participant is assumed to begin as of the earliest possible date for each participant (generally the later of age 55 or the 10th anniversary of the commencement of participation); the base benefit is adjusted by past and future cost of living adjustments of three percent in the plan year ending November 30, 2006, 3.3% in the plan year ending November 30, 2007, and then an assumed three percent each year thereafter, until the last year benefits are paid for each participant; and the discount rate is six percent. |
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Executive | Registrant | Aggregate | Aggregate | ||||||||||||||||||||||||
Contributions | Contributions | Earnings | Aggregate | Balance | |||||||||||||||||||||||
in Last | in Last | in Last | Withdrawals/ | at Last | |||||||||||||||||||||||
Fiscal Year | Fiscal Year | Fiscal Year | Distributions | Fiscal Year | |||||||||||||||||||||||
Name | ($)(a) | ($)(b) | ($)(c) | ($)(d) | ($)(e) | ||||||||||||||||||||||
Mr. Mezger | $ | 57,125 | $ | 43,625 | $ | 7,978 | $ | 22,678 | $ | 297,002 | |||||||||||||||||
Mr. Hollinger | 297,208 | 11,200 | 119,522 | 0 | 1,715,258 | ||||||||||||||||||||||
Mr. Barnard | 117,350 | 10,825 | 36,407 | 0 | 391,468 | ||||||||||||||||||||||
Former NEO | |||||||||||||||||||||||||||
Mr. Freed | 0 | 0 | 55,440 | 1,045,450 | 525,083 | ||||||||||||||||||||||
(a) | Executive Contributions in Last Fiscal Year: The amounts reported in this column reflect compensation the respective NEOs earned in our 2007 fiscal year that they have voluntarily deferred. These amounts are included in the “Salary,” “Bonus” or “Non-Equity Incentive Plan Compensation” columns to the “Summary Compensation Table” on page 35 above. Messrs. Cecere and Masuda have not made any deferrals. | |
(b) | Registrant Contributions in Last Fiscal Year: The amounts reported in this column reflect the matching contributions we made to the respective NEOs’ individual voluntary contributions to our Deferred Compensation Plan. These amounts are included in the “Summary Compensation Table.” | |
(c) | Aggregate Earnings in Last Fiscal Year: The amounts reported in this column do not include any above-market or preferential earnings. Accordingly, these amounts are not reported in the “Summary Compensation Table.” | |
(d) | Aggregate Withdrawals/Distributions: Mr. Mezger’s distribution was a short term payout at his election. The amount reported for Mr. Freed represents a distribution, for his account prior to December 31, 2004, taken in connection with the termination of his employment with us in July 2007. | |
(e) | Aggregate Balance at Last Fiscal Year End: The amounts reported in this column reflect compensation the NEOs earned in our 2007 fiscal year or in prior years, but which they voluntarily elected to defer receipt. |
• | a lump sum cash payment equal to two times his annual salary plus average annual bonus for the prior three years, with the total payment capped at $6 million; | |
• | a pro-rated bonus earned, if any, for the year in which Mr. Mezger’s employment terminates; | |
• | health coverage that we pay for two years; | |
• | with respect to equity compensation granted to him on or after February 28, 2007, (a) two years of additional service credited to compute equity vesting plus full vesting for any equity issued to him in lieu of cash |
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bonuses, and (b) 36 months to exercise any outstanding equity granted to him on or after February 28, 2007 (subject to the original term duration of each equity grant); |
• | performance shares (other than the performance share grant made in 2007) paid as if the performance period closed on the termination date if the performance period would otherwise close in the next 24 months; and | |
• | payment of his performance share grant made in 2007. |
• | full vesting of unvested equity granted to him on or after February 28, 2007, with earlier equity awards governed by their respective terms and conditions; | |
• | performance shares paid as earned with the applicable performance period closing as of the date of the Change in Control; | |
• | full vesting and lump sum cash payment of deferred compensation, retirement or other employee benefits; | |
• | if his employment is involuntarily terminated in connection with a Change in Control (generally, during the period starting three months before and ending twelve months after a Change in Control), payment of the same severance as provided above, except the applicable multiple is three times his annual salary and average bonus rather than two times and the total payment is capped at $12 million. Mr. Mezger’s termination of employment for any reason during the thirteen month period following a Change in Control will be treated as an involuntary termination; and | |
• | additionalgross-up payment to compensate for any excise taxes under Internal Revenue Code Section 280G (“Section 280G”). |
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• | a severance benefit equal to two times the sum of the participant’s average base salary and average actual annual cash bonus for the three fiscal years prior to the year in which the change in control occurs; | |
• | accelerated vesting of any options and the lapse of any restricted period with respect to any restricted stock or other equity awards awarded to the participant; | |
• | full vesting in any benefits under our Death Benefit Only Plan (which is described on the next page) if the participant also participates in that plan; and | |
• | an additionalgross-up payment to compensate for any Section 280G excise taxes imposed on payments under the CIC Plan or on payments under any other plan. |
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Executive | Involuntary | Change in | |||||||||||||||||||||||||||||||||||
Payments and | Termination | Control With | |||||||||||||||||||||||||||||||||||
Benefits upon | Without Cause/ | Change in | Termination | ||||||||||||||||||||||||||||||||||
Termination | Involuntary | Termination | Control | for Good | |||||||||||||||||||||||||||||||||
or Change | Voluntary | Termination | for Good | Without | Reason or | ||||||||||||||||||||||||||||||||
in Control | Termination | for Cause | Reason | Termination | Without Cause | Death | Disability | ||||||||||||||||||||||||||||||
Compensation | |||||||||||||||||||||||||||||||||||||
Severance | $ | 0 | $ | 0 | $ | 6,000,000 | (a) | $ | 0 | $ | 12,000,000 | (b) | $ | 0 | $ | 0 | |||||||||||||||||||||
Long-term Incentives | |||||||||||||||||||||||||||||||||||||
Cash LTI Awards (c) | |||||||||||||||||||||||||||||||||||||
- UPP - 10 | 97,500 | 97,500 | 97,500 | 750,000 | 750,000 | 750,000 | 750,000 | ||||||||||||||||||||||||||||||
- UPP - 11 | 0 | 0 | 0 | 1,000,000 | 1,000,000 | 666,667 | 666,667 | ||||||||||||||||||||||||||||||
Acceleration of Unvested Equity (d) | |||||||||||||||||||||||||||||||||||||
- Restricted Stock | 0 | 0 | 0 | 3,269,139 | 3,269,139 | 0 | 0 | ||||||||||||||||||||||||||||||
- Performance Shares | 0 | 0 | 1,552,168 | (e) | 1,552,168 | (e) | 1,552,168 | (e) | 0 | 0 | |||||||||||||||||||||||||||
- Phantom Shares | 0 | 0 | 1,182,097 | 1,182,097 | 1,182,097 | 0 | 0 | ||||||||||||||||||||||||||||||
Vested Equity (d) | |||||||||||||||||||||||||||||||||||||
- Stock Options | 3,553,714 | 3,553,714 | 3,553,714 | 3,553,714 | 3,553,714 | 3,553,714 | 3,553,714 | ||||||||||||||||||||||||||||||
Benefits & Perquisites | |||||||||||||||||||||||||||||||||||||
Retirement Plan | 6,548,847 | (f) | 6,548,847 | (f) | 6,548,847 | (f) | 7,535,751 | (g) | 7,535,751 | (g) | 6,548,847 | (f) | 6,548,847 | (f) | |||||||||||||||||||||||
Vested Deferred Compensation | 297,002 | (h) | 297,002 | (h) | 297,002 | (h) | 0 | 297,002 | (h) | 297,002 | (h) | 297,002 | (h) | ||||||||||||||||||||||||
Death Benefit Only Plan | 0 | 0 | 0 | 903,305 | (i) | 903,305 | (i) | 1,724,404 | (j) | 0 | |||||||||||||||||||||||||||
Term Life Insurance | 0 | 0 | 0 | 0 | 0 | 400,000 | 0 | ||||||||||||||||||||||||||||||
�� | |||||||||||||||||||||||||||||||||||||
Outplacement | 0 | 0 | 20,000 | (k) | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||
Health Benefits | 0 | 0 | 50,869 | (l) | 0 | 50,869 | (l) | 0 | 0 | ||||||||||||||||||||||||||||
Credited Vacation Benefits (m) | 76,923 | 76,923 | 76,923 | 0 | 76,923 | 76,923 | 76,923 | ||||||||||||||||||||||||||||||
Total | $ | 10,573,986 | $ | 10,573,986 | $ | 19,379,120 | $ | 19,746,174 | $ | 32,170,968 | $ | 14,017,557 | $ | 11,893,153 | |||||||||||||||||||||||
Long-Term Compensation | |||||||||||||||||||||||||||||||||
Awards Payouts | |||||||||||||||||||||||||||||||||
Annual Compensation | |||||||||||||||||||||||||||||||||
Securities | |||||||||||||||||||||||||||||||||
Other Annual | Restricted | Underlying | LTIP | All Other | |||||||||||||||||||||||||||||
Fiscal | Bonus | Compensation | Stock | Options/ | Payouts | Compensation | |||||||||||||||||||||||||||
Name and Position | Year | Salary($) | ($)(a) | ($)(b) | Awards($)(a) | SARs(#) | ($)(c) | ($)(d) | |||||||||||||||||||||||||
Jeffrey T. Mezger | |||||||||||||||||||||||||||||||||
President and Chief | 2006 | $ | 568,750 | $ | 2,500,000 | $ | 80,357 | $ | 2,000,000 | – | $ | 746,250 | $ | 15,700 | |||||||||||||||||||
Executive Officer | 2005 | 498,333 | 2,500,000 | – | 7,212,531 | 75,000 | 2,519,442 | 29,900 | |||||||||||||||||||||||||
2004 | 478,333 | 2,000,000 | – | 3,524,962 | 200,000 | 2,761,071 | 28,800 | ||||||||||||||||||||||||||
Robert Freed | |||||||||||||||||||||||||||||||||
Senior Vice President, | 2006 | 389,167 | 2,000,000 | 50,716 | 1,233,359 | – | 375,000 | 10,850 | |||||||||||||||||||||||||
Investment Strategy | 2005 | 266,667 | 1,250,000 | – | 1,772,264 | 8,000 | 1,007,808 | 16,175 | |||||||||||||||||||||||||
2004 | 229,167 | 1,250,000 | – | 1,107,985 | 25,000 | 1,380,426 | 13,800 | ||||||||||||||||||||||||||
Domenico Cecere | |||||||||||||||||||||||||||||||||
Executive Vice | 2006 | 548,333 | 750,000 | – | 570,000 | – | 525,000 | 13,200 | |||||||||||||||||||||||||
President and Chief | 2005 | 529,167 | 750,000 | – | 576,731 | 6,000 | 1,763,585 | 12,600 | |||||||||||||||||||||||||
Financial Officer | 2004 | 518,333 | 750,000 | – | 236,500 | 20,000 | 1,932,728 | 11,700 | |||||||||||||||||||||||||
William R. Hollinger | |||||||||||||||||||||||||||||||||
Senior Vice President | 2006 | 312,633 | 750,000 | – | 37,500 | – | 375,000 | 18,571 | |||||||||||||||||||||||||
and Chief Accounting | 2005 | 285,683 | 716,500 | – | 160,700 | 6,000 | 1,007,808 | 16,844 | |||||||||||||||||||||||||
Officer | 2004 | 274,717 | 750,000 | – | 91,800 | 24,000 | 1,104,494 | 16,536 | |||||||||||||||||||||||||
Kelly Masuda | |||||||||||||||||||||||||||||||||
Senior Vice President | 2006 | 287,604 | 625,000 | – | – | – | 37,500 | 9,384 | |||||||||||||||||||||||||
and Treasurer | 2005 | 273,646 | 412,500 | – | 128,560 | 5,000 | – | 688 | |||||||||||||||||||||||||
2004 | 258,021 | 258,750 | – | 38,250 | 20,000 | – | 8,409 | ||||||||||||||||||||||||||
Bruce Karatz | |||||||||||||||||||||||||||||||||
Former Chairman | 2006 | 1,185,417 | – | 629,089 | – | – | – | 103,975 | |||||||||||||||||||||||||
and Chief | 2005 | 1,091,667 | 5,000,000 | 296,077 | 27,913,496 | 250,000 | 3,527,250 | 102,401 | |||||||||||||||||||||||||
Executive Officer | 2004 | 1,000,000 | 5,000,000 | 165,263 | 14,045,340 | 560,000 | 3,865,455 | 101,528 | |||||||||||||||||||||||||
(a) |
46
(b) | ||
(c) | ||
(d) | ||
(e) | Assumes payout of 133.60% of target award plus reinvested dividends in accordance with the |
48
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(f) | Reflects present values of accrued benefit as of November 30, 2007 using an annual discount rate of six percent (consistent with Statement of Financial Accounting Standards No. 87,Employers’ Accounting for Pensions(“SFAS 87”) valuations). Benefits are assumed to commence at earliest benefit commencement date. | |
(g) | Assumes lump sum payout of accrued benefit on a change in control using a 4.89% Applicable Federal Rate (“AFR”) discount rate as provided in the plan. | |
(h) | Deferred compensation balances include deferrals and earnings of Mr. Mezger’s base salary in the amount of $141,774. | |
(i) | Values are estimated based on cash surrender values of life insurance policies as of January 28, 2008 of $429,845 plus expected payments to fund policies to maturity of $77,406 and income taxgross-ups of $396,054. | |
(j) | Mr. Mezger’s beneficiaries would be entitled to receive an estimated death benefit of $1,724,404 ($1,000,000 plus$724,404 gross-up for income taxes) upon his death. The present value of the benefit as of November 30, 2007 is estimated as $444,156 using a six percent discount factor and the Group Annuity Mortality (“GAM”) 83 (male) tables for life expectancy (consistent with rates and mortality tables used for Statement of Financial Accounting Standards No. 106,Employers’ Accounting for Postretirement Benefits Other Than Pensions (“SFAS 106”) valuations). |
(k) | This benefit is not available if Mr. Mezger terminates his employment with us for good reason. |
(l) | Assumes payment by us of 24 months of medical, dental and vision benefits using current COBRA rates of $2,120 per month. | |
(m) | Assumes payout of 160 hours of vacation benefits. This benefit is described under the heading “Benefits” on pages 32-33 above. |
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Number of Unexercised | Value of Unexercised | |||||||||||||||||||||||
Options Held at Fiscal | In-the-Money Options at | |||||||||||||||||||||||
Shares | Year End(#) | Fiscal Year End($)(a) | ||||||||||||||||||||||
Acquired on | Value | |||||||||||||||||||||||
Name | Exercise(#) | Realized($)(a) | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
Jeffrey T. Mezger | – | $ | – | 1,428,940 | 116,666 | $ | 41,255,895 | $ | 895,991 | |||||||||||||||
Robert Freed | – | – | 55,066 | 13,666 | 1,039,756 | 111,996 | ||||||||||||||||||
Domenico Cecere | – | – | 240,134 | 10,666 | 6,072,893 | 89,591 | ||||||||||||||||||
William R. Hollinger | – | – | 164,058 | 12,000 | 4,017,253 | 107,520 | ||||||||||||||||||
Kelly Masuda | – | – | 35,001 | 9,999 | 593,609 | 89,591 | ||||||||||||||||||
Bruce Karatz(b) | – | – | 2,658,120 | 353,332 | 73,174,491 | 2,508,791 | ||||||||||||||||||
Executive | Involuntary | Change in | |||||||||||||||||||||||||||||||||||
Payments and | Termination | Control With | |||||||||||||||||||||||||||||||||||
Benefits upon | Without Cause/ | Change in | Termination | ||||||||||||||||||||||||||||||||||
Termination | Involuntary | Termination | Control | for Good | |||||||||||||||||||||||||||||||||
or Change | Voluntary | Termination | for Good | Without | Reason or | ||||||||||||||||||||||||||||||||
in Control | Termination | for Cause | Reason | Termination | Without Cause | Death | Disability | ||||||||||||||||||||||||||||||
Compensation | |||||||||||||||||||||||||||||||||||||
Severance | $ | 0 | $ | 0 | $ | 3,464,000 | (a) | $ | 0 | $ | 3,327,889 | (b) | $ | 0 | $ | 0 | |||||||||||||||||||||
Long-term Incentives | |||||||||||||||||||||||||||||||||||||
Cash LTI Awards (c) | |||||||||||||||||||||||||||||||||||||
- UPP - 10 | 38,500 | 38,500 | 38,500 | 350,000 | 350,000 | 350,000 | 350,000 | ||||||||||||||||||||||||||||||
- UPP - 11 | 0 | 0 | 0 | 300,000 | 300,000 | 200,000 | 200,000 | ||||||||||||||||||||||||||||||
Acceleration of Unvested Equity (d) | |||||||||||||||||||||||||||||||||||||
- Restricted Stock | 0 | 0 | 0 | 222,792 | 222,792 | 0 | 0 | ||||||||||||||||||||||||||||||
- Phantom Shares | 0 | 0 | 0 | 543,798 | 543,798 | 0 | 0 | ||||||||||||||||||||||||||||||
Benefits & Perquisites | |||||||||||||||||||||||||||||||||||||
Retirement Plan | 1,455,299 | (e) | 1,455,299 | (e) | 1,455,299 | (e) | 1,674,611 | (f) | 1,674,611 | (f) | 1,455,299 | (e) | 1,455,299 | (e) | |||||||||||||||||||||||
Death Benefit Only Plan | 0 | 0 | 0 | 1,303,002 | (g) | 1,303,002 | (g) | 1,724,404 | (h) | 0 | |||||||||||||||||||||||||||
Outplacement | 0 | 0 | 20,000 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Health Benefits | 0 | 0 | 37,536 | (i) | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||
Credited Vacation Benefits (j) | 46,154 | 46,154 | 46,154 | 0 | 46,154 | 46,154 | 46,154 | ||||||||||||||||||||||||||||||
Total | $ | 1,539,953 | $ | 1,539,953 | $ | 5,061,489 | $ | 4,394,203 | $ | 7,768,246 | $ | 3,775,857 | $ | 2,051,453 | |||||||||||||||||||||||
(a) | ||
(b) | ||
(c) | Assumes awards paid at target performance levels for a change in control. For death and | |
(d) | Equity awards valued using closing price of $20.89 as of November 30, 2007. Phantom share values include accrued dividends on awards. | |
(e) | Reflects present values of accrued benefit as of November 30, 2007 using an annual discount rate of six percent (consistent with SFAS 87 valuations). Benefits are assumed to commence at earliest benefit commencement date. | |
(f) | Assumes lump sum payout of accrued benefit paid upon a change in control using a 4.89% AFR discount rate as provided in the | |
(g) | Values are estimated based on cash surrender values of life insurance policies as of January 28, 2008 of $498,169 plus expected payments to fund policies to maturity of $233,532 and income taxgross-ups of $571,301. | |
(h) | Mr. | |
(i) | Assumes monthly contributions by us for medical, dental and vision benefits in the | |
(j) | Assumes payout of |
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Estimated Future Payout | ||||||||||||||||||||
in Shares of Common Stock | ||||||||||||||||||||
Number of | ||||||||||||||||||||
Performance | Performance | Threshold | Target | Maximum | ||||||||||||||||
Name | Units(#)(a) | Period | ($)(b) | ($) | ($) | |||||||||||||||
Jeffrey T. Mezger | 1,000 | 12/1/05 – 11/30/08 | $ | 500,000 | $ | 1,000,000 | $ | 2,000,000 | ||||||||||||
Robert Freed | 325 | 12/1/05 – 11/30/08 | 162,500 | 325,000 | 650,000 | |||||||||||||||
Domenico Cecere | 300 | 12/1/05 – 11/30/08 | 150,000 | 300,000 | 600,000 | |||||||||||||||
William R. Hollinger | 300 | 12/1/05 – 11/30/08 | 150,000 | 300,000 | 600,000 | |||||||||||||||
Kelly Masuda | 100 | 12/1/05 – 11/30/08 | 50,000 | 100,000 | 200,000 | |||||||||||||||
Involuntary | Change in | ||||||||||||||||||||||||||||||||||||
Executive Payments | Termination | Control With | |||||||||||||||||||||||||||||||||||
and Benefits | Without Cause/ | Change in | Termination | ||||||||||||||||||||||||||||||||||
upon Termination | Involuntary | Termination | Control | for Good | |||||||||||||||||||||||||||||||||
or Change | Voluntary | Termination | for Good | Without | Reason or | ||||||||||||||||||||||||||||||||
in Control | Termination | for Cause | Reason | Termination | Without Cause | Death | Disability | ||||||||||||||||||||||||||||||
Compensation | |||||||||||||||||||||||||||||||||||||
Severance | $ | 0 | $ | 0 | $ | 2,202,667 | (a) | $ | 0 | $ | 2,084,689 | (b) | $ | 0 | $ | 0 | |||||||||||||||||||||
Long-term Incentives | |||||||||||||||||||||||||||||||||||||
Cash LTI Awards (c) | |||||||||||||||||||||||||||||||||||||
- UPP - 10 | 33,000 | 33,000 | 33,000 | 300,000 | 300,000 | 300,000 | 300,000 | ||||||||||||||||||||||||||||||
- UPP - 11 | 0 | 0 | 0 | 300,000 | 300,000 | 200,000 | 200,000 | ||||||||||||||||||||||||||||||
Acceleration of Unvested Equity (d) | |||||||||||||||||||||||||||||||||||||
- Restricted Stock | 0 | 0 | 0 | 52,225 | 52,225 | 0 | 0 | ||||||||||||||||||||||||||||||
- Phantom Shares | 0 | 0 | 0 | 425,216 | 425,216 | 0 | 0 | ||||||||||||||||||||||||||||||
Benefits & Perquisites | |||||||||||||||||||||||||||||||||||||
Retirement Plan | 1,400,596 | (e) | 1,400,596 | (e) | 1,400,596 | (e) | 1,622,859 | (f) | 1,622,859 | (f) | 1,400,596 | (e) | 1,400,596 | (e) | |||||||||||||||||||||||
Vested Deferred Compensation | 1,715,258 | (g) | 1,715,258 | (g) | 1,715,258 | (g) | 0 | 1,715,258 | (g) | 1,715,258 | (g) | 1,715,258 | (g) | ||||||||||||||||||||||||
Death Benefit Only Plan | 0 | 0 | 0 | 822,829 | (h) | 822,829 | (h) | 1,724,404 | (i) | 0 | |||||||||||||||||||||||||||
Outplacement | 0 | 0 | 20,000 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Health Benefits | 0 | 0 | 22,056 | (j) | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||
Total | $ | 3,148,854 | $ | 3,148,854 | $ | 5,393,577 | $ | 3,523,129 | $ | 7,323,076 | $ | 5,340,258 | $ | 3,615,854 | |||||||||||||||||||||||
(a) | ||
(b) | ||
(c) | Assumes awards paid at target performance levels for a change in control. For death and disability, amounts reflect a pro-rated target payment based on the number of months the award | |
(d) | Equity awards valued using closing price of $20.89 as of November 30, 2007. Phantom share values include accrued dividends on awards. | |
(e) | Reflects present values of accrued benefit as of November 30, 2007 using an annual discount rate of six percent (consistent with SFAS 87 valuations). Benefits are assumed to commence at earliest benefit commencement date. | |
(f) | Assumes lump sum payout of accrued benefit paid upon a change in control using a 4.89% AFR discount rate as provided in the plan. | |
(g) | Deferred compensation balances include deferrals and earnings of Mr. Hollinger’s base salary and bonus in the amount of $1,413,221. | |
(h) | Values are estimated based on cash surrender values of life insurance policies as of January 28, 2008 of $404,479 plus expected payments to fund policies to maturity of $57,580 and income taxgross-ups of $360,770. | |
(i) | Mr. Hollinger’s designated beneficiaries would be | |
(j) | Assumes monthly contributions by us for medical, dental and vision benefits in the |
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Number of Common | ||||||||||||
Number of | Shares Remaining | |||||||||||
Common Shares | Available for Future | |||||||||||
to be Issued | Issuance Under Equity | |||||||||||
Upon Exercise of | Weighted-average | Compensation Plans | ||||||||||
Outstanding | Exercise Price of | (excluding common | ||||||||||
Options, Warrants | Outstanding Options, | shares reflected in | ||||||||||
and Rights | Warrants and Rights | column (a)) | ||||||||||
(a) | (b) | (c) | ||||||||||
Equity compensation plans approved by stockholders | 7,982,877 | $ | 28.45 | 3,906,459 | ||||||||
Equity compensation plans not approved by stockholders(1) | 371,399 | 34.23 | 566,061 | |||||||||
Total | 8,354,276 | $ | 28.71 | 4,472,520 | ||||||||
Executive | Involuntary | Change in | |||||||||||||||||||||||||||||||||||
Payments and | Termination | Control With | |||||||||||||||||||||||||||||||||||
Benefits upon | Without Cause/ | Termination | |||||||||||||||||||||||||||||||||||
Termination | Involuntary | Termination | Change in | for Good | |||||||||||||||||||||||||||||||||
or Change | Voluntary | Termination | for Good | Control Without | Reason or | ||||||||||||||||||||||||||||||||
in Control | Termination | for Cause | Reason | Termination | Without Cause | Death | Disability | ||||||||||||||||||||||||||||||
Compensation | |||||||||||||||||||||||||||||||||||||
Severance | $ | 0 | $ | 0 | $ | 870,000 | (a) | $ | 0 | $ | 2,750,022 | (b) | $ | 0 | $ | 0 | |||||||||||||||||||||
Long-term Incentives | |||||||||||||||||||||||||||||||||||||
Cash LTI Awards (c) | |||||||||||||||||||||||||||||||||||||
- UPP - 10 | 0 | 0 | 0 | 300,000 | 300,000 | 300,000 | 300,000 | ||||||||||||||||||||||||||||||
- UPP - 11 | 0 | 0 | 0 | 325,000 | 325,000 | 216,667 | 216,667 | ||||||||||||||||||||||||||||||
Acceleration of Unvested Equity (d) | |||||||||||||||||||||||||||||||||||||
- Restricted Stock | 0 | 0 | 0 | 41,780 | 41,780 | 0 | 0 | ||||||||||||||||||||||||||||||
- Phantom Shares | 0 | 0 | 0 | 373,474 | 373,474 | 0 | 0 | ||||||||||||||||||||||||||||||
Benefits & Perquisites | |||||||||||||||||||||||||||||||||||||
Retirement Plan | 0 | 0 | 0 | 1,343,291 | (e) | 1,343,291 | (e) | 0 | 0 | ||||||||||||||||||||||||||||
Vested Deferred Compensation | 391,468 | (f) | 391,468 | (f) | 391,468 | (f) | 0 | 391,468 | (f) | 391,468 | (f) | 391,468 | (f) | ||||||||||||||||||||||||
Term Life Insurance | 0 | 0 | 0 | 0 | 0 | 750,000 | 0 | ||||||||||||||||||||||||||||||
Outplacement | 0 | 0 | 20,000 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Health Benefits | 0 | 0 | 16,704 | (g) | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||
280G TaxGross-up | N/A | N/A | N/A | 0 | 1,404,543 | (h) | N/A | N/A | |||||||||||||||||||||||||||||
Total | $ | 391,468 | $ | 391,468 | $ | 1,298,172 | $ | 2,383,545 | $ | 6,929,578 | $ | 1,658,135 | $ | 908,135 | |||||||||||||||||||||||
(b) | Severance based on | |
(c) | Assumes awards paid at target performance levels for a change in control. For death and disability, amounts reflect a pro-rated target payment based on the number of months the award is outstanding. | |
(d) | Equity awards valued using closing price of $20.89 as of November 30, 2007. Phantom share values include accrued dividends on awards. | |
(e) | Reflects present values of accrued benefit as of November 30, 2007 using an annual discount rate of six percent (consistent with SFAS 87 valuations). Benefits are assumed to commence at earliest benefit commencement date. Mr. Barnard has not elected a lump sum payout upon the a change in control. | |
(f) | Deferred compensation balances include deferrals and earnings of Mr. Barnard’s base salary and bonus in the amount of $376,004. | |
(g) | Assumes monthly contributions by us for medical, dental and vision benefits in the amount of $1,392 per month for twelve months. | |
(h) | Under the CIC Plan, if payments are subject to excise taxes under IRC Section 4999, we will pay Mr. Barnard an additional“gross-up” amount so that his after-tax benefits are the same as though no excise tax had been applied. The following major assumptions were used: (a) stock options assumed cashed out based upon assumed value of $20.89 less option exercise price, and other equity awards were valued assuming a fair market value of $20.89; and (b) payments for accelerated vesting of time based equity and Retirement Plan payouts valued using Treas. Reg.Section 1.280G-1 Q&A 24(c). |
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Executive | Involuntary | Change in | |||||||||||||||||||||||||||||||||||
Payments and | Termination | Control With | |||||||||||||||||||||||||||||||||||
Benefits upon | Without Cause/ | Change in | Termination | ||||||||||||||||||||||||||||||||||
Termination | Involuntary | Termination | Control | for Good | |||||||||||||||||||||||||||||||||
or Change | Voluntary | Termination | for Good | Without | Reason or | ||||||||||||||||||||||||||||||||
in Control | Termination | for Cause | Reason | Termination | Without Cause | Death | Disability | ||||||||||||||||||||||||||||||
Compensation | |||||||||||||||||||||||||||||||||||||
Severance | $ | 0 | $ | 0 | $ | 729,583 | (a) | $ | 0 | $ | 705,174 | (b) | $ | 0 | $ | 0 | |||||||||||||||||||||
Long-term Incentives | |||||||||||||||||||||||||||||||||||||
Cash LTI Awards (c) | |||||||||||||||||||||||||||||||||||||
- UPP - 10 | 5,500 | 5,500 | 5,500 | 50,000 | 50,000 | 50,000 | 50,000 | ||||||||||||||||||||||||||||||
- UPP - 11 | 0 | 0 | 0 | 100,000 | 100,000 | 66,667 | 66,667 | ||||||||||||||||||||||||||||||
Acceleration of Unvested Equity (d) | |||||||||||||||||||||||||||||||||||||
- Restricted Stock | 0 | 0 | 0 | 41,780 | 41,780 | 0 | 0 | ||||||||||||||||||||||||||||||
- Phantom Shares | 0 | 0 | 0 | 268,697 | 268,697 | 0 | 0 | ||||||||||||||||||||||||||||||
Benefits & Perquisites | |||||||||||||||||||||||||||||||||||||
Term Life Insurance | 0 | 0 | 0 | 0 | 0 | 750,000 | 0 | ||||||||||||||||||||||||||||||
Outplacement | 0 | 0 | 20,000 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Health Benefits | 0 | 0 | 18,000 | (e) | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||
Total | $ | 5,500 | $ | 5,500 | $ | 773,083 | $ | 460,477 | $ | 1,165,651 | $ | 866,667 | $ | 116,667 | |||||||||||||||||||||||
(a) | Severance based on a multiple of one times current annual base salary plus average bonus paid (including bonuses paid in equity) for fiscal years ending November 30, 2006, November 30, 2005 and November 30, 2004, as provided by the Executive Severance Plan. | |
(b) | Severance based on a multiple of one times average annual base salary plus average bonus paid (including bonuses paid in equity) for fiscal years ending November 30, 2006, November 30, 2005 and November 30, 2004, as provided by the CIC Plan. | |
(c) | Assumes awards paid at target performance levels for a change in control. For death and disability, amounts reflect a pro-rated target payment based on the number of months the award is outstanding. | |
(d) | Equity awards valued using closing price of $20.89 as of November 30, 2007. Phantom share values include accrued dividends on awards. | |
(e) | Assumes monthly contributions by us for medical, dental and vision benefits in the amount of $1,500 per month for twelve months. |
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Fiscal Year Ended | |||||||||
(in thousands) | |||||||||
2006 | 2005 | ||||||||
Audit Fees | $1,523 | $1,644 | |||||||
Audit-related Fees | 674 | 34 | |||||||
Tax Fees | 50 | 43 | |||||||
All Other Fees | – | – | |||||||
Total Fees | $ | 2,247 | $ | 1,721 | |||||
Fiscal Year Ended | ||||||||||||
(in thousands) | ||||||||||||
2007 | 2006 | |||||||||||
Audit Fees | $ | 1,317 | $ | 1,523 | ||||||||
Audit-Related Fees | 31 | 674 | ||||||||||
Tax Fees | 25 | 50 | ||||||||||
All Other Fees | 0 | 0 | ||||||||||
Total Fees | $ | 1,373 | $ | 2,247 | ||||||||
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• | the Nominating/Governance Committee will approve or ratify a Covered Transaction if, based on a review of all material facts of the transaction and feasible alternatives, the Nominating/Governance Committee deems the transaction to be in our and our stockholders’ best interests. | |
• | no director who has a direct or indirect material interest in a Covered Transaction will be included in any consideration of, or in any approval or ratification of, the transaction, provided that each such director will supply to the Nominating/Governance Committee or to the Board, as appropriate, all material information about the transaction. | |
• | the Nominating/Governance Committee will consider Covered Transactions for approval or ratification at each regularly scheduled Nominating/Governance Committee meeting, or as circumstances otherwise require, and will annually review any ongoing Covered Transaction approved or ratified hereunder to assess if the transaction remains appropriate under the terms hereof. The Nominating/Governance Committee may establish guidelines for our management to follow with respect to any ongoing Covered Transactions. | |
• | the Nominating/Governance Committee will oversee, as appropriate, our disclosure of Covered Transactions as required by federal securities laws. | |
• | the Nominating/Governance Committee has reviewed the following Covered Transactions and determined that each of these transactions will be deemed to be pre-approved or ratified (as applicable) by the Nominating/Governance Committee: |
• | any transaction in which the total amount involved is equal to or less than $120,000; | |
• | the employment and compensation (a) of a director or executive officer if the individual’s compensation is reported in our annual proxy statement, or (b) of any other executive officer who is not an Immediate Family Member of one of the foregoing individuals or a director nominee if such executive officer’s compensation was approved, or recommended for approval, by the Compensation Committee; | |
• | any transaction that would not (a) need to be reported under federal securities laws, (b) be deemed to impair a director’s independence under our Corporate Governance Principles and (c) be deemed to be a conflict of interest under our Ethics Policy; and | |
• | any transaction where an individual’s interest therein arises solely from ownership of our common stock and all holders of our common stock received the same benefit on a pro rata basis. |
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As part of KB Home’s commitment to sustainability and the responsible use of natural resources, this report has been printed on paper certified by the Forest Stewardship Council (FSC). This certification supports the development of responsible forest management worldwide by adhering to strict standards for paper sources. The wood in this paper comes from FSC-certified well-managed forests, company-controlled sources and/or recycled material. |
Mark here for address change or comments. | o | |||
PLEASE SEE REVERSE SIDE |
YOUR DIRECTORS RECOMMEND A VOTE“FOR” |
1. | ELECTION OF DIRECTORS |
FOR | AGAINST | ABSTAIN | ||||||
01 | STEPHEN F. BOLLENBACH | o | o | o | ||||
02 | TIMOTHY W. FINCHEM | o | o | o | ||||
03 | J. TERRENCE LANNI | o | o | o |
FOR | AGAINST | ABSTAIN | ||||||
2. | PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS KB HOME’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING NOVEMBER 30, 2008. | o | o | o | ||||
YOUR DIRECTORS RECOMMEND A VOTE“AGAINST” | ||||||||
FOR | AGAINST | ABSTAIN | ||||||
3. | STOCKHOLDER PROPOSAL RELATING TO EXECUTIVE COMPENSATION | o | o | o | ||||
FOR | AGAINST | ABSTAIN | ||||||
4. | STOCKHOLDER PROPOSAL RELATING TO STOCKHOLDER APPROVAL OF SEVERANCE AGREEMENTS. | o | o | o |
Signature(s) | Date | , 2008 | |||||||||
Telephone 1-866-540-5760 Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. | OR | Internet http://www.proxyvoting.com/kbh-sp Use the Internet to vote your proxy. Have your proxy card in hand when you access the website. | OR | Mark, sign and date your proxy card and return it in the enclosed postage-paid envelope. |
Mark here for address change or comments. | o | |||
PLEASE SEE REVERSE SIDE |
YOUR DIRECTORS RECOMMEND A VOTE“FOR” |
1. | ELECTION OF DIRECTORS |
FOR | AGAINST | ABSTAIN | ||||||
01 | STEPHEN F. BOLLENBACH | o | o | o | ||||
02 | TIMOTHY W. FINCHEM | o | o | o | ||||
03 | J. TERRENCE LANNI | o | o | o |
FOR | AGAINST | ABSTAIN | ||||||
2. | PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS KB HOME’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING NOVEMBER 30, 2008. | o | o | o | ||||
YOUR DIRECTORS RECOMMEND A VOTE“AGAINST” | ||||||||
FOR | AGAINST | ABSTAIN | ||||||
3. | STOCKHOLDER PROPOSAL RELATING TO EXECUTIVE COMPENSATION | o | o | o | ||||
FOR | AGAINST | ABSTAIN | ||||||
4. | STOCKHOLDER PROPOSAL RELATING TO STOCKHOLDER APPROVAL OF SEVERANCE AGREEMENTS. | o | o | o |
Signature(s) | Date | , 2008 | |||||||||
Telephone 1-866-540-5760 Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. | OR | Internet http://www.proxyvoting.com/kbh Use the Internet to vote your proxy. Have your proxy card in hand when you access the website. | OR | Mark, sign and date your proxy card and return it in the enclosed postage-paid envelope. |
Mark here for address change or comments. | o | |||
PLEASE SEE REVERSE SIDE |
YOUR DIRECTORS RECOMMEND A VOTE“FOR” |
1. | ELECTION OF DIRECTORS |
FOR | AGAINST | ABSTAIN | ||||||
01 | STEPHEN F. BOLLENBACH | o | o | o | ||||
02 | TIMOTHY W. FINCHEM | o | o | o | ||||
03 | J. TERRENCE LANNI | o | o | o |
FOR | AGAINST | ABSTAIN | ||||||
2. | PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS KB HOME’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING NOVEMBER 30, 2008. | o | o | o | ||||
YOUR DIRECTORS RECOMMEND A VOTE“AGAINST” | ||||||||
FOR | AGAINST | ABSTAIN | ||||||
3. | STOCKHOLDER PROPOSAL RELATING TO EXECUTIVE COMPENSATION | o | o | o | ||||
FOR | AGAINST | ABSTAIN | ||||||
4. | STOCKHOLDER PROPOSAL RELATING TO STOCKHOLDER APPROVAL OF SEVERANCE AGREEMENTS. | o | o | o |
Signature(s) | Date | , 2008 | |||||||||
Telephone 1-866-540-5760 Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. | OR | Internet http://www.proxyvoting.com/kbh-gst Use the Internet to vote your proxy. Have your proxy card in hand when you access the website. | OR | Mark, sign and date your proxy card and return it in the enclosed postage-paid envelope. |