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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under §240.14a-12
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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(3)
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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):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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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.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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Date Filed:
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Time and Date
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9:00 a.m., Pacific Time, on Thursday, April 12, 2018.
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Location
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KB Home Corporate Office, 10990 Wilshire Boulevard, Los Angeles, CA 90024.
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Items of Business
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(1) Elect ten directors, each to serve for a one-year term.
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(2) Advisory vote to approve named executive officer compensation.
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(3) Approve the Amended and Restated Rights Agreement.
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(4) Ratify Ernst & Young LLP’s appointment as KB Home’s independent registered public accounting firm for the fiscal year ending November 30, 2018.
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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.
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Record Date
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You are entitled to vote at the meeting and at any adjournment or postponement of the meeting if you were a stockholder on February 9, 2018.
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Voting
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Please vote as soon as possible, even if you plan to attend the meeting, to ensure your shares will be represented. You do not need to attend the meeting to vote if you vote before the meeting. If you are a holder of record, you may vote your shares via the Internet, telephone or mail. If your shares are held by a broker or financial institution, you must vote your shares using a method the broker or financial institution provides.
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Attending the Meeting
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Only stockholders on February 9, 2018, authorized proxy holders of such stockholders and invited guests of the Board of Directors (“Board”) may attend the meeting in person. Picture identification and an admission ticket will be required to attend. The accompanying Proxy Statement describes how to request an admission ticket. We must receive written ticket requests by March 30, 2018.
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Annual Report
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Copies of our Annual Report on Form 10-K for the fiscal year ended November 30, 2017 (“Annual Report”), including audited financial statements, are being made available to stockholders concurrently with the accompanying Proxy Statement. We anticipate these materials will first be made available on or about March 2, 2018.
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Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting To Be Held on April 12, 2018: Our Proxy Statement and Annual Report are available at
www.kbhome.com/investor/proxy
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KB HOME
10990 Wilshire Boulevard
Los Angeles, CA 90024
(NYSE:KBH)
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PROXY STATEMENT
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TABLE OF CONTENTS
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ANNUAL MEETING OVERVIEW
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Items of Business
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Key Meeting Information
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Elect ten directors, each to serve for a one-year term.
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Date
Time
Location
To Attend
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Thursday, April 12, 2018.
9:00 a.m., Pacific Time.
KB Home Corporate Office
Los Angeles, CA 90024.
You must request an admission ticket to attend the Annual Meeting in person. We must receive written ticket requests by March 30, 2018, as described under “Admission to the Annual Meeting.”
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Advisory vote to approve named executive officer (“NEO”) compensation.
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Approve the Amended and Restated Rights Agreement.
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Ratify Ernst & Young LLP’s appointment as our independent registered public accounting firm (“Independent Auditor”) for the fiscal year ending November 30, 2018.
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Name
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Year First Elected
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Primary Occupation
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Committee Membership
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Dorene C. Dominguez
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2017
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Chairwoman and Chief Executive Officer, Vanir Group of Companies, Inc.
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ACC
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Timothy W. Finchem
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2005
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Board Chair, The First Tee; Former PGA TOUR Commissioner
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MDCC
NCGC (Chair)
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Dr. Stuart A. Gabriel
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2016
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Director, Richard S. Ziman Center for Real Estate at UCLA; and Professor of Finance and Arden Realty Chair, UCLA Anderson School of Management
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ACC
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Dr. Thomas W. Gilligan
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2012
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Director, Hoover Institution on War, Revolution and Peace
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ACC
NCGC
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Kenneth M. Jastrow, II
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2001
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Former Chairman and CEO, Temple-Inland Inc.
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MDCC (Chair)
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Robert L. Johnson
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2008
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Founder and Chairman, The RLJ Companies
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MDCC
NCGC
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Melissa Lora
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2004
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President, Taco Bell International
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ACC (Chair)
MDCC
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Jeffery T. Mezger
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2006
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Chairman, President and Chief Executive Officer (“CEO”), KB Home
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N/A
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James C. Weaver
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2017
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Chief Executive Officer, McCombs Partners
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ACC
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Michael M. Wood
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2014
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Founder and Chairman, Redwood Investments LLC
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ACC
NCGC
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Your Board recommends a vote “FOR” the election of each director nominee
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FY2017 K
EY
P
ERFORMANCE
M
ETRICS
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Stockholder Returns
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Total Stockholder Return (“TSR”)
Return on Equity
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99%
10% (+370 basis points)
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Financial Results
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Total Revenues
Homebuilding Operating Income
Total Pretax Income
Net Income
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22%
86%
94%
71%
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Operating Results
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Net Order Value
Year-End Backlog Value
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17%
9%
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Your Board recommends an advisory vote “FOR” approval of NEO compensation
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Your Board recommends a vote “FOR” approving the Amended and Restated Rights Agreement
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Your Board recommends a vote “FOR” ratifying Ernst & Young LLP’s appointment
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CORPORATE GOVERNANCE AND BOARD MATTERS
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Corporate Governance Highlights
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• All directors are independent, except our CEO, and elected annually under a majority voting standard.
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• There is Board-level oversight of our political contributions.
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• Our three standing Board committees are entirely composed of independent directors.
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• All directors, senior executives and employees must comply with the standards of conduct in our Ethics Policy.
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• Non-employee directors meet in executive sessions at each in-person Board meeting, and any non-employee director can request additional executive sessions.
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• Each director attended at least 75% of the meetings of the Board and Board committees on which they served during 2017.
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• All directors, senior executives and employees are prohibited from pledging or hedging their holdings of our securities.
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• We expect all directors to attend our annual meeting of stockholders. All directors serving at the time attended our 2017 Annual Meeting of Stockholders on April 13, 2017.
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• Beginning with 2017 awards, employee equity award agreements require double-trigger vesting in a change in control.
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• Executive officers are subject to an incentive compensation clawback policy.
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• Directors and senior executives are subject to strong stock ownership requirements.
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• We have one class of voting securities and no supermajority voting requirements (except as provided by Delaware law).
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Lead Independent Director Duties
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• Preside at all meetings of the Board at which the Chairman is not present, and at all executive sessions of the non-employee directors.
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• Serve as liaison between the Chairman and the non-employee directors.
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• Consult with the Chairman, Board committee chairs and other non-employee directors (as appropriate) regarding meeting agendas and schedules to assure that there is sufficient time for discussion of all agenda items, and regarding the content and flow of information to the Board.
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• Organize and preside at meetings of the non-employee directors at any time and for any purpose.
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• Provide Board leadership if there is (or there is perceived to be) a conflict of interest with respect to the role of a Chairman who is also the Chief Executive Officer.
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• If requested by major stockholders, being available to them for consultation and communication as appropriate.
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• Any such additional responsibilities, duties and functions as set forth in our Corporate Governance Principles or By-Laws, or as may otherwise be determined by the Board from time to time.
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Audit Committee
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Compensation Committee
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Nominating Committee
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Members
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Lora (Chair)
Dominguez
Gabriel
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Gilligan
Weaver
Wood
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Jastrow (Chair)
Finchem
Johnson
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Lora
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Finchem (Chair)
Gilligan
Johnson
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Wood
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FY2017 Meetings
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6
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5
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4
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Key Duties
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– Oversees our corporate accounting and reporting practices and audit process, including our Independent Auditor’s qualifications, independence, retention, compensation and performance.
– Is authorized to approve our incurring, guaranteeing or redeeming debt, and our entry into certain transactions.
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– Evaluates and determines our CEO’s compensation.
– Determines the compensation of our CEO’s direct reports.
– Oversees an annual review of leadership development and workforce succession plans at all management levels, including for the CEO.
– Evaluates and recommends non-employee director compensation and benefits.
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– Oversees our corporate governance policies and practices.
– Reviews “related party transactions,” as discussed below.
– Oversees annual Board and committee performance evaluations.
– Identifies, evaluates and recommends qualified director candidates to the Board.
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Other Items
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– Each member is financially literate, and an “audit committee financial expert,” per NYSE listing standards and Securities and Exchange Commission (“SEC”) rules.
– It is a separately designated standing audit committee as defined in Section 3(a)(58)(A) of the Securities Exchange Act of 1934.
– The Board determined that Dr. Gabriel’s simultaneous service on the audit committees of three other public companies does not impair his ability to serve effectively on the Audit Committee.
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– Each member is a “non-employee director” under SEC rules and an “outside director” under Internal Revenue Code (“Code”) Section 162(m).
– Is assisted with its duties by our management and an outside consultant, Frederic W. Cook & Co., Inc. (“FWC”).
– May delegate its duties to our management, except the authority to grant equity-based awards, or to a Board subcommittee.
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– Regularly evaluates the skills and characteristics of current and potential directors, and identified for each individual the Board has nominated for election at the Annual Meeting certain specific skills and qualifications that led to the Board’s determination that each such nominee should serve as a director, as described under “Election of Directors.”
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Compensation Committee Interlocks and Insider Participation
None of our directors or executive officers had any relationship that would constitute a “compensation committee interlock” under SEC rules.
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Audit Committee Role
. The Audit Committee oversees our management’s performance of an annual enterprise risk management assessment that identifies significant risks in our business and operations, along with corresponding mitigating factors, and receives periodic updates upon request or as deemed appropriate. The Audit Committee chair reports to the Board on significant risks as deemed appropriate. In addition, at each of its regular meetings, the Audit Committee receives reports from our senior finance, accounting, legal and internal audit executives, and conducts separate executive sessions with each of those executives and with our Independent Auditor to discuss matters relevant to their respective duties and roles, including risk areas.
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Compensation Committee Role
. The Compensation Committee oversees an annual employee compensation risk assessment performed by FWC together with our management that largely focuses on potential policy and program design and implementation risks. The Compensation Committee also reviews and, as appropriate, approves compensation arrangements developed by our senior human resources personnel. The Compensation Committee chair reports to the Board on significant risks as deemed appropriate. Based on this oversight approach and our most recent annual risk assessment, we do not believe that our present employee compensation policies and programs are likely to have a material adverse effect on us.
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DIRECTOR COMPENSATION
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Non-Employee Director Compensation
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Board Retainer
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$100,000
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Equity Grant (value)
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$145,000
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Lead Independent Director Retainer
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$40,000*
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Committee Chair Retainers
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$25,000 (Audit Committee)
$18,000 (Compensation Committee)
$15,000 (Nominating Committee)
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Committee Member Retainers
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$10,000 (Audit Committee)
$7,000 (Compensation Committee) $5,000 (Nominating Committee) |
Meeting Fees
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$1,500 (for each additional non-regularly scheduled meeting)
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Name(a)
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Fees Earned or
Paid in Cash
($)(b)
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Stock
Awards
($)(c)
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All Other
Compensation
($)
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Total
($)
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Ms. Dominguez
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$
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55,000
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$
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72,500
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$
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—
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$
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127,500
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Mr. Finchem
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—
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267,000
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—
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267,000
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Dr. Gabriel
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110,000
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145,000
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—
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255,000
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Dr. Gilligan
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115,000
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145,000
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—
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260,000
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Mr. Jastrow
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118,000
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145,000
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—
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263,000
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Mr. Johnson
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100,000
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157,000
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—
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257,000
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Ms. Lora
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10,000
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317,000
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—
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327,000
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Mr. Weaver
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36,250
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27,500
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—
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63,750
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Mr. Wood
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100,000
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160,000
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—
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260,000
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(a)
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Ms. Dominguez was elected to the Board on July 12, 2017, and Mr. Weaver was elected to the Board on October 5, 2017. Therefore, each received prorated compensation during 2017.
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(b)
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Fees Earned or Paid in Cash.
These amounts generally represent the cash retainers paid to directors per their elections. The amount for Ms. Lora reflects her Lead Independent Director retainer paid in the 2017 first quarter for the 2016–2017 Director Year.
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(c)
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Stock Awards
. These amounts represent the aggregate grant date fair value of the unrestricted shares of our common stock or stock units granted to our directors in 2017. The grant date fair value of each such award is equal to the closing price of our common stock on the date of grant. All such grants were made on April 13, 2017, except that Ms. Dominguez’s and Mr. Weaver’s grants were made on the respective dates on which they were elected to the Board. The table below shows the respective grants of unrestricted shares of our common stock and/or stock units to our directors in 2017 and each director’s total holdings of equity-based compensation awards as of February 16, 2018.
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Name
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2017 Common Stock Grants
(#)
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2017 Stock Unit Grants
(#)
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Total Holdings
(#)(i)
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Ms. Dominguez
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3,051
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—
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3,051
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Mr. Finchem
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—
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13,288
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180,142
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Dr. Gabriel
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7,217
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—
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17,251
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Dr. Gilligan
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7,217
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—
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65,489
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Mr. Jastrow
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—
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7,217
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153,018
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Mr. Johnson
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7,814
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—
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156,682
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Ms. Lora
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—
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15,777
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223,749
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Mr. Weaver
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1,413
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—
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1,413
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Mr. Wood
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746
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7,217
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44,314
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(i)
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Total Holdings
. These amounts reflect the directors’ total respective outstanding holdings of equity-based compensation awards, consisting of grants of unrestricted shares of our common stock, stock units and stock options in the following amounts: Ms. Dominguez
3,051
,
0
and
0
; Mr. Finchem
0
,
124,792
and
55,350
; Dr. Gabriel
17,251
,
0
and
0
; Dr. Gilligan
17,251
,
21,349
and
26,889
; Mr. Jastrow
10,034
,
87,634
and
55,350
; Mr. Johnson
28,570
,
34,769
and
93,343
; Ms. Lora
0
,
157,179
and
66,570
; Mr. Weaver
1,413
,
0
and
0
; and Mr. Wood
1,784
,
31,152
and
11,378
. Director stock options were last granted in April 2014, as they ceased being a component of director compensation after that date; accordingly, no director stock options have been granted to Ms. Dominguez, Dr. Gabriel or Mr. Weaver. Some director stock options held by Mr. Johnson (37,993) and Ms. Lora (11,220) have 15-year terms. The remainder have ten-year terms. For directors who leave the Board due to retirement or disability (in each case as determined by the Compensation Committee), or death, their stock options will be exercisable for the options’ respective remaining terms. Otherwise, director stock options must be exercised by the earlier of their respective terms or the first anniversary of a director’s leaving the Board (for 15-year stock options), or the third anniversary of leaving the Board (for ten-year stock options). Based on the directors’ respective elections, each director stock option represents a right to receive shares of our common stock equal in value to the positive difference between the option’s stated exercise price and the fair market value of our common stock on an exercise date, and are therefore settled in a manner similar to stock appreciation rights (and are referred to in this Proxy Statement as “Director SARs”). No Director SARs held by current directors have been so settled.
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ELECTION OF DIRECTORS
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The Board will present as nominees at the Annual Meeting, and recommends our stockholders elect to the Board, each of the individuals named below for a one-year term ending at the election of directors at our 2019 Annual Meeting of Stockholders. Each nominee has consented to being nominated and has agreed to serve as a director if elected. Each nominee is standing for re-election, except for Ms. Dominguez and Mr. Weaver, who were each elected to the Board in 2017. Should any of the nominees become unable to serve as a director prior to the Annual Meeting, the individuals named as proxies for the meeting will, unless otherwise directed, vote for the election of another person as the Board may recommend. On the date of the Annual Meeting, if the Board’s nominees are elected, the Board will have ten directors. There are no term limits for directors.
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Voting Standard
To be elected, each nominee must receive a majority of votes cast in favor (
i.e.
, the votes cast for a nominee’s election must exceed the votes cast against their election).
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Director Resignation Policy
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Our Corporate Governance Principles provide that a director nominee who fails to win election to the Board in an uncontested election is expected to tender their resignation from the Board (or to have previously submitted a conditional tender). An “uncontested election” is one in which there is no director nominee that has been nominated by a stockholder in accordance with our By-laws. This election is an uncontested election. If an incumbent director fails to receive the required vote for election in an uncontested election, the Nominating Committee will act promptly to determine whether to accept the director’s resignation and will submit its recommendation for the Board’s consideration. The Board expects the director whose resignation is under consideration to abstain from participating in any decision on that resignation. The Nominating Committee and the Board may consider any relevant factors in deciding whether to accept a director’s resignation.
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Dorene C. Dominguez
Chairwoman and Chief Executive Officer, Vanir Group of Companies, Inc.
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Age: 55
Elected in 2017
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Other Professional Experience:
–Board Member, California Chamber of Commerce (2017-Present)
–Board Member, Pride Industries, nonprofit employer of individuals with disabilities (2009-Present)
–Latino Studies Advisory Board Member, University of Notre Dame (2007-Present)
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Public Company Directorships:
–KB Home
–CIT Group Inc.
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Dorene C. Dominguez has served since 2004 as Chairwoman and Chief Executive Officer of the Vanir Group of Companies, Inc. and its subsidiaries Vanir Construction Management, Inc. and Vanir Development Company, Inc., which provide a wide range of program, project and construction management services for clients in the healthcare, education, justice, water/wastewater, public buildings, transportation and energy markets throughout the United States. Ms. Dominguez also serves as Chair of The Dominguez Dream, a nonprofit organization that provides academic enrichment programs in math, science, language arts and engineering to elementary schools in underserved communities.
Ms. Dominguez has extensive experience in executive management, finance, and civic engagement, as well as significant expertise in project and asset management and real estate development. She also has a substantial presence and is well-regarded in California, an important market for us.
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Timothy W. Finchem
Board Chair, The First Tee; Former PGA TOUR Commissioner
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Age: 70
Director Since: 2005
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Other Professional Experience:
–PGA TOUR Commissioner (1994-2016)
–Deputy Advisor to the President, White House Office of Economic Affairs (1978-1979)
–Co-founder, National Marketing and Strategies Group (1980-1986)
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Public Company Directorships:
–KB Home
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Mr. Finchem has been Board Chair of The First Tee, a nonprofit youth development organization providing educational programs through the game of golf, since it was founded in 1997. He previously served as Commissioner of the PGA TOUR, a membership organization for professional golfers, from 1994 until his retirement in December 2016. He joined the PGA TOUR in 1987, and was promoted to Deputy Commissioner and Chief Operating Officer in 1989. Mr. Finchem has demonstrated success in broadening the popularity of professional golf among the demographic groups that make up our core homebuyers, and has experience in residential community development. He also has a substantial presence in Florida, one of our key markets.
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Dr. Stuart A. Gabriel
Director, Richard S. Ziman Center for Real Estate at UCLA; and Professor of Finance and Arden Realty Chair, UCLA Anderson School of Management
|
Age: 64
Director Since: 2016
|
Other Professional Experience:
–Director and Lusk Chair, USC Lusk Center for Real Estate (1997-2007)
–Associate Professor/Professor, Finance and Business Economics, USC Marshall School of Business (1990-1997)
–Economics Staff Member, Federal Reserve Board (1986-1990)
|
|
Public Company Directorships:
–KB Home
–KBS Real Estate Investment Trust, Inc.
–KBS Real Estate Investment Trust II, Inc.
–KBS Real Estate Investment Trust III, Inc.
|
|||
|
||||
|
Dr. Gabriel has been since 2007 the director of the Richard S. Ziman Center for Real Estate at UCLA, and Professor of Finance and Arden Realty Chair at the UCLA Anderson School of Management. With Dr. Gabriel’s significant professional experience in and distinguished study of macroeconomics and real estate, mortgage and finance markets, he has considerable knowledge and insight with respect to the economic, regulatory and financial drivers that affect housing and homebuilding at local, regional and national levels. In addition, with his two decades of service in leadership roles at two of the most preeminent academic institutions in the country—UCLA and USC—he has substantial management and administrative expertise, and is highly respected for his perspective on housing and land use matters in California, an important market for us, and nationally.
|
|||
|
|
|
|
|
![]() |
|
Dr. Thomas W. Gilligan
Director, The Hoover Institution on War, Revolution and Peace
|
Age: 63
Director Since: 2012
|
Other Professional Experience:
–Dean, McCombs School of Business (2008-2015)
–Interim Dean, USC Marshall School of Business (2006-2007)
–Staff Economist, White House Council of Economic Advisors (1983-1984)
|
|
Public Company Directorships:
–KB Home
–Southwest Airlines Co.
|
|||
|
||||
|
Dr. Gilligan has been the Tad and Dianne Taube Director of The Hoover Institution on War, Revolution and Peace at Stanford University since September 2015. The Hoover Institution is a public policy research center devoted to the advanced study of economics, politics, history and political economy, as well as international affairs. Dr. Gilligan has deep knowledge of and significant academic credentials in the fields of finance, economics and business administration, and brings extensive leadership skills and experience from his many years of service as a dean at two of the premier post-graduate business schools in the country and his current position as the head of a prominent public policy institution. In addition, he is well-known and highly regarded, professionally and personally, in both Texas and California, which are key markets for us.
|
|||
|
|
|
|
|
![]() |
|
Kenneth M. Jastrow, II
Former Chairman and CEO, Temple-Inland Inc.
|
Age: 70
Director Since: 2001
|
Other Professional Experience:
–Non-Executive Chairman, Forestar Group Inc., a real estate and natural resources company (2007-2015)
–Chairman and Chief Executive Officer, Temple-Inland Inc., a paper, forest products and financial services company (2000-2007)
|
|
Public Company Directorships:
–KB Home
–MGIC Investment Corporation
–Genesis Energy, LLC
–Forestar Group Inc. (2007-2015)
|
|||
|
||||
|
Kenneth M. Jastrow, II has extensive experience and leadership in the paper, building products, forestry, real estate and mortgage lending industries, enabling him to provide critical perspective on businesses that impact the homebuilding industry, and on sustainability practices. He also brings significant corporate governance expertise from his service on several public company boards, and has a substantial presence in Texas, a key market for us.
|
|||
|
|
|
|
|
|
|
|
|
|
![]() |
|
Robert L. Johnson
Founder and Chairman, The RLJ Companies
|
Age: 71
Director Since: 2008
|
Other Professional Experience:
–Founder and Chief Executive Officer, Black Entertainment Television (BET), a television and entertainment network (1979-2006)
–Museum Council Member, Smithsonian Institution’s National Museum of African American History and Culture (2004-Present)
|
|
Public Company Directorships:
–KB Home
–Lowe’s Companies, Inc.
–RLJ Entertainment, Inc.
–RLJ Lodging Trust
–Strayer Education, Inc. (2003-2016)
|
|||
|
||||
|
Robert L. Johnson is founder and chairman of The RLJ Companies, an innovative business network that owns or holds interests in a diverse portfolio of companies in the consumer financial services, private equity, investment banking, real estate, hospitality, professional sports, film production, gaming and automobile dealership industries. Prior to forming The RLJ Companies in 2004, Mr. Johnson was founder and chief executive officer of BET, which was acquired by Viacom Inc. in 2001. He continued to serve as chief executive officer of BET until 2006. Mr. Johnson has significant experience in real estate, finance, mortgage banking and brand-building enterprises and a unique and diverse background in a number of industry sectors.
|
|||
|
|
|
|
|
![]() |
|
Melissa Lora
President, Taco Bell International
|
Age: 55
Director Since: 2004
Lead Independent Director Since: 2016
|
Other Professional Experience:
–Global Chief Financial and Development Officer, Taco Bell Corp. (2012-2014)
–Chief Financial Officer, Taco Bell Corp. (2001-2012)
–Regional Vice President and General Manager, Taco Bell Corp. (1998-2000)
|
|
Public Company Directorships:
–KB Home
–MGIC Investment Corporation
|
|||
|
||||
|
Melissa Lora has been since 2013 the President of Taco Bell International, a segment of Taco Bell Corp., which is a division of Yum! Brands, Inc., one of the world’s largest restaurant companies. Taco Bell Corp. recently announced that Ms. Lora will retire from her position in summer 2018. Ms. Lora is very knowledgeable of and has substantial experience and expertise in financial matters as well as in managing real estate assets. She has made significant contributions to the work of the Audit Committee since joining the Board and has provided strong leadership as its chair since 2008. In November 2016, the Board elected Ms. Lora as Lead Independent Director.
|
|||
|
|
|
|
|
![]() |
|
Jeffrey T. Mezger
Chairman, President and Chief Executive Officer,
KB Home
|
Age: 62
Director Since: 2006
Chairman Since: 2016
|
Other Professional Experience:
–Executive Board Member, USC Lusk Center for Real Estate (2000-2017)
–Policy Advisory Board Member, Fisher Center for Real Estate and Urban Economics at UC Berkeley Haas School of Business (2010-present)
–Policy Advisory Board Member, Harvard Joint Center for Housing Studies (2004 -2017; Board Chair 2015-2016)
–Founding Chairman, Leading Builders of America (2009-2013; Executive Committee member until 2016)
|
|
Public Company Directorships:
–KB Home
|
|||
|
||||
|
Jeffrey T. Mezger
has been our President and Chief Executive Officer since November 2006, and was elected Chairman of the Board in 2016. Prior to becoming President and Chief Executive Officer, Mr. Mezger served as our Executive Vice President and Chief Operating Officer, a position he assumed in 1999. From 1995 until 1999, Mr. Mezger held a number of executive posts in our southwest region, including Division President, Arizona Division, and Senior Vice President and Regional General Manager over Arizona and Nevada. Mr. Mezger joined us in 1993 as president of the Antelope Valley Division in Southern California. In 2012, Mr. Mezger was inducted into the California Homebuilding Foundation Hall of Fame. As our CEO, Mr. Mezger has demonstrated consistently strong operational leadership, and ownership of our business strategy and its results. He has also established himself as a leading voice in the industry through his nearly 40 years of experience in the public homebuilding sector.
|
|||
|
|
|
|
|
|
|
|
|
|
![]() |
|
James C. Weaver
Chief Executive Officer, McCombs Partners
|
Age: 42
Elected in 2017
|
Other Professional Experience:
–Board Member and Current Chair Pro Tem, San Antonio Branch, Federal Reserve Bank of Dallas (Member 2014-Present; Chair 2016-Present)
–Member, The University of Texas System Board of Regents (2017-Present)
–Member, The McCombs School of Business Advisory Board (2014-Present)
–San Antonio Chamber of Commerce Board of Directors (Member 2014-2017; Chairman 2016-2017)
|
|
Public Company Directorships:
–KB Home
|
|||
|
||||
|
James C. Weaver has been since 2006 the Chief Executive Officer of McCombs Partners, the investment management division of McCombs Enterprises, overseeing the implementation of the firm’s investment strategies, including management of its direct investments in private operating businesses. He began his career at McCombs as an investment analyst in 2000. Mr. Weaver also serves as a director of several private companies, including Circuit of the Americas, Cox Enterprises, Inc. and Southern Towing Company. Mr. Weaver has considerable experience in executive leadership, business strategy and execution, financial planning and analysis, and asset/investment management across a broad range of industries, and brings critical insight on governance and economic and regulatory policymaking. In addition, with his professional achievements and significant community involvement, he has a substantial presence and is well-regarded in Texas, a core market for us.
|
|||
|
|
|
|
|
![]() |
|
Michael M. Wood
Founder and Chairman, Redwood Investments LLC
|
Age: 70
Director Since: 2014
|
Other Professional Experience:
–Chairman, Winsight, LLC, a business-to-business publishing company (2012-2017)
–U.S. Ambassador to Sweden (2006-2009)
–Co-Founder and Chief Executive Officer, Hanley Wood LLC, a business-to-business publishing company (1976-2005)
|
|
Public Company Directorships:
–KB Home
|
|||
|
||||
|
Michael M. Wood is founder and chairman of Redwood Investments LLC, a Washington, D.C.-based investment company established in 2005 and concentrating in media, real estate and alternative energy. In 2009, Mr. Wood received from the King of Sweden the insignia of Commander Grand Cross, Order of the Polar Star medal given by Sweden’s Royal Family to people of foreign birth who make significant contributions to Sweden. Prior to becoming the U.S. Ambassador to Sweden, Mr. Wood was co-founder and CEO of Hanley Wood LLC, the leading media company in the construction industry and one of the ten largest business-to-business media companies in the U.S. Mr. Wood has extensive knowledge of the homebuilding industry and significant experience in real estate and alternative energy investing, providing substantial insight and expertise with respect to our business operations and our longstanding commitment to sustainability. He also has a distinguished policymaking background.
|
|
OWNERSHIP OF KB HOME SECURITIES
|
Non-Employee Directors
|
Total Ownership(a)
|
Stock Options(b)
|
Restricted Stock(b)
|
|||
Dorene C. Dominguez
|
3,051
|
|
—
|
|
—
|
|
Timothy W. Finchem
|
180,142
|
|
55,350
|
|
—
|
|
Dr. Stuart A. Gabriel
|
17,251
|
|
—
|
|
—
|
|
Dr. Thomas W. Gilligan
|
65,489
|
|
26,889
|
|
—
|
|
Kenneth M. Jastrow, II
|
153,018
|
|
55,350
|
|
—
|
|
Robert L. Johnson
|
156,682
|
|
93,343
|
|
—
|
|
Melissa Lora
|
225,792
|
|
66,570
|
|
—
|
|
James C. Weaver
|
1,413
|
|
—
|
|
—
|
|
Michael M. Wood
|
44,314
|
|
11,378
|
|
—
|
|
Named Executive Officers
|
|
|
|
|||
Jeffrey T. Mezger
|
4,256,314
|
|
3,495,027
|
|
—
|
|
Jeff J. Kaminski
|
388,991
|
|
262,559
|
|
25,273
|
|
Albert Z. Praw
|
298,883
|
|
187,606
|
|
17,875
|
|
Brian J. Woram
|
576,551
|
|
437,461
|
|
17,155
|
|
William R. Hollinger
|
584,747
|
|
429,772
|
|
10,170
|
|
All directors and executive officers as a group (15 people)
|
7,201,141
|
|
5,308,769
|
|
78,898
|
|
(a)
|
No non-employee director or NEO owns more than 1% of our outstanding common stock, except for Mr. Mezger, who owns 4.3%. All non-employee directors and executive officers as a group own 8.6% of our outstanding common stock. The total ownership amounts reported for each non-employee director includes their respective aggregate equity-based compensation awards, as described under “Director Compensation.” Dr. Gabriel, Ms. Lora, Mr. Wood and Mr. Kaminski each hold their respective reported total ownership amounts in family trusts over which they have shared voting and investment control with their respective spouses. The amounts reported in this column for directors include
2,043
shares of our common stock that Ms. Lora directly owns.
|
(b)
|
The reported stock option amounts are the shares of our common stock that can be acquired within 60 days of February 16, 2018 through the exercise of Director SARs (as described under “Director Compensation”), or common stock option awards (for the NEOs). The respective reported Director SAR/stock option and restricted common stock amounts are included in the total ownership amounts reported for each non-employee director and NEO.
|
Stockholder(a)
|
Total Ownership
|
Percent of Class
|
|
BlackRock, Inc.
55 East 52
nd
Street, New York, NY 10055
|
10,649,861
|
|
12%
|
The Vanguard Group, Inc.
100 Vanguard Blvd., Malvern, PA 19355
|
9,394,663
|
|
11%
|
KB Home Grantor Stock Ownership Trust(b)
Wells Fargo Retirement and Trust Executive Benefits, One West Fourth Street, Winston-Salem, NC 27101
|
8,897,954
|
|
9%
|
(a)
|
The stockholders’ respective voting and dispositive power with respect to their reported ownership is presented below, excluding the GSOT.
|
|
Blackrock, Inc.(i)
|
The Vanguard Group, Inc.(ii)
|
||
Sole voting power
|
10,476,648
|
|
108,498
|
|
Shared voting power
|
—
|
|
11,562
|
|
Sole dispositive power
|
10,649,861
|
|
9,280,566
|
|
Shared dispositive power
|
—
|
|
114,097
|
|
(i)
|
Blackrock, Inc. is a parent holding company. A BlackRock, Inc. subsidiary, BlackRock Fund Advisors, beneficially owned five percent or more of our outstanding shares.
|
(ii)
|
The Vanguard Group, Inc. is an investment adviser to various investment companies. Its subsidiaries, Vanguard Fiduciary Trust Company and Vanguard Investments Australia, Ltd., beneficially own 102,535 and 17,525 shares, respectively.
|
(b)
|
The GSOT’s percent of class figure is relative to the total number of shares of our common stock entitled to vote at the Annual Meeting, as described under “Annual Meeting, Voting and Other Information.” The GSOT holds these shares pursuant to a trust agreement with Wells Fargo Bank, N.A. as trustee. Both the GSOT and the trustee disclaim beneficial ownership of the shares. Under the trust agreement, our employees who hold unexercised common stock options under our employee equity compensation plans determine the voting of the GSOT shares. The number of GSOT shares that any one employee can direct the vote of depends on how many eligible employees submit voting instructions to the trustee. Employees who are also directors cannot vote GSOT shares; therefore, Mr. Mezger cannot direct the vote of any GSOT shares. If all eligible employees submit voting instructions, our other NEOs can direct the vote of the following amounts of GSOT shares: Mr. Kaminski
749,737
; Mr. Praw
531,055
; Mr. Woram
1,052,597
; and Mr. Hollinger
986,370
; and all current executive officers as a group (excluding Mr. Mezger)
3,781,395
.
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
2017 Fiscal Year Performance Highlights
In our 2017 fiscal year, we made great progress on our aggressive performance goals under our Returns-Focused Growth Plan, as discussed in our Annual Report, and produced strong financial and operational results.
These results were achieved across several short-term and long-term metrics, with many demonstrating considerable growth compared to the previous year and over the last three years.
We also generated significant returns for our stockholders in 2017 with a substantial rise in our TSR.
|
Stockholder Returns
|
One-Year TSR
|
ñ
|
99%
|
|
One-Year Return on Equity
|
10% (+370bps)
|
||||
Short-Term Financial Results
|
Total Revenues
Homebuilding Operating Income
Total Pretax Income
Net Income
|
ñ
|
22%
86%
94%
71%
|
||
Short-Term Operating Results
|
Annual Net Order Value
Year-End Backlog Value
|
ñ
|
17%
9%
|
||
Long-Term Performance Results
|
Three-Year Revenue Growth
Three-Year Pretax Income Growth
Three-Year Cumulative Pretax Income
|
ñ
|
82%
205%
$566M
|
Pay for Performance — CEO Compensation
|
||||
![]() |
• Our CEO’s compensation was nearly 90% performance-based.
• 100% of our CEO’s long-term incentives were performance-based restricted stock units (“PSUs”).
• Our CEO’s annual incentive award of $4.38 million was performance-based and formula-driven, and reflected our profitability growth and improved asset efficiency in 2017.
|
|||
Listening to our Stockholders
In 2017, we continued our longstanding practice of reaching out to our stockholders, including nearly all of our 25 largest stockholders, directly engaging with holders representing over 50% of our outstanding shares ahead of our 2017 Annual Meeting. We also engaged with stockholders in early 2018 to solicit additional feedback on our executive compensation programs.
In evaluating our executive compensation programs during 2017, the Compensation Committee considered the strong support stockholders have expressed through our annual NEO compensation advisory votes over the past few years for our approach to executive compensation. Therefore, for 2017, the Compensation Committee decided to retain the core components of our executive compensation programs and to apply the same general principles and philosophy as in the prior fiscal year with respect to its executive compensation decisions. In addition, taking stockholder views into account, the Compensation Committee approved in 2017 employee equity award agreements that require double-trigger vesting in a change in control, and, at its recommendation, the Board adopted in January 2018 an executive officer incentive compensation claw-back policy. The Compensation Committee welcomes and will continue to consider stockholders’ perspectives on executive compensation in the future.
|
KEY FEATURES OF OUR EXECUTIVE COMPENSATION PROGRAMS
|
|||
What We Do
|
What We Don’t Do
|
||
ü
|
Engage with and consider stockholder input in designing our executive pay programs.
|
x
|
Do not allow re-pricing or cash-out of underwater stock options without stockholder approval.
|
ü
|
Link annual NEO incentive pay to objective, pre-established financial performance goals, which are three-year goals for long-term incentives.
|
x
|
Do not provide any new excise tax “gross-ups” to any officer or employee.
|
ü
|
Grant all of our NEOs’ long-term incentives in performance-based restricted stock units.
|
x
|
Do not allow our NEOs (or any employees or non-employee directors) to hedge or pledge their holdings of our securities.
|
ü
|
Beginning with 2017 awards, employee equity award agreements require double-trigger vesting in a change in control.
|
x
|
Do not, without stockholder approval, enter into new severance arrangements with executive officers above the limits specified in a longstanding policy, as described under “Severance Arrangements.”
|
ü
|
Subject our executive officers to an incentive compensation claw-back policy.
|
x
|
Do not provide excessive perquisites. Perquisites are generally limited to market-competitive medical benefits and the opportunity to participate in a deferred compensation plan.
|
ü
|
Perform, under Compensation Committee oversight, annual risk assessments to determine that our employee compensation policies and programs are not likely to have a material adverse effect on us.
|
x
|
Do not pay dividends or dividend equivalents on performance-based equity awards before they vest.
|
ü
|
Engage, at the sole direction of the Compensation Committee, an independent compensation consultant.
|
|
|
ü
|
Maintain robust stock ownership requirements for all NEOs.
|
|
|
ü
|
Maintain a relevant industry peer group.
|
|
|
COMPENSATION TYPE
|
DESCRIPTION
|
RATIONALE
|
|
BASE SALARY
|
• Fixed compensation delivered in cash on a semi-monthly basis.
|
• A market-aligned component of the overall pay package to provide a baseline level of pay; key to attracting and retaining highly qualified executives.
|
|
ANNUAL INCENTIVE PROGRAM
|
• Our NEOs’ 2017 annual incentive payouts were performance-based and formula-driven, focused on pretax income and asset efficiency measures.
|
• Motivates achievement of core strategic short-term financial results.
|
|
LONG-TERM INCENTIVE PROGRAM
|
PSUs
|
• Constituted 100% of total grant date fair value for our NEOs, a shift from prior years’ grants, which included other long-term incentive vehicles.
|
• Focuses executives on achievement of long-term results and encourages retention.
|
• 2017 grants have three separate three-year performance measures: cumulative adjusted earnings per share, average adjusted return on invested capital, and revenue growth versus our peer group.
|
• Establishes strong alignment with long-term stockholder interests through performance-based payouts in shares of our common stock.
|
||
RETIREMENT PROGRAMS AND PERQUISITES
|
• A 401(k) plan in which all eligible employees may participate.
|
• Programs are aligned with market practices.
|
|
• Legacy executive retirement and death benefit plans have been closed to new participants for over a decade.
• Market-competitive medical, dental and vision benefits and the opportunity to participate in a deferred compensation plan.
|
• Focuses executives on earning rewards through performance pay elements, not through entitlements.
|
2017 API Performance Levels and Payout Summary
|
|||
|
Threshold
|
Target
|
Actual Result
|
API Performance Levels
|
$195.0 million
|
$260.0 million
|
$356.2 million
|
API Performance Levels Relative to Target
|
75%
|
100%
|
137%
|
Payout Level Ratios
|
50%
|
100%
|
100%
|
NEO
|
2017 NEO Individual Performance Contributions
|
IPF
|
Mr. Mezger
|
Mr. Mezger provided excellent leadership in establishing and driving performance against our Returns-Focused Growth Plan objectives. In 2017, our pretax income grew by 94% and our net income rose 71%, with total revenues increasing 22%, in each case compared to 2016 levels. We delivered 99% total stockholder return and 10% return on equity in 2017, a 370 basis point improvement from 2016. Mr. Mezger also continued to play a critical role in promoting the KB Home brand as both a premier homebuilder and company in sustainability and innovation.
|
58.5%
|
Mr. Kaminski
|
Mr. Kaminski effectively managed our corporate liquidity and balance sheet, as we generated more than $500 million of net operating cash and reduced our debt by over $300 million. He also played a large role in the successful execution to date of our Returns-Focused Growth Plan, as we are on target to achieve its primary profitability, returns, and balance sheet goals by 2019.
|
11.0%
|
Mr. Praw
|
Mr. Praw led our land investment and asset management efforts, allowing us to achieve 11% growth in deliveries as compared to 2016, and positioning us to meet our 2018 delivery goals, in a very competitive land market. He also spearheaded our initiatives to reduce land held for future development via strategic land sales and activations.
|
8.3%
|
Mr. Woram
|
Mr. Woram achieved significant cost recoveries via settlements and mediations and ensured responsive and skillful transactional support to our divisions. He also led efforts to reduce risk in the areas of construction-defect litigation, regulatory impacts and environmental issues.
|
8.3%
|
Mr. Hollinger
|
Mr. Hollinger played a primary and critical role in our efforts to improve the profitability of the business and key financial metrics. He also continued to work collaboratively with our Information Technology department to lead the implementation of new technology and systems designed to improve efficiency across the entire enterprise.
|
4.7%
|
2017 Annual Incentive Program Payout Levels and Actual Payouts(a)
|
|||||||||||||
NEO
|
API Performance Component Payout(a)
|
Asset Efficiency Component Payout
|
Total Payout
|
||||||||||
Mr. Mezger
|
$
|
1,725,000
|
|
$
|
4,112,900
|
|
$
|
4,378,425
|
|
||||
Mr. Kaminski
|
700,000
|
|
773,366
|
|
1,473,366
|
|
|||||||
Mr. Praw
|
585,000
|
|
584,946
|
|
1,169,946
|
|
|||||||
Mr. Woram
|
585,000
|
|
584,946
|
|
1,169,946
|
|
|||||||
Mr. Hollinger
|
333,600
|
|
333,563
|
|
667,163
|
|
(a)
|
Annex 1 to this Proxy Statement contains a reconciliation of our pretax income calculated in accordance with U.S. generally accepted accounting principles (“GAAP”) to the non-GAAP financial measure of API.
|
NEO Long-Term Incentives Granted in 2017
|
|||||
NEO
|
PSUs
|
||||
#
|
$
|
||||
Mr. Mezger
|
156,006
|
|
$
|
3,999,994
|
|
Mr. Kaminski
|
46,802
|
|
1,200,003
|
|
|
Mr. Praw
|
32,176
|
|
824,993
|
|
|
Mr. Woram
|
30,226
|
|
774,995
|
|
|
Mr. Hollinger
|
18,526
|
|
475,007
|
|
PSU Measures
|
Weight
|
Purpose
|
• Cumulative Adjusted Earnings Per Share (“AEPS”)
|
50%
|
Measures profitability trajectory over the period
|
• Average Adjusted Return on Invested Capital (“AROIC”)
|
20%
|
Measures profitability relative to capital deployed
|
• Revenue Growth Rank Versus Peers
|
30%
|
Measures top-line growth relative to peers
|
Performance Measure
|
PSU Grant Year
|
Threshold Goal
|
Target Goal
|
Maximum Goal
|
AEPS
|
2015
|
$2.73
|
$3.31
|
$4.36
|
2016
|
$3.00
|
$3.64
|
$4.77
|
|
2017
|
$4.13
|
$5.16
|
$6.19
|
|
AROIC
|
2015
|
3.0%
|
3.5%
|
4.3%
|
2016
|
3.1%
|
3.6%
|
4.4%
|
|
2017
|
3.3%
|
3.8%
|
4.6%
|
|
2014—2015 PSU Awards
|
2016—2017 PSU Awards
|
||
Performance Measure
|
Performance (Rank)
|
Target Award Multiplier
|
Performance (Rank)
|
Target Award Multiplier
|
Relative Revenue Growth
(Adjustments to ranking levels and multipliers will be made if there are changes in the peer group composition over time, per the terms of the PSUs)
|
1 or 2
|
200%
|
1 or 2
|
200%
|
3
|
178%
|
3
|
180%
|
|
4
|
156%
|
4
|
160%
|
|
5
|
134%
|
5
|
140%
|
|
6
|
113%
|
6
|
120%
|
|
7
|
90%
|
7
|
100%
|
|
8
|
67%
|
8
|
80%
|
|
9
|
44%
|
9
|
60%
|
|
10
|
21%
|
10
|
40%
|
|
11 or 12
|
0%
|
11
|
20%
|
|
|
12 or 13
|
0%
|
2014 PSU Performance Measure
|
2014 PSU Performance Goals
|
2014 PSU Target Award Multiplier
|
AEPS
|
$4.00 and above
|
200%
|
$3.04
|
100%
|
|
$2.52
|
25%
|
|
Below $2.52
|
0%
|
|
AROIC
|
4.0% and above
|
200%
|
3.3%
|
100%
|
|
2.8%
|
25%
|
|
Below 2.8%
|
0%
|
2014 PSU Award Determinations
|
|||
Performance Measure
|
Average Annual Performance
|
Aggregate Total Performance
|
Target Award Multiplier
|
AEPS (50% weight)
|
N/A
|
$4.43
|
200%
|
AROIC (20% weight)
|
3.3%
|
N/A
|
100%
|
Relative Revenue Growth (30% weight)
|
N/A
|
1st in the peer group
|
200%
|
Weighted Cumulative Multiplier
|
180%
|
2014 PSU Awards(a)
|
||
NEO
|
Target Award(#)
|
Actual Award(#)
|
Mr. Mezger
|
195,622
|
352,120
|
Mr. Kaminski
|
15,048
|
27,086
|
Mr. Praw
|
10,602
|
19,084
|
Mr. Woram
|
10,602
|
19,084
|
Mr. Hollinger
|
6,156
|
11,081
|
(a)
|
Annex 1 to this Proxy Statement contains a reconciliation of our pretax income calculated in accordance with GAAP to the non-GAAP financial measure of adjusted pretax income, adjusted net income and adjusted earnings per share used in computing the AEPS and AROIC performance measures.
|
Our Peer Group
|
||
• Beazer Homes USA, Inc.
• Hovnanian Enterprises, Inc.
• Meritage Homes Corp.
• Taylor Morrison Home Corp.
|
• CalAtlantic Group, Inc.
• Lennar Corp.
• NVR, Inc.
• Toll Brothers, Inc.
|
• D.R. Horton, Inc.
• M.D.C. Holdings, Inc.
• PulteGroup, Inc.
• Tri Pointe Group, Inc.
|
Executive
|
Ownership Guideline
|
Mr. Mezger
|
6.0 times base salary
|
Messrs. Kaminski, Praw and Woram
|
2.0 times base salary
|
Mr. Hollinger
|
1.0 times base salary
|
|
MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE REPORT
|
Management Development and Compensation Committee
|
|||
|
|
|
|
Kenneth M. Jastrow, II, Chair
|
Timothy W. Finchem
|
Robert L. Johnson
|
Melissa Lora
|
|
|
Name and Principal Position
|
Fiscal
Year
|
Salary
($)(a)
|
Bonus
($)
|
Stock
Awards
($)(b)
|
Option
Awards
($)(b)
|
Non-Equity
Incentive Plan
Compensation
($)(c)
|
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)(d)
|
All Other
Compensation
($)(e)
|
Total
($)
|
||||||||||||||||
Jeffrey T. Mezger
Chairman, President and
Chief Executive Officer
|
2017
|
$
|
1,062,500
|
|
$
|
—
|
|
$
|
3,999,994
|
|
$
|
—
|
|
$
|
4,378,425
|
|
$
|
428,586
|
|
$
|
75,008
|
|
$
|
9,944,513
|
|
2016
|
1,000,000
|
|
—
|
|
2,400,004
|
|
1,600,001
|
|
3,771,237
|
|
115,539
|
|
70,078
|
|
8,956,859
|
|
|||||||||
2015
|
1,000,000
|
|
—
|
|
1,984,360
|
|
1,828,403
|
|
3,974,964
|
|
—
|
|
69,196
|
|
8,856,923
|
|
|||||||||
Jeff J. Kaminski
Executive Vice President and Chief Financial Officer
|
2017
|
688,333
|
|
—
|
|
1,200,003
|
|
—
|
|
1,473,366
|
|
—
|
|
56,048
|
|
3,417,750
|
|
||||||||
2016
|
671,250
|
|
—
|
|
719,999
|
|
480,003
|
|
1,100,285
|
|
—
|
|
52,893
|
|
3,024,430
|
|
|||||||||
2015
|
656,250
|
|
—
|
|
566,960
|
|
631,431
|
|
1,386,191
|
|
—
|
|
51,156
|
|
3,291,988
|
|
|||||||||
Albert Z. Praw
Executive Vice President,
Real Estate and
Business Development
|
2017
|
573,333
|
|
—
|
|
824,993
|
|
—
|
|
1,169,946
|
|
—
|
|
48,740
|
|
2,617,012
|
|
||||||||
2016
|
556,250
|
|
—
|
|
495,005
|
|
330,001
|
|
951,323
|
|
—
|
|
45,585
|
|
2,378,164
|
|
|||||||||
2015
|
541,250
|
|
—
|
|
417,760
|
|
439,256
|
|
1,200,439
|
|
—
|
|
43,803
|
|
2,642,508
|
|
|||||||||
Brian J. Woram
Executive Vice President and
General Counsel
|
2017
|
576,250
|
|
—
|
|
774,995
|
|
—
|
|
1,169,946
|
|
—
|
|
49,518
|
|
2,570,709
|
|
||||||||
2016
|
564,167
|
|
—
|
|
464,984
|
|
310,000
|
|
913,869
|
|
—
|
|
46,468
|
|
2,299,488
|
|
|||||||||
2015
|
554,166
|
|
—
|
|
417,760
|
|
439,256
|
|
1,188,560
|
|
—
|
|
44,731
|
|
2,644,473
|
|
|||||||||
William R. Hollinger
Senior Vice President and
Chief Accounting Officer
|
2017
|
410,000
|
|
—
|
|
475,007
|
|
—
|
|
667,163
|
|
95,241
|
|
34,140
|
|
1,681,551
|
|
(a)
|
Salary.
As discussed under “Base Salaries,” NEO annual base salary levels were increased in July 2017 to the following amounts: Mr. Mezger $1,150,000; Mr. Kaminski $700,000; Mr. Praw $585,000; Mr. Woram $585,000; and Mr. Hollinger $417,000.
|
(b)
|
Stock Awards and Option Awards.
These amounts represent the aggregate grant date fair value of stock awards (consisting of both restricted stock and PSUs) and common stock options (for those granted in 2015 and 2016) computed as described in Note 19 — Employee Benefit and Stock Plans in the Notes to the Consolidated Financial Statements in our Annual Report, except that estimates of forfeitures related to service-based vesting conditions have been disregarded. They do not represent realized compensation. The 2017 stock awards represent the grant date fair value of the probable award of shares of our common stock underlying the PSUs granted. The grant date fair value of the PSUs if maximum performance is achieved is as follows: Mr. Mezger
$7,999,988
; Mr. Kaminski
$2,400,006
; Mr. Praw
$1,649,986
; Mr. Woram
$1,549,990
; and Mr. Hollinger
$950,014
.
|
(c)
|
Non-Equity Incentive Plan Compensation.
The 2017 and 2016 amounts reflect only annual incentive payouts. The 2015 amounts include the sum of the annual incentive and three-year performance cash award payouts made in that year, as summarized below. Performance cash awards have not been granted to senior executive officers, including our NEOs, since 2012.
|
NEO
|
Year
|
Annual Incentive Payout
($)
|
Performance Cash Award Payout
($)
|
Total Non-Equity Incentive Plan Compensation
($)
|
||||||
Mr. Mezger
|
2015
|
$
|
2,488,297
|
|
$
|
1,486,667
|
|
$
|
3,974,964
|
|
Mr. Kaminski
|
2015
|
940,191
|
|
446,000
|
|
1,386,191
|
|
|||
Mr. Praw
|
2015
|
799,039
|
|
401,400
|
|
1,200,439
|
|
|||
Mr. Woram
|
2015
|
787,160
|
|
401,400
|
|
1,188,560
|
|
(d)
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings.
These amounts (as applicable) reflect the increase in the actuarial present value of accumulated benefits under our Retirement Plan. These changes are tied to interest rate fluctuations and do not reflect any cash or other compensation received by Mr. Mezger or Mr. Hollinger. The respective amounts attributed to the change in
|
(e)
|
All Other Compensation.
The amounts shown consist of minimal incremental costs associated with spousal travel expenses in connection with a business-related event for each NEO other than Mr. Hollinger, and the following items:
|
•
|
401(k) Plan and DCP Matching Contributions
. The respective aggregate 2017, 2016 and 2015 401(k) Plan and DCP matching contributions we made to our NEOs were as follows: Mr. Mezger
$58,700
,
$55,900
and
$55,900
; Mr. Kaminski
$41,300
,
$40,275
and
$39,375
; Mr. Praw
$34,400
,
$33,375
and
$32,475
; Mr. Woram
$34,575
,
$33,850
and
$32,950
; and Mr. Hollinger
$24,601
.
|
•
|
Premium Payments
. The respective aggregate premiums we paid for our NEOs in 2017, 2016 and 2015 for a supplemental medical expense reimbursement plan and life insurance policies, as described under “Other Benefits,” were as follows: Mr. Mezger
$14,742
,
$14,178
and
$13,296
; Mr. Kaminski
$13,182
,
$12,618
and
$11,781
; Mr. Praw
$12,774
,
$12,210
and
$11,328
; Mr. Woram
$13,182
,
$12,618
and
$11,781
; and Mr. Hollinger
$9,539
.
|
Name
|
Grant
Date(a)
|
Type of
Award
|
Estimated Possible Payouts Under
Non-Equity Incentive Plan Awards(b)
|
Estimated Possible Payouts Under
Equity Incentive Plan Awards(c)
|
Grant
Date
Fair
Value of
Stock and
Option
Awards
($)(d)
|
|||||||||||||||
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
|||||||||||||||
Mr. Mezger
|
2/15/2017
|
Annual Incentive
|
$
|
862,500
|
|
$
|
1,725,000
|
|
$
|
6,900,000
|
|
|
|
|
|
|||||
10/5/2017
|
PSUs
|
|
|
|
|
|
|
63,962
|
|
156,006
|
|
312,012
|
|
$
|
3,999,994
|
|
||||
Mr. Kaminski
|
2/15/2017
|
Annual Incentive
|
350,000
|
|
700,000
|
|
2,100,000
|
|
|
|
|
|
|
|||||||
10/5/2017
|
PSUs
|
|
|
|
19,189
|
|
46,802
|
|
93,604
|
|
1,200,003
|
|
||||||||
Mr. Praw
|
2/15/2017
|
Annual Incentive
|
292,500
|
|
585,000
|
|
1,170,000
|
|
|
|
|
|
|
|||||||
10/5/2017
|
PSUs
|
|
|
|
13,192
|
|
32,176
|
|
64,352
|
|
824,993
|
|
||||||||
Mr. Woram
|
2/15/2017
|
Annual Incentive
|
292,500
|
|
585,000
|
|
1,170,000
|
|
|
|
|
|
|
|||||||
10/5/2017
|
PSUs
|
|
|
|
12,393
|
|
30,226
|
|
60,452
|
|
774,995
|
|
||||||||
Mr. Hollinger
|
2/15/2017
|
Annual Incentive
|
166,800
|
|
333,600
|
|
667,200
|
|
|
|
|
|
|
|||||||
10/5/2017
|
PSUs
|
|
|
|
7,596
|
|
18,526
|
|
37,052
|
|
475,007
|
|
(a)
|
Grant Date.
The date shown for each award is the date the Compensation Committee approved the award.
|
(b)
|
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards
. The 2017 target payouts were set at 150% of base salary for our CEO and at 80% – 100% of base salary for each of our other NEOs. Maximum payouts were limited to a multiple of target, with our CEO at four times, our CFO at three times and our other NEOs at two times. “Threshold” represents the lowest possible payout if threshold performance is achieved for each performance measure. The performance measures are described under “2017 Annual Incentives.”
|
(c)
|
Estimated Possible Payouts Under Equity Incentive Plan Awards.
If there is a payout of the PSUs, “Threshold” represents the lowest possible payout if threshold performance is achieved for each performance measure, and “Maximum” reflects the highest possible payout (200% of the target award of shares granted). The performance measures are described under “Performance-Based Restricted Stock Units.” If threshold performance is not achieved on all three measures, the NEOs will not receive any payout of the PSUs.
|
(d)
|
Grant Date Fair Value of Stock and Option Awards.
The grant date fair value for each award is computed as described in footnote (b) to the Summary Compensation Table. The 2017 stock awards represent the grant date fair value of the probable award of shares of our common stock underlying the PSUs granted as of the grant date.
|
Name
|
Grant Date
|
Option Awards
|
Stock Awards
|
|||||||||||||||||||||
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
|
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)(a)
|
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number
of Shares
or Units
of Stock
That
Have
Not
Vested
(#)(b)
|
Market
Value of
Shares or
Units of
Stock
That
Have
Not
Vested
($)(c)
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested
(#)(d)
|
Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($)(d)
|
||||||||||||||||
Mr. Mezger
|
10/24/2003
|
74,667
|
|
|
|
$
|
33.24
|
|
(e)
|
10/24/2018
|
|
|
|
|
||||||||||
10/24/2003
|
149,333
|
|
|
|
34.05
|
|
(e)
|
10/24/2018
|
|
|
|
|
||||||||||||
10/22/2004
|
80,750
|
|
|
|
40.90
|
|
10/22/2019
|
|
|
|
|
|||||||||||||
10/22/2004
|
119,250
|
|
|
|
40.90
|
|
10/22/2019
|
|
|
|
|
|||||||||||||
10/1/2009
|
489,258
|
|
|
|
15.44
|
|
10/1/2019
|
|
|
|
|
|||||||||||||
8/13/2010
|
397,818
|
|
|
|
19.90
|
|
10/2/2018
|
(f)
|
|
|
|
|
||||||||||||
10/7/2010
|
240,000
|
|
|
|
|
11.06
|
|
10/7/2020
|
|
|
|
|
||||||||||||
10/7/2010
|
260,000
|
|
|
|
11.06
|
|
10/7/2020
|
|
|
|
|
|||||||||||||
10/6/2011
|
335,000
|
|
|
|
6.32
|
|
10/6/2021
|
|
|
|
|
|||||||||||||
10/6/2011
|
365,000
|
|
|
|
6.32
|
|
10/6/2021
|
|
|
|
|
|||||||||||||
10/10/2013
|
150,000
|
|
|
|
16.63
|
|
10/10/2023
|
|
|
|
|
|||||||||||||
10/9/2014
|
520,300
|
|
|
|
|
14.62
|
|
10/9/2024
|
|
|
|
|
||||||||||||
10/9/2014
|
|
|
|
|
|
352,120
|
|
$
|
11,042,483
|
|
|
|
|
|||||||||||
10/8/2015
|
222,000
|
|
111,000
|
|
|
14.92
|
|
10/8/2025
|
|
|
|
|
||||||||||||
10/8/2015
|
|
|
|
|
|
|
|
133,000
|
|
$
|
4,170,880
|
|
||||||||||||
10/6/2016
|
91,651
|
|
183,301
|
|
|
16.21
|
|
10/6/2026
|
|
|
|
|
||||||||||||
10/6/2016
|
|
|
|
|
|
|
|
148,057
|
|
4,643,068
|
|
|||||||||||||
10/5/2017
|
|
|
|
|
|
|
|
156,006
|
|
4,892,348
|
|
|||||||||||||
Mr. Kaminski
|
10/6/2011
|
125,000
|
|
|
|
|
6.32
|
|
10/6/2021
|
|
|
|
|
|||||||||||
10/10/2013
|
50,000
|
|
|
|
|
16.63
|
|
10/10/2023
|
|
|
|
|
||||||||||||
10/9/2014
|
108,396
|
|
|
|
|
14.62
|
|
10/9/2024
|
|
|
|
|
||||||||||||
10/9/2014
|
|
|
|
|
|
27,086
|
|
849,417
|
|
|
|
|
|
|||||||||||
10/8/2015
|
76,667
|
|
38,333
|
|
|
14.92
|
|
10/8/2025
|
|
|
|
|
||||||||||||
10/8/2015
|
|
|
|
|
|
8,000
|
|
250,880
|
|
14,000
|
|
439,040
|
|
|||||||||||
10/6/2016
|
27,496
|
|
54,990
|
|
|
16.21
|
|
10/6/2026
|
|
|
|
|
||||||||||||
10/6/2016
|
|
|
|
|
|
17,273
|
|
541,681
|
|
18,507
|
|
580,380
|
|
|||||||||||
10/5/2017
|
|
|
|
|
|
|
|
46,802
|
|
1,467,711
|
|
Name
|
Grant Date
|
Option Awards
|
Stock Awards
|
|||||||||||||||||||||
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
|
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)(a)
|
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number
of Shares
or Units
of Stock
That
Have
Not
Vested
(#)(b)
|
Market
Value of
Shares or
Units of
Stock
That
Have
Not
Vested
($)(c)
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested
(#)(d)
|
Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($)(d)
|
||||||||||||||||
Mr. Praw
|
10/10/2013
|
39,000
|
|
|
|
|
$
|
16.63
|
|
10/10/2023
|
|
|
|
|
||||||||||
10/9/2014
|
76,370
|
|
|
|
|
14.62
|
|
10/9/2024
|
|
|
|
|
||||||||||||
10/9/2014
|
|
|
|
|
|
19,084
|
|
$
|
598,474
|
|
|
|
|
|
||||||||||
10/8/2015
|
53,333
|
|
26,667
|
|
|
14.92
|
|
10/8/2025
|
|
|
|
|
||||||||||||
10/8/2015
|
|
|
|
|
|
6,000
|
|
188,160
|
|
10,000
|
|
$
|
313,600
|
|
||||||||||
10/6/2016
|
18,903
|
|
37,806
|
|
|
16.21
|
|
10/6/2026
|
|
|
|
|
||||||||||||
10/6/2016
|
|
|
|
|
|
11,875
|
|
372,400
|
|
12,724
|
|
399,025
|
|
|||||||||||
10/5/2017
|
|
|
|
|
|
|
|
32,176
|
|
1,009,039
|
|
|||||||||||||
Mr. Woram
|
7/15/2010
|
30,000
|
|
|
|
11.26
|
|
7/15/2020
|
|
|
|
|
|
|
||||||||||
10/7/2010
|
111,000
|
|
|
|
|
11.06
|
|
10/7/2020
|
|
|
|
|
||||||||||||
10/6/2011
|
110,000
|
|
|
|
|
6.32
|
|
10/6/2021
|
|
|
|
|
||||||||||||
10/10/2013
|
39,000
|
|
|
|
|
16.63
|
|
10/10/2023
|
|
|
|
|
||||||||||||
10/9/2014
|
76,370
|
|
|
|
|
14.62
|
|
10/9/2024
|
|
|
|
|
||||||||||||
10/9/2014
|
|
|
|
|
|
19,084
|
|
598,474
|
|
|
|
|
|
|||||||||||
10/8/2015
|
53,333
|
|
26,667
|
|
|
14.92
|
|
10/8/2025
|
|
|
|
|
||||||||||||
10/8/2015
|
|
|
|
|
|
6,000
|
|
188,160
|
|
10,000
|
|
313,600
|
|
|||||||||||
10/6/2016
|
17,758
|
|
35,514
|
|
|
16.21
|
|
10/6/2026
|
|
|
|
|
||||||||||||
10/6/2016
|
|
|
|
|
|
11,155
|
|
349,821
|
|
11,952
|
|
374,815
|
|
|||||||||||
10/5/2017
|
|
|
|
|
|
|
|
30,226
|
|
947,887
|
|
|||||||||||||
Mr. Hollinger
|
10/24/2003
|
9,334
|
|
|
|
33.24
|
|
(e)
|
10/24/2018
|
|
|
|
|
|||||||||||
10/24/2003
|
18,666
|
|
|
|
34.05
|
|
(e)
|
10/24/2018
|
|
|
|
|
||||||||||||
10/22/2004
|
24,000
|
|
|
|
40.90
|
|
10/22/2019
|
|
|
|
|
|||||||||||||
10/1/2009
|
68,147
|
|
|
|
15.44
|
|
10/1/2019
|
|
|
|
|
|||||||||||||
8/13/2010
|
79,564
|
|
|
|
19.90
|
|
10/2/2018
|
(f)
|
|
|
|
|
||||||||||||
10/7/2010
|
60,000
|
|
|
|
11.06
|
|
10/7/2020
|
|
|
|
|
|||||||||||||
10/6/2011
|
60,000
|
|
|
|
6.32
|
|
10/6/2021
|
|
|
|
|
|||||||||||||
10/10/2013
|
21,500
|
|
|
|
16.63
|
|
10/10/2023
|
|
|
|
|
|||||||||||||
10/9/2014
|
44,344
|
|
|
|
14.62
|
|
10/9/2024
|
|
|
|
|
|||||||||||||
10/9/2014
|
|
|
|
|
|
11,081
|
|
347,500
|
|
|
|
|
|
|||||||||||
10/8/2015
|
33,333
|
|
16,667
|
|
|
14.92
|
|
10/8/2025
|
|
|
|
|
||||||||||||
10/8/2015
|
|
|
|
|
|
3,333
|
|
104,523
|
|
6,000
|
|
188,160
|
|
|||||||||||
10/6/2016
|
10,884
|
|
21,767
|
|
|
16.21
|
|
10/6/2026
|
|
|
|
|
||||||||||||
10/6/2016
|
|
|
|
|
|
6,837
|
|
214,408
|
|
7,326
|
|
229,743
|
|
|||||||||||
10/5/2017
|
|
|
|
|
|
|
|
18,526
|
|
580,975
|
|
(a)
|
Number of Securities Underlying Unexercised Options-Unexercisable.
Stock option awards generally vest in equal installment amounts (
i.e.
, ratably) over a three-year period.
|
(b)
|
Number of Shares or Units of Stock That Have Not Vested
. Includes restricted stock grants and the shares of our common stock the Compensation Committee approved for grant on February 14, 2018 pursuant to the 2014 PSUs based on our performance through the performance period, as described under “2014 PSU Awards.” Upon the shares being approved for grant to the recipients, the earned 2014 PSU-related shares became fully vested, with no restrictions on transferability or otherwise. The 2015 and 2016 restricted stock awards vest in three equal annual installments, with the remaining vesting dates of October 25, 2018 and 2019, respectively, subject to the recipients being employed through each vesting date.
|
(c)
|
Market Value of Shares That Have Not Vested.
The market value shown is based on the closing price of our common stock on November 30, 2017, which was $31.36.
|
(d)
|
Equity Incentive Plan Awards: Number and Market Value of Unearned Units
. The awards shown are the PSUs granted to our NEOs in 2015, 2016 and 2017, reflecting target award amounts as of November 30, 2017 and the closing price of our common stock on November 30, 2017, which was $31.36. These PSUs will vest based on our achievement of certain performance measures over an applicable three-year performance period and subject to the recipients being employed through the date that the Compensation Committee determines the number of shares that were earned pursuant to the PSUs.
|
(e)
|
As a result of an internal review of our employee stock option grant practices in 2006, we adjusted the exercise prices of certain of our employee stock options in order to comply with Section 409A of the Code. The exercise price for a certain portion of the stock option grant made on October 24, 2003 was not adjusted.
|
(f)
|
Through participation in two exchange offers that we conducted in 2010, these common stock options replaced cash-settled stock appreciation right awards that had been previously granted to the NEO as long-term incentives. Each common stock option has an exercise price equal to the replaced award’s exercise price, and the same number of underlying shares, vesting schedule and expiration date as each replaced award. The exchange offers did not include a re-pricing or any other changes impacting the value of the awards to the NEO, no additional grants or awards were made to the NEO, and the issuance of the common stock options did not result in any incremental fair value to the NEO.
|
Name
|
Option Awards
|
Stock Awards
|
||||||||
Number
of Shares
Acquired
on Exercise
(#)
|
Value
Realized
on Exercise
($)(a)
|
Number
of Shares
Acquired
on Vesting
(#)(b)
|
Value
Realized
on Vesting
($)(c)
|
|||||||
Mr. Mezger
|
400,000
|
|
$
|
521,013
|
|
352,120
|
|
$
|
11,137,556
|
|
Mr. Kaminski
|
163,017
|
|
2,002,382
|
|
66,295
|
|
1,898,859
|
|
||
Mr. Praw
|
150,000
|
|
2,929,785
|
|
46,925
|
|
1,343,684
|
|
||
Mr. Woram
|
49,529
|
|
785,134
|
|
46,565
|
|
1,333,990
|
|
||
Mr. Hollinger
|
60,000
|
|
101,088
|
|
27,067
|
|
775,363
|
|
(a)
|
The value realized on exercise is the difference between the closing price of our common stock at exercise and the exercise price of each award.
|
(b)
|
The shares reported are the total number of shares each NEO acquired upon the following vesting events with respect to 2017:
|
Name
|
2014 PSUs
|
Restricted Stock
|
Restricted Stock
|
Restricted Stock
|
Total Shares
|
|||||||||||||
Granted on October 9, 2014
|
Vested on February 14, 2018
|
Granted on October 9, 2014
|
Vested on October 9, 2017
|
Granted on October 8, 2015
|
Vested on October 25, 2017
|
Granted on October 6, 2016
|
Vested on October 25, 2017
|
|||||||||||
Mr. Mezger
|
195,622
|
|
352,120
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
352,120
|
|
Mr. Kaminski
|
15,048
|
|
27,086
|
|
22,572
|
|
22,572
|
|
24,000
|
|
8,000
|
|
25,910
|
|
8,637
|
|
66,295
|
|
Mr. Praw
|
10,602
|
|
19,084
|
|
15,903
|
|
15,903
|
|
18,000
|
|
6,000
|
|
17,813
|
|
5,938
|
|
46,925
|
|
Mr. Woram
|
10,602
|
|
19,084
|
|
15,903
|
|
15,903
|
|
18,000
|
|
6,000
|
|
16,733
|
|
5,578
|
|
46,565
|
|
Mr. Hollinger
|
6,156
|
|
11,081
|
|
9,234
|
|
9,234
|
|
10,000
|
|
3,333
|
|
10,256
|
|
3,419
|
|
27,067
|
|
(c)
|
The amount shown is the total gross dollar value realized upon the vesting of the restricted stock and PSUs, based on the closing price of our common stock on the vesting date, and the applicable Dividend Equivalents paid on the earned PSUs.
|
Name*
|
Plan Name
|
Number
of Years
Credited
Service
(#)(a)
|
Present
Value of
Accumulated
Benefit
($)(b)
|
Payments
During
Last Fiscal
Year
($)
|
||||
Mr. Mezger
|
Retirement Plan
|
24
|
$
|
10,590,859
|
|
$
|
—
|
|
Mr. Hollinger
|
Retirement Plan
|
30
|
2,353,524
|
|
—
|
|
(a)
|
Number of Years of Credited Service.
This is as of the valuation date. As of November 30, 2017, Mr. Mezger and Mr. Hollinger are fully vested in their respective Retirement Plan benefit.
|
(b)
|
Present Value of Accumulated Benefit.
This amount represents the actuarial present value of the total retirement benefit that would be payable to Mr. Mezger and Mr. Hollinger under the Retirement Plan as of November 30, 2017. The payment of Retirement Plan benefits is described under “Retirement Programs.” The following key actuarial assumptions and methodologies were used to calculate this
|
*
|
Messrs. Kaminski, Praw and Woram are not participants in the Retirement Plan, as the plan was open for a limited period of time and closed to new participants in 2004.
|
Name
|
Executive
Contributions
in Last
Fiscal Year
($)(a)
|
Registrant
Contributions
in Last
Fiscal Year
($)(b)
|
Aggregate
Earnings
in Last
Fiscal Year
($)(c)
|
Aggregate
Withdrawals/
Distributions
($)
|
Aggregate
Balance
at Last
Fiscal Year End
($)(d)
|
||||||||||
Mr. Mezger
|
$
|
42,500
|
|
$
|
42,500
|
|
$
|
315,303
|
|
$
|
—
|
|
$
|
2,115,094
|
|
Mr. Kaminski
|
41,300
|
|
25,100
|
|
51,602
|
|
—
|
|
404,214
|
|
|||||
Mr. Praw
|
35,392
|
|
18,200
|
|
42,155
|
|
—
|
|
276,017
|
|
|||||
Mr. Woram
|
34,575
|
|
18,375
|
|
64,081
|
|
—
|
|
456,096
|
|
|||||
Mr. Hollinger
|
41,000
|
|
13,463
|
|
96,402
|
|
—
|
|
2,028,441
|
|
(a)
|
Executive Contributions in Last Fiscal Year.
These amounts reflect compensation the NEOs earned in 2017 that they have voluntarily deferred and are included in the Summary Compensation Table.
|
(b)
|
Registrant Contributions in Last Fiscal Year.
These amounts are matching contributions we made to the NEOs’ voluntary contributions to our DCP and are included in the Summary Compensation Table. The DCP is discussed under “Retirement Programs.”
|
(c)
|
Aggregate Earnings in Last Fiscal Year.
These amounts do not include any above-market or preferential earnings. Accordingly, these amounts are not reported in the Summary Compensation Table.
|
(d)
|
Aggregate Balance at Last Fiscal Year End.
These amounts reflect compensation the NEOs earned in 2017 or in prior years, but which they voluntarily elected to defer receipt, adjusted for changes in the value of their investments and distributions, if any. All of the NEOs are fully vested in their respective balances. A portion of these amounts was previously reported as deferred compensation in the Summary Compensation Tables in our proxy statements for our 2015 and 2016 Annual Meetings of Stockholders.
|
Post-Employment Payments — Mr. Mezger
|
|
|||||||||||||||||||||||||||
Executive Payments and Benefits upon Termination or Change in Control
|
Voluntary
Termination
|
Involuntary
Termination
for Cause
|
Involuntary
Termination
Without Cause/
Termination
for Good
Reason
|
Change in
Control Without
Termination
|
Change in Control
With Termination
for Good Reason
or Without Cause
|
Death
|
Disability
|
|||||||||||||||||||||
Severance
|
$
|
—
|
|
$
|
—
|
|
$
|
8,764,761
|
|
$
|
—
|
|
$
|
14,509,045
|
|
$
|
—
|
|
$
|
—
|
|
|||||||
Long-term Incentives (a)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Stock Options
|
4,601,850
|
|
—
|
|
4,601,850
|
|
4,601,850
|
|
4,601,850
|
|
4,601,850
|
|
4,601,850
|
|
||||||||||||||
PSUs
|
15,542,295
|
|
—
|
|
20,019,289
|
|
20,019,289
|
|
20,019,289
|
|
25,024,980
|
|
25,024,980
|
|
||||||||||||||
Death Benefit Only Plan (b)
|
—
|
|
—
|
|
—
|
|
1,177,849
|
|
1,177,849
|
|
1,909,607
|
|
—
|
|
||||||||||||||
Health Benefits (c)
|
—
|
|
—
|
|
73,050
|
|
—
|
|
73,050
|
|
—
|
|
—
|
|
||||||||||||||
Credited Vacation (d)
|
88,462
|
|
88,462
|
|
88,462
|
|
—
|
|
88,462
|
|
88,462
|
|
88,462
|
|
||||||||||||||
Excise Tax Restoration (e)
|
—
|
|
—
|
|
—
|
|
—
|
|
9,609,615
|
|
—
|
|
—
|
|
||||||||||||||
Total
|
$
|
20,232,607
|
|
$
|
88,462
|
|
$
|
33,547,412
|
|
$
|
25,798,988
|
|
$
|
50,079,160
|
|
$
|
31,624,899
|
|
$
|
29,715,292
|
|
(a)
|
Assumes for the applicable scenarios that Mr. Mezger’s 2014 PSUs pay out at 180% of the target value and that all other outstanding grants pay out at 100% of the target values. Except for the death and disability scenarios, assumes that (i) Mr. Mezger’s 2017 PSUs would have no value as the performance period would not have started by November 30, 2017; and (ii) Mr. Mezger’s termination would be considered a retirement under the applicable award agreements. Therefore, his stock options would become immediately exercisable, and in the voluntary termination scenario Mr. Mezger would receive full payout of his 2014 PSUs (at 180% of target), a prorated portion (two-thirds) of his 2015 PSUs and (one-third) of his 2016 PSUs based on his months of service through November 30, 2017 and our actual performance through the end of the respective performance periods.
|
(b)
|
Mr. Mezger’s designated beneficiaries would be entitled to receive an estimated death benefit of $1,909,607 ($1,000,000 benefit plus an income tax restoration payment of $909,607) upon his death. The present value of the benefit as of November 30, 2017 is approximately $779,035 based on a 3.81% discount factor and the RP-2014 Top Quartile Employee and Healthy Annuitant Table (M/F), with the MP-2016 generational projection scales for life expectancy (consistent with mortality tables and rates used for Accounting Standards Codification Topic No. 715, “Compensation — Retirement Benefits” (“ASC 715”) valuations). For the change in control scenarios, the amounts shown are estimated based on the cash surrender value of the underlying life insurance policy as of November 30, 2017 of $575,130, and an estimated income- and payroll-related tax restoration payment of $602,719.
|
(c)
|
Assumes we make 24 months of contributions for health benefits using current COBRA rates of approximately $3,044 per month.
|
(d)
|
Assumes payout of 160 hours of vacation benefits as Mr. Mezger is credited with this number of vacation hours during his employment with us, regardless of actual vacation time taken.
|
(e)
|
Based on Mr. Mezger’s five-year historical average compensation, Mr. Mezger is assumed under this scenario to be entitled to a hypothetical excise tax restoration payment under his Employment Agreement. Whether or not Mr. Mezger will be assumed to be entitled to such a payment will depend on his then-five-year average compensation, his future compensation and other factors. Under his Employment Agreement, we will provide Mr. Mezger with such a tax restoration payment to compensate him for any excise taxes under Section 280G on payments due in connection with a change in control. For purposes of calculating the amounts shown, the following major assumptions are used: (i) stock options paid out based on a value of $31.36 less applicable exercise prices, and other equity awards valued with a fair market value of $31.36; (ii) accelerated payment of Retirement Plan and Death Benefit Only Plan benefits, a bonus specified in his Employment Agreement that is payable in lieu of a 2017 fiscal year annual incentive, and his 2014 PSUs, in each case valued using Treas. Reg. Section 1.280G-1 Q&A 24(b); and (iii) prorated portions (two-thirds) of his 2015 PSUs and (one-third) of his 2016 PSUs considered reasonable compensation for services performed prior to the change in control.
|
Post-Employment Payments — Mr. Kaminski
|
||||||||||||||||||||||||||
Executive Payments and Benefits upon Termination
or Change in Control
|
Voluntary
Termination
|
Involuntary
Termination
for Cause
|
Involuntary
Termination
Without Cause/
Termination
for Good
Reason
|
Change in Control
Without
Termination
|
Change in Control
With Termination
for Good Reason
or Without Cause
|
Death
|
Disability
|
|||||||||||||||||||
Severance
|
$
|
—
|
|
$
|
—
|
|
$
|
3,350,528
|
|
$
|
—
|
|
$
|
3,249,417
|
|
$
|
—
|
|
$
|
—
|
|
|||||
Long-term Incentives (a)
|
|
|
|
|
|
|
|
|||||||||||||||||||
Stock Options
|
—
|
|
—
|
|
—
|
|
1,463,293
|
|
1,463,293
|
|
1,463,293
|
|
1,463,293
|
|
||||||||||||
Restricted Stock
|
—
|
|
—
|
|
—
|
|
792,561
|
|
792,561
|
|
792,561
|
|
792,561
|
|
||||||||||||
PSUs
|
—
|
|
—
|
|
—
|
|
1,883,115
|
|
1,883,115
|
|
3,373,798
|
|
3,373,798
|
|
||||||||||||
Health Benefits (b)
|
—
|
|
—
|
|
67,423
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||||
Total
|
$
|
—
|
|
$
|
—
|
|
$
|
3,417,951
|
|
$
|
4,138,969
|
|
$
|
7,388,386
|
|
$
|
5,629,652
|
|
$
|
5,629,652
|
|
(a)
|
Assumes for the applicable scenarios that Mr. Kaminski’s 2014 PSUs pay out at 180% of the target value and that all other outstanding grants pay out at 100% of the target values. Except for the death and disability scenarios, assumes that Mr. Kaminski’s 2017 PSUs would have no value as the performance period would not have started by November 30, 2017.
|
(b)
|
Assumes we make 24 months of contributions for health benefits of approximately $2,809 per month.
|
Post-Employment Payments — Mr. Praw
|
||||||||||||||||||||||||||||
Executive Payments and Benefits upon Termination or Change in Control
|
Voluntary
Termination
|
Involuntary
Termination
for Cause
|
Involuntary
Termination
Without
Cause/
Termination
for Good
Reason
|
Change in Control
Without
Termination
|
Change in
Control With
Termination
for Good
Reason or
Without Cause
|
Death
|
Disability
|
|||||||||||||||||||||
Severance
|
$
|
—
|
|
$
|
—
|
|
$
|
2,822,697
|
|
$
|
—
|
|
$
|
2,737,141
|
|
$
|
—
|
|
$
|
—
|
|
|||||||
Long-term Incentives (a)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Stock Options
|
1,011,166
|
|
—
|
|
1,011,166
|
|
1,011,166
|
|
1,011,166
|
|
1,011,166
|
|
1,011,166
|
|
||||||||||||||
Restricted Stock
|
—
|
|
—
|
|
—
|
|
560,560
|
|
560,560
|
|
560,560
|
|
560,560
|
|
||||||||||||||
PSUs
|
951,034
|
|
—
|
|
951,034
|
|
1,321,129
|
|
1,321,129
|
|
2,346,020
|
|
2,346,020
|
|
||||||||||||||
Death Benefit Only Plan (b)
|
—
|
|
—
|
|
—
|
|
1,404,405
|
|
1,404,405
|
|
1,909,607
|
|
—
|
|
||||||||||||||
Health Benefits (c)
|
—
|
|
—
|
|
55,867
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||||||
Total
|
$
|
1,962,200
|
|
$
|
—
|
|
$
|
4,840,764
|
|
$
|
4,297,260
|
|
$
|
7,034,401
|
|
$
|
5,827,353
|
|
$
|
3,917,746
|
|
(a)
|
Assumes for the applicable scenarios that Mr. Praw’s 2014 PSUs pay out at 180% of the target value and that all other outstanding grants pay out at 100% of the target values. Except for the death and disability scenarios, assumes that (i) Mr. Praw’s 2017 PSUs would have no value as the performance period would not have started by November 30, 2017; and (ii) Mr. Praw’s termination would be considered a retirement under the applicable award agreements. Therefore, his stock options would become immediately exercisable, and in the voluntary termination scenario Mr. Praw would receive full payout of his 2014 PSUs (at 180% of target), a prorated portion (two-thirds) of his 2015 PSUs and (one-third) of his 2016 PSUs based on his months of service through November 30, 2016 and our actual performance through the end of the respective performance periods.
|
(b)
|
Mr. Praw’s designated beneficiaries would be entitled to receive an estimated death benefit of $1,909,607 ($1,000,000 benefit plus an income tax restoration payment of $909,607) upon his death. The present value of the benefit as of November 30, 2017 is approximately $976,690 based on a 3.81% discount factor and the RP-2014 Top Quartile Employee and Healthy Annuitant Table (M/F), with the MP-2016 generational projection scale tables for life expectancy (consistent with mortality tables and rates used for ASC 715 valuations). For the change in control scenarios, the amounts shown are estimated based on the cash surrender value of the underlying life insurance policy as of November 30, 2017 of $685,754 and an estimated income and payroll-related tax restoration payment of $663,673 associated with the distribution of the policies, valued using Treas. Reg. Section 1.280G-1 Q&A 24(b).
|
(c)
|
Assumes we make 24 months of contributions for health benefits of approximately $2,328 per month.
|
Post-Employment Payments — Mr. Woram
|
||||||||||||||||||||||||||
Executive Payments and Benefits upon Termination
or Change in Control
|
Voluntary
Termination
|
Involuntary
Termination
for Cause
|
Involuntary
Termination
Without Cause/
Termination
for Good
Reason
|
Change in Control
Without
Termination
|
Change in
Control With
Termination
for Good
Reason or
Without Cause
|
Death
|
Disability
|
|||||||||||||||||||
Severance
|
$
|
—
|
|
$
|
—
|
|
$
|
2,803,429
|
|
$
|
—
|
|
$
|
2,741,762
|
|
$
|
—
|
|
$
|
—
|
|
|||||
Long-term Incentives (a)
|
|
|
|
|
|
|
|
|||||||||||||||||||
Stock Options
|
—
|
|
—
|
|
—
|
|
976,443
|
|
976,443
|
|
976,443
|
|
976,443
|
|
||||||||||||
Restricted Stock
|
—
|
|
—
|
|
—
|
|
537,981
|
|
537,981
|
|
537,981
|
|
537,981
|
|
||||||||||||
PSUs
|
—
|
|
—
|
|
—
|
|
1,296,823
|
|
1,296,823
|
|
2,259,705
|
|
2,259,705
|
|
||||||||||||
Health Benefits (b)
|
—
|
|
—
|
|
67,416
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||||
Total
|
$
|
—
|
|
$
|
—
|
|
$
|
2,870,845
|
|
$
|
2,811,247
|
|
$
|
5,553,009
|
|
$
|
3,774,129
|
|
$
|
3,774,129
|
|
(a)
|
Assumes for the applicable scenarios that Mr. Woram’s 2014 PSUs pay out at 180% of the target value and that all other outstanding grants pay out at 100% of the target values. Except for the death and disability scenarios, assumes that Mr. Woram’s 2017 PSUs would have no value as the performance period would not have started by November 30, 2017.
|
(b)
|
Assumes we make 24 months of contributions for health benefits of approximately $2,809 per month.
|
Post-Employment Payments — Mr. Hollinger
|
||||||||||||||||||||||||||
Executive Payments and
Benefits upon Termination or Change in Control
|
Voluntary
Termination
|
Involuntary
Termination
for Cause
|
Involuntary
Termination
Without Cause/
Termination
for Good
Reason
|
Change in Control
Without
Termination
|
Change in
Control With
Termination
for Good
Reason or
Without Cause(d)
|
Death
|
Disability
|
|||||||||||||||||||
Severance
|
$
|
—
|
|
$
|
—
|
|
$
|
1,380,778
|
|
$
|
—
|
|
$
|
1,789,981
|
|
$
|
—
|
|
$
|
—
|
|
|||||
Long-term Incentives (a)
|
|
|
|
|
|
—
|
|
|
||||||||||||||||||
Stock Options
|
603,776
|
|
—
|
|
603,776
|
|
603,776
|
|
603,776
|
|
603,776
|
|
603,776
|
|
||||||||||||
Restricted Stock
|
—
|
|
—
|
|
—
|
|
318,931
|
|
318,931
|
|
318,931
|
|
318,931
|
|
||||||||||||
PSUs
|
555,648
|
|
—
|
|
555,648
|
|
771,264
|
|
771,264
|
|
1,361,399
|
|
1,361,399
|
|
||||||||||||
Performance Cash
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||||
Death Benefit Only Plan (b)
|
—
|
|
—
|
|
—
|
|
1,117,159
|
|
1,117,159
|
|
1,909,607
|
|
—
|
|
||||||||||||
Health Benefits (c)
|
—
|
|
—
|
|
25,717
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||||
Total
|
$
|
1,159,424
|
|
$
|
—
|
|
$
|
2,565,919
|
|
$
|
2,811,130
|
|
$
|
4,601,111
|
|
$
|
4,193,713
|
|
$
|
2,284,106
|
|
(a)
|
Assumes for the applicable scenarios that Mr. Hollinger’s 2014 PSUs pay out at 180% of the target value and that all other outstanding grants pay out at 100% of the target values. Except for the death and disability scenarios, assumes that (i) Mr. Hollinger’s 2017 PSUs would have no value as the performance period would not have started by November 30, 2017; and (ii) Mr. Hollinger’s termination would be considered a retirement under the applicable award agreements. Therefore, his stock options would become immediately exercisable, and in the voluntary termination scenario Mr. Hollinger would receive full payout of his 2014 PSUs (at 180% of target), a prorated portion (two-thirds) of his 2015 PSUs and (one-third) of his 2016 PSUs based on his months of service through November 30, 2016 and our actual performance through the end of the respective performance periods.
|
(b)
|
Mr. Hollinger’s designated beneficiaries would be entitled to receive an estimated death benefit of $1,909,607 ($1,000,000 benefit plus an income tax restoration payment of $909,607) upon his death. The present value of the benefit as of November 30, 2017 is approximately $707,308 based on a 3.81% discount factor and the RP-2014 Top Quartile Employee and Healthy Annuitant Table (M/F), with the MP-2016 generational projection scale tables for life expectancy (consistent with mortality tables and rates used for ASC 715 valuations). For the change in control scenarios, the amounts shown are estimated based on the cash surrender value of the underlying life insurance policy as of November 30, 2017 of $571,664 and an estimated income and payroll-related tax restoration payment of $663,673 associated with the distribution of the policies, valued using Treas. Reg. Section 1.280G-1 Q&A 24(b).
|
(c)
|
Assumes we make 18 months of contributions for health benefits of approximately $1,429 per month.
|
(d)
|
We determined that we would not need to pay any excise tax restoration payment to Mr. Hollinger if we experienced a change in control for the purposes of Change in Control Plan.
|
|
ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
|
Pursuant to Section 14A of the Securities Exchange Act of 1934, we are seeking an advisory vote from our stockholders on the following resolution to approve our NEOs’ 2017 fiscal year compensation:
RESOLVED, that the stockholders of KB Home approve, on an advisory basis, the compensation paid to its named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and the related narrative discussion set forth in this Proxy Statement.
|
Voting Standard
This non-binding advisory resolution will be considered approved based upon the affirmative vote of a majority of the shares of our common stock present or represented, and entitled to vote thereon, at the Annual Meeting.
|
|
APPROVE THE AMENDED AND RESTATED RIGHTS AGREEMENT
|
We have significant deferred tax assets comprised primarily of net operating loss carryforwards (“NOLs”), built-in losses, temporary book-to-tax differences and tax credits. Under applicable law, we can use our NOLs and tax credits to offset our future income tax liability. However, this benefit could be significantly impaired if we experience an “ownership change,” as discussed below. To help protect against an “ownership change,” our stockholders approved our Rights Agreement at our 2009 Annual Meeting, with a term expiring on March 5, 2019. Because we expect to have substantial deferred tax assets beyond March 5, 2019, which is before the likely April date of our 2019 Annual Meeting, the Board approved, subject to stockholder approval, an Amended and Restated Rights Agreement to replace our current Rights Agreement (with similar terms) effective as of this Annual Meeting and continuing until April 30, 2021. Therefore, we are seeking stockholder approval of the Amended and Restated Rights Agreement.
|
Voting Standard
The Amended and Restated Rights Agreement will be considered approved based upon the affirmative vote of a majority of the shares of our common stock present or represented, and entitled to vote thereon, at the Annual Meeting.
|
•
|
Cumulative voting is not permitted in the election of directors
|
•
|
Stockholders may not call or request special meetings of stockholders
|
•
|
Stockholders may not take action by written consent in lieu of a meeting of stockholders
|
•
|
Stockholders have no preemptive right to acquire our securities;
|
•
|
The Board may fix the designation, rights, preferences and limitations of the shares of each series of our preferred stock
|
|
AUDIT MATTERS
|
Based on its evaluation of Ernst & Young LLP’s performance during our 2017 fiscal year, as well as the firm’s proposed fees (on an absolute basis and relative to the fees incurred by our homebuilder peers), qualifications, and the audit efficiencies that reflect its 27 years of service as our Independent Auditor (and the associated costs of changing firms), the Audit Committee has appointed Ernst & Young LLP as our independent registered public accounting firm to audit our consolidated financial statements for our fiscal year ending November 30, 2018. The Audit Committee believes this appointment is in our and our stockholders’ best interests.
We are seeking stockholder ratification of this appointment.
|
Voting Standard
The Audit Committee’s appointment of Ernst & Young LLP will be considered ratified based upon the affirmative vote of a majority of the shares of our common stock present or represented, and entitled to vote thereon, at the Annual Meeting.
|
|
Fiscal Year Ended ($000s)
|
|
In 2017 and 2016, audit fees included an annual consolidated financial statement audit, audits of our financial services subsidiary and audit services performed for compliance with Section 404 of the Sarbanes-Oxley Act of 2002. Audit-related fees in both years included 401(k) Plan audits and accounting consultations.
|
|||||
2017
|
2016
|
|||||||
Audit Fees
|
$
|
1,102
|
|
$
|
1,134
|
|
||
Audit-Related Fees
|
44
|
|
42
|
|
||||
Tax Fees
|
—
|
|
—
|
|
||||
All Other Fees
|
—
|
|
—
|
|
||||
Total Fees
|
$
|
1,146
|
|
$
|
1,176
|
|
|
|
|
AUDIT COMMITTEE REPORT
|
||
|
|
|
The Audit Committee acts under a written charter. Under its charter, the Audit Committee assists the Board in fulfilling the Board’s oversight responsibilities relating to, among other things, KB Home’s corporate accounting and reporting practices, including the quality and integrity of its financial statements and reports, and its internal control over financial reporting and disclosure controls and procedures. All Audit Committee members are independent.
In carrying out its role, the Audit Committee, among other activities:
• conducts at each regular meeting separate executive sessions with KB Home’s chief financial officer; chief accounting officer; chief legal officer; internal audit department head; and Independent Auditor, Ernst & Young LLP, to discuss matters relevant to their respective duties and roles.
• annually reviews and approves the internal audit department’s audit plan, and receives quarterly updates on its performance and results.
• oversees management’s performance of an annual enterprise risk management assessment, and discusses with management identified significant risks in KB Home’s business and operations, along with corresponding mitigating factors, and receives periodic updates upon request or as deemed appropriate.
• reviews and discusses with management KB Home’s quarterly and annual periodic reports before they are filed with the Securities and Exchange Commission.
• receives and discusses quarterly management reports on the structure and testing of KB Home’s system of internal control over financial reporting, and management’s assessment of the system’s effectiveness.
• receives and discusses regular reports from the chief legal officer and senior compliance executives on material legal, compliance and ethics matters, and from Ernst & Young LLP on the results of its audit and internal control evaluation activities.
Management is primarily responsible for KB Home’s financial statements, the financial reporting process and assurance for the adequacy of internal control over financial reporting. Ernst & Young LLP, as KB Home’s Independent Auditor, is responsible for performing an independent audit of KB Home’s financial statements and internal control over financial reporting. Ernst & Young LLP is also responsible for expressing an opinion on the conformity of KB Home’s audited financial statements to generally accepted accounting principles used in the United States and the adequacy of KB Home’s internal control over financial reporting.
|
|
Per its charter, the Audit Committee is responsible for the appointment (with consideration given to ratification by our stockholders), compensation, engagement terms (including fees), retention (or termination, if appropriate) and oversight of the work of the Independent Auditor, which reports directly to the Audit Committee. The Audit Committee also:
• evaluates the Independent Auditor’s qualifications, independence and effectiveness, and presents its evaluation to the Board, which it did in January 2018. From this evaluation, which is discussed under “Ratify Appointment of Independent Auditor,” the Audit Committee appointed Ernst & Young LLP as KB Home’s independent registered public accounting firm for the fiscal year ending November 30, 2018.
• reviews and discusses with the Independent Auditor the scope and plan of its independent audit of KB Home’s financial statements and internal control over financial reporting.
• receives direct reports from the Independent Auditor describing, among other things, the applicable critical accounting policies and practices in the firm’s audit.
• approved in 2015 the appointment of the current lead audit partner for Ernst & Young LLP.
In this context, the Audit Committee has reviewed and discussed with management and Ernst & Young LLP KB Home’s audited financial statements. The Audit Committee has discussed with Ernst & Young LLP the matters required to be discussed in accordance with the Public Company Accounting Oversight Board’s standards.
In addition, the Audit Committee has received the written disclosures and letter from Ernst & Young LLP required by the Public Company Accounting Oversight Board concerning its independence, and has discussed with Ernst & Young LLP its independence from KB Home and KB Home’s management.
In reliance on the reviews, reports, activities and discussions referred to above, the Audit Committee recommended to the Board, and the Board approved, that the audited financial statements be included in KB Home’s Annual Report on Form 10-K for the fiscal year ended November 30, 2017, for filing with the Securities and Exchange Commission.
This report is respectfully submitted by the Audit Committee:
Melissa Lora, Chair
Dorene C. Dominguez
Dr. Stuart A. Gabriel
Dr. Thomas W. Gilligan
James C. Weaver
Michael M. Wood
|
|
ANNUAL MEETING, VOTING AND OTHER INFORMATION
|
|
Holders of Record
|
Beneficial Holders
|
Plan Participant Holders
|
How to Vote
|
If your shares are registered directly in your name with our transfer agent, Computershare Inc., you may vote via the Internet, telephone or mail following the instructions on the mailed or electronic proxy form you receive from Computershare.
|
If your shares are held in “street name” by a broker or other holder of record, you may vote via the Internet, telephone or mail following the instructions on the mailed or electronic voting instruction form you receive from such holder of record.
|
If you have shares in the KB Home Stock Fund in the 401(k) Plan or the GSOT, you may vote via the Internet, telephone or mail following the instructions on the mailed or electronic proxy form you receive from Computershare.
|
Voting Deadline
|
You may vote via the Internet and telephone until 11:59 p.m., Eastern Time, on April 11, 2018.
|
Your broker or other holder of record sets the applicable proxy voting deadlines.
|
You may vote via the Internet and telephone until 11:59 p.m., Eastern Time, on April 10, 2018.
|
Voting in Person
|
You (or someone designated by a signed legal proxy) may vote in person at the Annual Meeting.
|
You must obtain a legal proxy from your broker or other holder of record and present it with your ballot.
|
You must obtain a legal proxy from the applicable plan trustee and present it with your ballot.
|
Changing Your Vote
|
You may revoke voting instructions before polls close by submitting a later vote in person, or via the Internet, telephone or mail before the above-listed deadline.
|
You must contact your broker or other holder of record to revoke any prior voting instructions.
|
You may revoke voting instructions before polls close by submitting a later vote in person, or via the Internet, telephone or mail before the above-listed deadline.
|
Voting Standards
|
The applicable voting standard for each item of business at the Annual Meeting is described on the first page on which the item is discussed in this Proxy Statement. Any other item of business properly presented at the Annual Meeting will be considered approved based upon the affirmative vote of a majority of the shares of our common stock present or represented, and entitled to vote thereon, at the Annual Meeting. Shares that are not present or represented at the Annual Meeting, broker non-votes and abstentions will not affect the outcome of the election of directors. While shares that are not present or represented at the Annual Meeting and broker non-votes will not affect the outcomes for any other items of business at the Annual Meeting, abstentions will have the effect of an “against” vote on such items.
|
Holders of Record
|
|
|
Beneficial Holders
|
A copy of a proxy/voting instruction form or Notice of Internet Availability showing your name and address. If you are appointing an authorized proxy representative, also include the representative’s name, mailing address and contact telephone number and a copy of the signed legal proxy.
|
|
|
A copy of a voting instruction form from a broker or other holder of record showing your name and address, or a broker letter verifying record date ownership and a copy of a brokerage account statement showing your KB Home stock ownership on the record date.
|
|
For the Fiscal Year Ended November 30, 2017
|
||
Total pretax income
|
$
|
289,995
|
|
Incentive and variable compensation expense
|
47,165
|
|
|
Inventory impairment and land option contract abandonment charges related to land purchased or optioned prior to January 1, 2008
|
19,082
|
|
|
Adjusted Pretax Income
|
$
|
356,242
|
|
|
|
For the Fiscal Years Ended November 30,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Total pretax income
|
|
$
|
289,995
|
|
|
$
|
149,315
|
|
|
$
|
127,043
|
|
Income tax expense
|
|
(109,400
|
)
|
|
(43,700
|
)
|
|
(42,400
|
)
|
|||
Net income
|
|
$
|
180,595
|
|
|
$
|
105,615
|
|
|
$
|
84,643
|
|
|
|
|
|
|
|
|
||||||
Diluted earnings per share
|
|
$
|
1.85
|
|
|
$
|
1.12
|
|
|
$
|
.85
|
|
|
|
|
|
|
|
|
||||||
Diluted average shares outstanding
|
|
98,316
|
|
|
96,278
|
|
|
102,857
|
|
|||
|
|
|
|
|
|
|
||||||
Total pretax income
|
|
$
|
289,995
|
|
|
$
|
149,315
|
|
|
$
|
127,043
|
|
Add: inventory impairment and land option contract abandonment charges
|
|
25,232
|
|
|
52,812
|
|
|
9,591
|
|
|||
Add: variable compensation expense (income)
|
|
84
|
|
|
36
|
|
|
(315
|
)
|
|||
Adjusted total pretax income
|
|
315,311
|
|
|
202,163
|
|
|
136,319
|
|
|||
Adjusted tax effect
|
|
(118,900
|
)
|
|
(59,200
|
)
|
|
(45,500
|
)
|
|||
Adjusted Net Income
|
|
$
|
196,411
|
|
|
$
|
142,963
|
|
|
$
|
90,819
|
|
|
|
|
|
|
|
|
||||||
Adjusted Earnings Per Share
|
|
$
|
2.01
|
|
|
$
|
1.51
|
|
|
$
|
.91
|
|
|
|
|
|
|
|
|
||||||
Diluted average shares outstanding
|
|
98,316
|
|
|
96,278
|
|
|
102,857
|
|
|||
|
|
|
|
|
|
|
TABLE OF CONTENTS
|
1.
|
Certain Definitions
|
2.
|
Appointment of Rights Agent
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3.
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Issue of Right Certificates
|
4.
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Form of Right Certificates
|
5.
|
Countersignature and Registration
|
6.
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Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates
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7.
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Exercise of Rights; Purchase Price; Expiration Date of Rights
|
8.
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Cancellation and Destruction of Right Certificates
|
9.
|
Company Covenants Concerning Securities and Rights
|
10.
|
Record Date
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11.
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Adjustment of Purchase Price, Number and Kind of Securities or Number of Rights
|
12.
|
Certificate of Adjusted Purchase Price or Number of Securities
|
13.
|
Consolidation, Merger or Sale or Transfer of Assets or Earning Power
|
14.
|
Fractional Rights and Fractional Securities
|
15.
|
Rights of Action
|
16.
|
Agreement of Rights Holders
|
17.
|
Right Certificate Holder Not Deemed a Stockholder
|
18.
|
Concerning the Rights Agent
|
19.
|
Merger or Consolidation or Change of Name of Rights Agent
|
20.
|
Duties of Rights Agent
|
21.
|
Change of Rights Agent
|
22.
|
Issuance of New Right Certificates
|
23.
|
Redemption
|
24.
|
Exchange
|
25.
|
Notice of Certain Events
|
26.
|
Notices
|
27.
|
Supplements and Amendments
|
28.
|
Successors; Certain Covenants
|
29.
|
Benefits of This Agreement
|
30.
|
Governing Law
|
31.
|
Severability
|
32.
|
Descriptive Headings, Etc.
|
33.
|
Determinations and Actions by the Board
|
34.
|
Effective Time
|
35.
|
Force Majeure
|
36.
|
Counterparts
|
|
KB HOME
By:
Name: Brian J. Woram
Title: Executive Vice President and
General Counsel
|
|
|
|
COMPUTERSHARE INC.
By:
Name: Dennis Moccia
Title: Manager, Contract Administration
|
ATTEST:
|
KB HOME
By:
Name:
Title:
|
|
|
Countersigned:
COMPUTERSHARE INC.
By:
Authorized Signature
|
|
|
Signature
|
Signature Guaranteed: _____________________________
|
|
Signature
|
|
Signature
|
Signature Guaranteed: _____________________________
|
|
Signature
|
•
|
10 days after a
public announcement by KB Home that a person or group has become an acquiring person; and
|
•
|
10 business days (or a later date determined by our Board) after a person or group begins a tender or exchange offer that, if completed, would result in that person or group becoming an acquiring person.
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
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DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
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No information found
No Customers Found
Price
Yield
Owner | Position | Direct Shares | Indirect Shares |
---|