(e) Fiscal Year 2009 Long-Term Incentive Awards

On October 2, 2008, the Management Development and Compensation Committee of KB Home's Board of Directors (the "Committee") granted long-term incentive awards for fiscal year 2009 to the named executive officers identified below and certain other senior executives. The grants to the named executive officers identified below consisted of cash-settled phantom shares and cash-settled stock appreciation rights ("SARs").
The phantom shares and SARs granted on October 2, 2008 are purely cash-settled, and do not entitle recipients to receive any shares of the Company's common stock. The descriptions set forth below of the phantom shares and SARs granted on October 2, 2008 are qualified by reference to the forms of award agreements, which are attached as exhibits to this Current Report on Form 8-K.
Phantom Shares. Each phantom share entitles a recipient to a cash payment equal to the fair market value of one share of the Company's common stock on the date it vests, plus the cumulative value of all cash dividends paid in respect of one share of the Company's common stock from and including the grant date through and including the vesting date. Each phantom share granted on October 2, 2008 vests on October 3, 2011.
Stock Appreciation Rights. Each SAR, once vested, entitles a recipient to receive a cash payment equal to the spread between its grant price and the fair market value of one share of the Company's common stock on the date of exercise. The grant price for the SARs granted on October 2, 2008 is $19.90. Each SAR granted on October 2, 2008 has a ten-year term from the date of grant and vests in equal annual installments over a three-year period.
The Company's named executive officers who were granted fiscal year 2009 long-term incentive awards received SARs and phantom shares in the following amounts:

                        Officer           SARs     Phantom Shares
                  Jeffrey T. Mezger      397,818       43,970
                  William R. Hollinger   79,564        8,794
                  Kelly Masuda           51,148        5,654