Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
(e) Fiscal Year 2009 Incentive Compensation Program On February 19, 2009, the Management Development and Compensation Committee (the "Committee") of KB Home (the "Company") determined that the payment of any fiscal year 2009 incentive compensation to Jeffery T. Mezger, President and Chief Executive Officer; William R. Hollinger, Senior Vice President and Chief Accounting Officer; Glen Barnard, Senior Vice President, KBnxt Group; and Kelly Masuda, Senior Vice President and Treasurer (collectively, the Company's "Named Executive Officers") shall be subject to the achievement of certain levels of performance with respect to two objective performance goals under the Amended and Restated KB Home 1999 Incentive Plan. The first performance goal is based on achievement of specified levels of pre-tax income or loss of the Company, and the second is based on achievement of specified levels of operating cash flow. If the specified threshold level of performance with respect to either goal is achieved, the fiscal year 2009 incentive compensation program will fund at its maximum level, and the payout opportunities for each of the Named Executive Officers shall be as set forth in the table below. The target percentage is a percentage of base salary, while the threshold percentage is equal to 25% of the target, and the maximum percentage is equal to 200% of the target. Furthermore, in all cases, the amount of incentive compensation actually paid can be reduced or eliminated at the discretion of the Committee.

Threshold Percentage Target Percentage Maximum Percentage Jeffrey T. Mezger 50 % 200 % 400 % William R. Hollinger 20 % 80 % 160 % Glen Barnard 20 % 80 % 160 % Kelly Masuda 20 % 80 % 160 %

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