Employee Benefit and Stock Plans

12 Months Ended

Nov. 30, 2024

Share-Based Payment Arrangement [Abstract]

Most of our employees are eligible to participate in the KB Home 401(k) Savings Plan (“401(k) Plan”) under which we

match employee contributions up to 6% of eligible compensation per payroll period. The aggregate cost of the 401(k) Plan to

us was $8.8 million in 2024, $8.3 million in 2023 and $8.2 million in 2022. The assets of the 401(k) Plan are held by a third-

party trustee, with an affiliate of the trustee managing some fund options offered by the 401(k) Plan. The 401(k) Plan

participants may direct the investment of their funds among one or more of the several fund options offered by the 401(k) Plan.

As of November 30, 2024, 2023 and 2022, approximately 6%, 5% and 3%, respectively, of the 401(k) Plan’s net assets at each

period were invested in our common stock.

Approval of the Amended and Restated KB Home 2014 Equity Incentive Plan. We maintain one active equity

compensation plan, the Amended and Restated KB Home 2014 Equity Incentive Plan (“Amended and Restated 2014 Plan”),

with an aggregate share grant capacity for stock-based awards to our employees, non-employee directors and consultants of

18,200,000 shares. In addition, if an award made under the Amended and Restated KB Home 2014 Equity Incentive Plan

subsequently expires or is canceled, forfeited or settled for cash, then any shares associated with such award may, to the extent

of such expiration, cancellation, forfeiture or cash settlement, be used again for new grants under the plan, and shares tendered

or withheld to satisfy tax withholding obligations with respect to a full value award may be used again for new grants under the

plan. Under the Amended and Restated 2014 Plan, grants of stock options and other similar awards reduce the share grant

capacity on a 1-for-1 basis, and grants of restricted stock and other similar “full value” awards reduce the share grant capacity

on a 1.78-for-1 basis. Any shares that again become available for grant will be added back to the equity incentive plan’s

available grant capacity in the same manner in which they were initially deducted (i.e., 1-for-1 or 1.78-for-1). The Amended

and Restated 2014 Plan provides stock options may be awarded for periods of up to 10 years, and enables us to grant other

stock-based awards and cash bonuses.

Stock-Based Compensation. With the approval of the management development and compensation committee, consisting

entirely of independent members of our board of directors, we have provided compensation benefits to certain of our employees

in the form of stock options, restricted stock and PSUs. Certain stock-based compensation benefits are also provided to our

non-employee directors pursuant to the Non-Employee Directors Compensation Plan (“Director Plan”). Compensation expense

related to equity-based awards is included in selling, general and administrative expenses in our consolidated statements of

operations.

The following table presents our stock-based compensation expense (in thousands):


	Years Ended November 30,
	2024	2023	2022
Restricted stock	$10,699	$9,659	$8,743
PSUs	22,296	23,065	18,757
Director awards	1,475	1,888	1,964
Total	$34,470	$34,612	$29,464

Stock Options. Stock option transactions are summarized as follows:


	Years Ended November 30,
	2024		2023		2022
	Options	Weighted Average Exercise Price	Options	Weighted Average Exercise Price	Options	Weighted Average Exercise Price
Options outstanding at beginning of year	1,109,567	$15.50	1,674,393	$15.56	1,674,393	$15.56
Granted	—	—	—	—	—	—
Exercised	(691,426)	15.09	(564,826)	15.68	—	—
Cancelled	—	—	—	—	—	—
Options outstanding at end of year	418,141	$16.17	1,109,567	$15.50	1,674,393	$15.56
Options exercisable at end of year	418,141	$16.17	1,109,567	$15.50	1,674,393	$15.56
Options available for grant at end of year	7,794,922		8,245,553		3,260,585

There were no stock options granted in 2024, 2023 or 2022. We have not granted any stock option awards since 2016.

The total intrinsic value of stock options exercised was $32.7 million in 2024 and $17.4 million in 2023. There were no stock

options exercised in 2022. The aggregate intrinsic value of both stock options outstanding and stock options exercisable was

$27.8 million at November 30, 2024, $40.6 million at November 30, 2023, and $26.5 million at November 30, 2022. The

intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the price of the

option.

Stock options outstanding and stock options exercisable at November 30, 2024 are summarized as follows:


	Options Outstanding			Options Exercisable
Exercise Price	Options	Weighted Average Exercise Price	Weighted Average Remaining Contractual Life	Options	Weighted Average Exercise Price	Weighted Average Remaining Contractual Life
$14.92	14,000	$14.92	0.9	14,000	$14.92
$16.21	404,141	16.21	1.8	404,141	16.21
$14.92 to $16.21	418,141	$16.17	1.8	418,141	$16.17	1.8

At November 30, 2024, there was no unrecognized stock-based compensation expense related to stock option awards as all

these awards were fully vested.

Restricted Stock. From time to time, we grant restricted stock to various employees as a compensation benefit. During the

restriction periods, these employees are entitled to vote and to receive cash dividends on such shares. The restrictions imposed

with respect to the shares granted lapse in installments within, or in full at the end of, three years after their grant date if certain

conditions are met.

Restricted stock transactions are summarized as follows:


	Years Ended November 30,
	2024		2023		2022
	Shares	Weighted Average per Share Grant Date Fair Value	Shares	Weighted Average per Share Grant Date Fair Value	Shares	Weighted Average per Share Grant Date Fair Value
Outstanding at beginning of year	588,167	$21.29	543,886	$19.50	431,191	$19.22
Granted	181,287	74.46	329,209	41.78	347,131	27.49
Vested	(292,217)	37.48	(268,696)	42.12	(192,840)	29.09
Cancelled	(20,097)	35.88	(16,232)	32.24	(41,596)	38.58
Outstanding at end of year	457,140	$50.45	588,167	$21.29	543,886	$19.50

As of November 30, 2024, we had $20.0 million of total unrecognized compensation cost related to restricted stock awards

that will be recognized over a weighted average period of approximately three years.

Performance-Based Restricted Stock Units. On October 10, 2024, we granted PSUs to certain employees. Each PSU grant

corresponds to a target amount of our common stock (“Award Shares”). Each PSU entitles the recipient to receive a grant of

between 0% and 200% of the recipient’s Award Shares, and will vest based on our achieving, over a three-year period

commencing on December 1, 2024 and ending on November 30, 2027, specified levels of (a) cumulative adjusted earnings per

share; (b) average adjusted return on invested capital; and (c) revenue growth performance relative to a peer group of high-

production public homebuilding companies. The grant date fair value of each such PSU was $79.81. Upon vesting, each PSU

recipient is entitled to receive a proportionate amount of credited cash dividends that are paid in respect of one share of our

common stock with a record date between the grant date and the date the compensation committee of our board of directors

determines the applicable performance achievements, if any. On October 5, 2023, we granted PSUs to certain employees with

similar terms as the 2024 PSU grants, except that the applicable performance period commenced on December 1, 2023 and

ends on November 30, 2026. The grant date fair value of each such PSU was $44.10. On November 14, 2022, we granted

PSUs to certain employees with similar terms as the 2024 PSU grants, except that the applicable performance period

commenced on December 1, 2022 and ends on November 30, 2025. The grant date fair value of each such PSU was $30.12.

PSU transactions are summarized as follows:


	Years Ended November 30,
	2024		2023		2022
	Shares	Weighted Average per Share Grant Date Fair Value	Shares	Weighted Average per Share Grant Date Fair Value	Shares	Weighted Average per Share Grant Date Fair Value
Outstanding at beginning of year	1,225,415	$21.18	1,273,157	$19.70	1,392,864	$23.48
Granted	450,270	70.66	554,523	39.80	650,077	33.34
Vested	(519,636)	40.06	(602,265)	35.20	(674,677)	38.00
Cancelled	—	—	—	—	(95,107)	38.55
Outstanding at end of year	1,156,049	$44.12	1,225,415	$21.18	1,273,157	$19.70

The number of shares of our common stock actually granted to a recipient, if any, when a PSU vests will depend on the

degree of achievement of the applicable performance measures during the applicable three-year period. The shares of our

common stock that were granted under the terms of PSUs that vested in 2024 included an aggregate of 259,818 additional

shares above the target amount awarded to the eligible recipients based on our achievement of certain levels of the three above-

described metrics over the three-year period from December 1, 2020 through November 30, 2023. Similarly, the shares of our

common stock that were granted under the terms of PSUs that vested in 2023 included an aggregate of 267,674 additional

shares above the target amount based on our achievement of certain levels of the three above-described metrics over the period

from December 1, 2019 through November 30, 2022, and the shares of our common stock that were granted under the terms of

PSUs that vested in 2022 included an aggregate of 265,782 additional shares above the target amount based on our achievement

of certain levels of the three above-described metrics over the period from December 1, 2018 through November 30, 2021. The

PSUs do not have dividend or voting rights during the performance period. Compensation cost for PSUs is initially estimated

based on target performance achievement and adjusted as appropriate throughout the performance period. Accordingly, future

compensation costs associated with outstanding PSUs may increase or decrease based on the probability and extent of

achievement with respect to the applicable performance measures. At November 30, 2024, we had $47.1 million of total

unrecognized compensation cost related to unvested PSUs, which is expected to be recognized over a weighted-average period

of approximately three years.

Director Awards. We have granted deferred common stock awards to our non-employee directors pursuant to the terms of

the Director Plan and elections made by each director. At November 30, 2024, 2023 and 2022, the aggregate outstanding

deferred common stock awards granted under the Director Plan were 86,504, 271,683 and 409,648, respectively. In addition,

we have granted common stock on an unrestricted basis to our non-employee directors on the grant date pursuant to the

Director Plan and elections made by each director.

Grantor Stock Ownership Trust. At November 30, 2023, we had a grantor stock ownership trust (“Trust”), which was

established in 1999 and administered by a third-party trustee, that held and distributed the shares of common stock acquired to

support certain employee compensation and employee benefit obligations under our existing stock option plan, the 401(k) Plan

and other employee benefit plans. For financial reporting purposes, the Trust was consolidated with us, and therefore any

dividend transactions between us and the Trust were eliminated. Acquired shares held by the Trust were valued at the market

price on the date of purchase and shown as a reduction to stockholders’ equity in the consolidated balance sheets. The

difference between the Trust share value and the market value on the date shares were released from the Trust was included in

paid-in capital. Common stock held in the Trust was not considered outstanding in the computations of earnings per share. The

Trust terminated on September 30, 2024. The 6,705,247 shares held by the Trust were transferred to treasury stock.