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Employment Agreement - Kaufman and Broad Home Corp. and Michael F. Henn

                          [KAUFMAN-BROAD LETTERHEAD]

June 7, 1994

Michael F. Henn
527 East Palm Drive
Glendora, CA 91741

Dear Mike:

I am pleased to confirm the following offer for you to join Kaufman and Broad
Home Corporation.

Title/Position: Senior Vice President, Chief Financial Officer - Kaufman and
Broad Home Corporation.

Start Date:  July 11, 1994.

Base Salary:  $300,000 per annum payable semi-monthly.

Auto Allowance:  $500 per month and gasoline credit card for business use.

Auto Insurance: Up to $1,000 reimbursement per year for your primary business

Fiscal Year 1994 Incentive Compensation: For fiscal year 1994 (ending November
30, 1994), you will receive an Incentive Award of $150,000. Receipt of any
Incentive Award is contingent upon your continuous employment through the
payment date (normally occurring the following January).

Fiscal Year 1995 Incentive Compensation: You will be a participant in the
Corporate Incentive Compensation pool. This pool is created by 3.5% of the
pre-tax profit of Kaufman and Broad. Your share of the Incentive Compensation
pool for fiscal year 1995, ending November 30, 1995, will be 5%. (This formula
can be altered at the discretion of the Board's Compensation Committee, but will
remain constant in its intent at providing similar compensation.) In addition,
for fiscal year 1995, you will be eligible for a Discretionary Incentive Award
based on the degree of success achieved in meeting specific mutually agreed upon
goals. Your award will range from 0-to-25% of your base salary. Your individual
performance shall be judged based on annual performance achievements and is the
sole discretion of company management. Receipt of any Incentive Award is
contingent upon your continuous employment through the payment date (normally
occurring the following January).

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Performance Share Plan and Stock Options: I will recommend to the Personnel,
Compensation and Stock Plan Committee of the Board of Directors at its next
meeting after your effective date of employment that you be promptly granted
10,000 units of our Performance Share Plan. This is a new Plan which has been
instituted to provide a tangible, performance-driven stake in the long term
success of our Company. This Plan, which is further explained in the attached
Plan overview, was created to directly link executive performance and reward
with shareholder value creation.

The 10,000 units that will be granted under this plan is a target number which
corresponds to 100% Plan achievement. Based on the performance factors of the
Plan, the final payout can range from 0 to 150% of the target number. If we
maximize our results and the stock price reaches $45.00 per share at the end of
the performance period (three years), the value of your award would be $675,000.
We believe the Performance Share Plan rewards our senior management for superior
performance as a team.

In addition, the Committee will also be asked to approve the prompt grant of
20,000 options under our 1988 Employee Stock Plan. Market value will be
determined on the date of grant. It is the Company's policy, although not a
commitment, to grant stock options each year to our Senior Officers. In your
role as Senior Vice President, Chief Financial Officer, you would be a member of
the Senior Management Committee. This committee is comprised of the Chief
Financial Officer, the Executive Vice Presidents of United States and European
Operations, the Senior Vice President of Real Estate and myself and therefore,
you would be considered at the highest level when these grants are determined.

Executive Benefits Program:

- -        Executive Medical Coverage

         -    Plan pays 100% of 'Covered' Medical Expenses.

              Participants pay $400 deductible per calendar year or $800 per
              family per year for out-of-network charges (Non-PPO usage only).
              Individuals and family members who are covered and use the PPO
              Alliance Network will only need to meet the $200/$400 deductible
              annually. In addition the participant pays the separate one
              calendar year $100 deductible for hospital stays. Contributions
              for employee and Dependent coverage apply.

         -    The Executive Medical Plan does not include coverage of dental
              expenses at 100%. 'Preventive care', i.e., cleaning and x-rays are
              normally paid at 80%, 'Major work', i.e., crowns at 50%.

- -        Executive Financial and Tax Planning Service

         -    The purpose of the plan is to assist in maximizing the opportunity
              to build a personal estate, define and implement personal
              financial planning objectives and assist with the annual tax
              planning and return preparation.

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         -    During the first year ONLY of participation in the Executive
              Benefits Program, participants will be allowed up to $5,500 in
              reimbursed expenses for financial/estate planning through the
              consulting firm of their choice.

         -    A maximum of $1,250 is reimbursable for tax consulting and return
              preparation each year.

         -    $1,500 reimbursement is available for audit research and

- -        Executive Life Insurance

         You are covered under the executive life insurance plan in the amount
         of $600,000.

         The Company's employee benefits program to include Executive Benefits
         is subject to future changes at the discretion of Company management.

Executive Commitment:

a.       During the performance of your duties on behalf of the Company, you
         will receive and be entrusted with certain confidential and/or secret
         information of a proprietary nature. You agree not to disclose or use,
         during your employment or anytime thereafter, any such information
         which is not otherwise publicly available.

b.       Accordingly, you will not make any public statements concerning Kaufman
         and Broad Home Corporation or any of their affiliates or subsidiaries
         regarding your employment, unless previously approved by the Company.

c.       You agree that in the event of your termination, you will not for a
         period of one year thereafter employ nor seek to employ any person
         employed by Kaufman and Broad Home Corporation or any of their
         affiliates or subsidiaries.

d.       You agree that during the term of your employment you will not engage,
         as owner, part owner, stockholder (other than passive), director, joint
         venturer, or otherwise, in any business competitive with Kaufman and
         Broad Home Corporation or any of their affiliates or subsidiaries.
         Nothing in this paragraph d. shall prevent you from obtaining normal
         employment (after the termination of your employment with the Company),
         in general industry, or housing industry as long as you comply with the
         provisions of this letter.

Employment at Will; Termination: Nothing in this letter shall be construed as an
employment contract obligating the Company (expressly or implicitly) to employ
you for any specified period of time. Either party has the right to terminate
the employment relationship at any time with or without cause. If the Company
should terminate your employment for reasons other than cause at any time prior
to December 1, 1995, the Company will pay, in twelve equal monthly payments,
(commencing the day of termination), a sum equal to your base compensation plus
the greater of your pro-rated year-to-date bonus in the current fiscal year or

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Limitation: The compensation described in the preceding paragraphs represents
our entire obligation to you during the term of your employment. Kaufman and
Broad shall have no obligation to pay any compensation (in any form or any kind)
to you in excess of the above described compensation unless our Human Resources
Department has verified such increased compensation and processed a personnel
change notice reflecting such increase.

Employment References: This offer of employment is extended to you contingent
upon satisfactory references.

Citizenship Documentation: The Federal Immigration Control and Reform Act of
1986 requires all employers to verify that employees hired since November 6,
1986 have the legal right to work in the United States. Accordingly, we ask that
on your first day you bring with you documentation to prove this. A list of
acceptable documentation is attached.

Entire Agreement: This letter together with the documents referenced herein
contain all of the agreements and understandings regarding your employment and
the obligations of Kaufman and Broad in connection with employment. Kaufman and
Broad has not made, nor are you relying upon any oral or written promises or
statements made by Kaufman and Broad or any agent of Kaufman and Broad except as
expressly set forth herein. This letter supersedes any and all prior agreements
and understandings between you and Kaufman and Broad and alone expresses the
agreement of the parties. This letter containing all of the agreements and
understandings regarding your employment cannot be amended other than in writing
by Kaufman and Broad.

Mike, I am very happy to confirm this offer and I am sure you will make
outstanding contributions to the Kaufman and Broad team. Please sign and return
this letter to my attention in the enclosed Federal Express envelope.

Sincerely,                                  Agreed to and Acknowledged by:

/s/ Bruce E. Karatz
- -----------------------                     /s/ Michael F. Henn
Bruce E. Karatz                             --------------------
Chairman and                                Michael F. Henn
Chief Executive Officer

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