Directors' Legacy Program - Kaufman and Broad Home Corp.

                       KAUFMAN AND BROAD HOME CORPORATION
                            DIRECTORS' LEGACY PROGRAM
                            (amended January 1, 1999)


1.      PURPOSE OF THE PROGRAM

        The Kaufman and Broad Home Corporation Directors' Legacy Program (the
        'Program') allows each eligible Director of Kaufman and Broad Home
        Corporation (the 'Company') to recommend that the Company make a
        donation of up to $1,000,000 ($500,000 for Directors retiring prior to
        January 1, 1999) to the eligible tax-exempt organization(s) (the
        'Donee(s)') selected by the Director, with the donation to be made in
        the Director's name in ten equal annual installments, with the first
        installment to be made as soon as is practicable after the Director's
        death. The purpose of the Program is to recognize the interest of the
        Company and its Directors in supporting worthy educational institutions
        and other charitable organizations.

2.      ELIGIBILITY

        All persons who were serving as Directors of the Company as of January
        1, 1995, shall be eligible to participate in the Program. All Directors
        who join the Company's Board of Directors after that date shall be
        immediately eligible to participate in the Program upon election to the
        Board. However, the Nominating Committee of the Board of Directors may,
        in its good faith discretion, deny participation to a Director if it
        determines that it would not be in the Company's best interest for the
        Director to participate, whether due to excessive cost or other
        circumstances.

3.      RECOMMENDATION OF DONATION

        When a Director becomes eligible to participate in the Program, he or
        she shall make a written recommendation to the Company, on a form
        approved by the Company for this purpose, designating the Donee(s) which
        he or she intends to be the recipient(s) of the Company donation to be
        made on his or her behalf. A Director may revise or revoke any such
        recommendation prior to this or her death by singing a new
        recommendation form and submitting it to the Company.

4.      AMOUNT AND TIMING OF DONATION

        Each eligible Director may choose one organization to receive a Company
        donation of $1,000,000 (or $500,000, if applicable) or up to five
        organizations to







        receive donations aggregating $1,000,000 (or $500,000, if applicable).
        Each recommended organization must be recommended to receive a donation
        of at least $100,000. The donation will be made by the Company in ten
        equal annual installments, with the first installment to be made as soon
        as is practicable after the Director's death. If a Director recommends
        more than one organization to receive a donation, each will receive a
        prorate portion of each annual installment. Each annual installment
        payment will be divided among the recommended organizations in the same
        proportions as the total donation amount has been allocated among the
        organizations by the Director.

5.      DONEES

        In order to be eligible to receive a donation, a recommended
        organization must initially, and at the time a donation is to be made,
        qualify to receive tax deductible donations under the Internal Revenue
        Code, and be reviewed and approved by the Nominating Committee of the
        Board of Directors of the Company. A recommendation will be approved
        unless it is determined, in the exercise of good faith judgment, that a
        donation to the organization would be detrimental to the best interests
        of the Company. A Director's private foundation is not eligible to
        receive donations under the Program. If an organization recommended by a
        Director ceases to qualify as a Donee, and if the Director does not
        submit a form to change the recommendation before his or her death, the
        amount recommended to be donated to the organization will instead be
        donated to the Director's remaining recommended qualified Donee(s) on a
        prorated basis. If none of the recommended organizations qualify, the
        donation will be made to the organization(s) selected by the Company.

6.      VESTING

        For persons serving as Directors as of January 1, 1999, two separate
        vesting schedules shall apply. For the initial $500,000 charitable award
        (as adopted under the original Program dated January 1, 1995), a sixty
        month vesting schedule applies in accordance with the following
        schedule:




                        Months of Service      Donation Amount
                        -----------------      ---------------
                                            
                        Less than 12                  0%
                        12-23                        20%
                        24-35                        40%
                        36-47                        60%
                        48-59                        80%
                        60 or more                  100%









        For persons serving as Directors on January 1, 1995, Board service prior
        to January 1, 1995 will be counted as vesting service for the original
        $500,000 donation only.

        As it relates to the increased donation amount of $500,000 (as adopted
        under the amended Program dated January 1, 1999) a separate thirty-six
        month vesting schedule shall apply which begins January 1, 1999, and
        will be fully satisfied on January 1, 2002. The donation amount will be
        determined in accordance with the following schedule:




                        Months of Service      Donation Amount
                        -----------------      ---------------
                                             
                        Less than 12                  0%
                        12-23                        40%
                        24-35                        70%
                        36 or more                  100%


        For persons joining the Board of Directors after January 1, 1999, a
        Director will be fully vested in the Program for the entire $1,000,000
        charitable award upon the completion of sixty months of service as a
        Director. The donation amount will be determined in accordance with the
        following schedule:




                        Months of Service        Donation Amount
                        -----------------        ---------------
                                             
                        Less than 12                  0%
                        12-23                        20%
                        24-35                        40%
                        36-47                        60%
                        48-59                        80%
                        60 or more                  100%


        Notwithstanding the preceding vesting schedules, a Director shall become
        fully vested in the Program in the event he or she dies or becomes
        disabled while serving as a Director, or in the event that he or she
        retires at the recommended retirement age.

        If a Director recommends more than one organization to receive aggregate
        donations of $1,000,000 (or $500,000 for Directors retiring prior to
        January 1,





        1999), and if the applicable vested donation amount is less that
        $1,000,000, the actual donation amount will be divided among the
        recommended organizations in the same proportions as the total donation
        amount has been allocated among the organizations by the Director. For
        example, if a Director recommends one organization to receive a donation
        of $750,000 and another to receive a donation of $250,000, the
        organization recommended to receive the $750,000 will receive 75% of the
        vested donation amount and the other organization will receive 25% of
        the vested donation amount.

7.      FUNDING AND PROGRAM ASSETS

        The Company may fund the Program or it may choose not to fund the
        Program. If the Company elects to fund the Program in any manner,
        neither the Directors nor their recommended Donee(s) shall have any
        rights or interests in any assets of the Company identified for such
        purpose. Nothing contained in the Program shall create, or be deemed to
        create, a trust, actual or constructive, for the benefit of a Director
        or any Donee recommended by a Director to receive a donation, or shall
        give, or be deemed to give, any Director or recommended Donee any
        interest in any assets of the Program or the Company. If the Company
        elects to fund the Program through life insurance policies, a
        participating Director agrees to cooperate and fulfill the enrollment
        requirements necessary to obtain insurance on his or her life.

8.      AMENDMENT OR TERMINATION

        The Board of Directors of the Company may, at any time, without the
        consent of the Directors participating in the Program, amend, suspend,
        or terminate the Program.

9.      CHANGE OF OWNERSHIP

        Notwithstanding any contrary provisions in Section 7 or Section 8, if
        there is a Change of Ownership of the Company, all participants serving
        as Directors at the time of the Change of Ownership shall immediately
        become vested in the Program, and the Program shall thereafter be
        irrevocable with respect to all participants in the Program at the time
        of the Change of Ownership. In addition, the Company shall immediately
        create an irrevocable trust to make the anticipated Program donations,
        and shall immediately transfer to the trust sufficient assets (which may
        include insurance policies) to make all the Program donations in respect
        to the individuals who were participants immediately before the of
        Ownership. For the purpose of the Program, the term 'Change of
        Ownership' shall have the same meaning as is defined for the term in
        Section 9 of the Company's 1998 Employee Stock Plan, or any successor
        plan thereto.






10.     ADMINISTRATION

        The Program shall be administered by the Chairman of the Board and the
        Nominating and Corporate Governance Committee of the Board of Directors
        of the Company. The Chairman of the Board shall have plenary authority
        in its discretion, but subject to the provisions of the Program, to
        prescribe, amend, and rescind rules, regulations and procedures relating
        to the Program. The determinations of the Chairman of the Board on the
        foregoing matters shall be conclusive and binding on all interested
        parties.

11.     GOVERNING LAW

        The Program shall be construed and enforced according to the laws of
        California, and all provisions thereof shall be administered according
        to the laws of said state.

12.     EFFECTIVE DATE

        The Program effective date is January 1, 1995. The recommendation of a
        Director will not be effective until he or she completes the Program
        enrollment requirements.