UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): February 21, 2014

WILLIAM LYON HOMES

(Exact name of registrant as specified in its charter)

4695 MacArthur Court, 8^th Floor

Newport Beach, California 92660

(Address of principal executive offices) (Zip Code)

(949) 833-3600

(Registrant’s telephone number, including area code)

Not Applicable

(Former name and former address if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

(e) On February 21, 2014, the Compensation Committee of the Board of Directors (the “Committee”) of William Lyon Homes, a Delaware corporation (the “Company”), approved the following compensation arrangements for certain of the Company’s named executive officers. The Committee approved base salaries for such officers as set forth below, which will be effective as of March 10, 2014, and adopted a cash bonus and long-term incentive program for 2014 (the “2014 Incentive Program”) pursuant to the Company’s 2012 Equity Incentive Plan, as amended (the “Plan”), which will consist of cash bonuses and long-term incentive equity awards, subject to various targets and conditions (as further described below).

Base Salary. Set forth below is a table showing the base salaries approved by the Committee.

Cash Bonus. For fiscal year 2014, General William Lyon will be eligible to earn a cash bonus of up to 50% of his base salary, to be determined based upon the Committee’s exercise of its discretion following the end of the 2014 fiscal year.

Pursuant to the 2014 Incentive Program, certain of the named executive officers will be eligible to earn a cash bonus up to 200% of his target bonus opportunity based on the Company’s achievement of a pre-established consolidated EBITDA target, with such adjustments as may be approved by the Committee, including positive and negative discretion, as applicable. The cash bonus opportunities for such named executive officers are set forth below:

Achievement of performance criteria in between the threshold, target, upside and maximum levels above will result in payouts calculated using linear interpolation. Target bonus opportunities are 125% of base salary for each of Messrs. William H. Lyon and Zaist, and 75% of base salary for Mr. Severn.

Long-Term Equity Based Compensation. Under the 2014 Incentive Program, the Committee also approved the granting of performance-based restricted stock awards to Messrs. William H. Lyon, Zaist and Severn (collectively, the “Performance-Based Restricted Stock”), to be granted on March 1, 2014 (the “Grant Date”). The table below sets forth the target grant date fair value of such awards as approved by the Committee.

The number of shares of Performance-Based Restricted Stock to be granted will be determined on the Grant Date by taking the applicable maximum award value that may be earned under the 2014 Incentive Program, which is 200% of the officer’s target grant date fair value, and dividing such amount by the Fair Market Value (as defined in the Plan) of a share of Class A Common Stock of the Company (the “Common Stock”) on the Grant Date, and will be subject to forfeiture based on service and performance conditions. The actual number of such shares of Performance-Based Restricted Stock that will be earned (the “Earned Shares”) is subject to the Company’s achievement of a pre-established return on equity (“ROE”) target as of the end of the 2014 fiscal year, with such adjustments as may be approved by the Committee. One-third of the Earned Shares will vest on each of the first, second and third anniversaries of the Grant Date, subject to each officer’s continued service through each vesting date. The Performance-Based Restricted Stock opportunities for certain of our named executive officers are set forth below:

Achievement of the ROE target in between the threshold, target, upside and maximum levels above will result in Earned Shares calculated using linear interpolation.

In addition to the Performance-Based Restricted Stock described above, the Committee approved the grant of a restricted stock award (the “Restricted Stock Award”) to General William Lyon on the Grant Date, with a target award value of $500,000. The number of shares of restricted stock to be granted will be determined on the Grant Date by taking the target award value and dividing such amount by the Fair Market Value (as defined in the Plan) of a share of Common Stock on the Grant Date (the “Award Shares”). The Restricted Stock Award will be subject to forfeiture based on service and certain other conditions, including the Committee’s exercise of its discretion to determine the number of shares that will be earned, up to the Award Shares. One-third of the shares earned pursuant to the Restricted Stock Award will vest on each of the first, second and third anniversaries of the Grant Date, subject to General Lyon’s continued service through each vesting date.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 27, 2014