Exhibit 10.5

nvr, inc.

NONQUALIFIED deferred compensation plan

 

(Originally Effective December 15, 2005, as Amended and Restated)

 

 

ARTICLE 1
PURPOSE

 

NVR, Inc. (the “Company”) established the NVR, Inc. Nonqualified Deferred Compensation Plan (the “Plan”) for the benefit of executives of the Company and certain affiliates, effective December 15, 2005, with respect to pay received on or after January 1, 2006.  The Plan is hereby amended and restated as of November 4, 2015.  The Company intends that the Plan shall be treated as an unfunded plan for purposes of the Code, and the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and as a plan for a select group of management and highly compensated employees for purposes of ERISA.  A significant purpose of this Plan is to permit Eligible Persons who have a Company stock ownership requirement to purchase shares of the Company’s common stock on a pre-tax basis.

 

ARTICLE 2
ELIGIBILITY AND PARTICIPATION

 

2.1Eligibility

 

Eligibility to participate in the Plan shall be limited to Employees who are designated by the Board to participate in the Plan (hereafter, each an “Eligible Person”).  An Eligible Person may elect to defer a portion of Base Compensation and any Bonus payable with respect to services to be performed as an Employee by making a deferral election as further provided in Section 3.1.

 

2.2Cessation of Participation

 

An Employee who qualifies as an Eligible Person for a particular calendar year will continue to be an Eligible Person until such time as the Board determines otherwise, including that the Eligible Person no longer satisfies the Plan’s eligibility requirements or is not a member of a select group of management or highly compensated employees.  Any determination of ineligibility shall be effective for an immediately following calendar year.  Any individual who ceases to be an Eligible Person shall continue to be a Participant with respect to amounts credited to his or her Account until such amounts are completely distributed to him or her in accordance with the Plan.

 

Article 3

ELECTIVE DEFERRALS

 

3.1Deferral Election

 

An Eligible Person may make a deferral election with respect to an upcoming calendar year pursuant to the provisions of this Section 3.1.  Any deferral election and any revocation of the election permitted under this Plan shall be in writing, in the form designated by the Plan Administrator and may be subject to guidelines of the Plan Administrator establishing a minimum deferral amount for participation.

 

(a)Compensation Deferral

 

An Eligible Person may elect to defer up to 100% of his or her Base Compensation payable during an upcoming calendar year net of any required tax withholding, and any deferrals and/or salary reduction amounts as described in Section 3.1(d), by completing and filing an election with the Plan Administrator during the enrollment

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period established by the Plan Administrator for deferral of that Base Compensation.  The enrollment period shall end no later than December 31 of the current year for deferrals in the upcoming calendar year.  Except as provided in Section 4.4 and Section 4.5, a Base Compensation deferral election shall become irrevocable as of the close of the enrollment period applicable to the Base Compensation.  The Base Compensation deferral election may be revoked in writing up to the end of the applicable enrollment period by submitting a revocation to the Plan Administrator by that date.  The Eligible Person shall set forth the amount to be deferred as a full percentage or dollar amount of Base Compensation payable during the calendar year.

 

(b)Bonus Deferral

 

An Eligible Person may elect to defer up to 100% of his or her Bonus, if any, payable with respect to the upcoming calendar year net of any required tax withholding, and any deferrals and/or salary reduction amounts as described in Section 3.1(d), by completing and filing an election with the Plan Administrator during the enrollment period established by the Plan Administrator for deferral of that Bonus.  In the case of a performance-based Bonus (within the meaning of Section 409A of the Code and the regulations issued thereunder), the enrollment period shall end no later than the date six (6) months prior to the end of the performance measurement period to which such Bonus relates and, in the case of a Bonus that is not performance-based, no later than December 31 of the calendar year prior to the calendar year to which the Bonus relates.

 

Except as provided in Section 4.4 and Section 4.5, a Bonus deferral election shall become irrevocable as of the close of the enrollment period applicable to the Bonus.  The Bonus deferral election may be revoked in writing up to the end of the applicable enrollment period by submitting a revocation to the Plan Administrator by that date.  The Eligible Person shall set forth the amount to be deferred as a full percentage or dollar amount of the Bonus payable during the upcoming calendar year.

 

(c)First Year Participation

 

If an Eligible Person first becomes eligible to participate in the Plan during a calendar year and has never previously participated in an account-based deferred compensation plan with the Company, any Participating Employer and certain affiliates, then notwithstanding the general requirement stated in Section 3.1(a) or Section 3.1(b), as applicable, that the election be completed and submitted before the calendar year of commencement (but in accordance with all other applicable provisions of Section 3.1(a) and Section 3.1(b)), an election may be submitted to the Plan Administrator within thirty (30) days after the Participant first becomes an Eligible Person.  However, such election shall be effective only with respect to Base Compensation and Bonus payments earned and payable following submission of the election to the Plan Administrator.

 

(d)Net Deferral Affected by 401(k) Deferrals and Other Pay Deductions

 

In determining the actual amount of Base Compensation and Bonus deferral to be credited to a Participant’s Account under the Plan for a calendar year, the total deferral election amount for the calendar year shall be reduced by the following amounts but only to the extent necessary to cover these contributions or the withholding obligation:  (i) any elective deferrals contributed by the Participant for such year under the NVR, Inc. Profit Sharing Plan (or any other 401(k) plan maintained by a Participating Employer); (ii) contributions by the Participant for such year to any flexible spending account, health savings account, cafeteria plan or similar arrangement; and (iii) FICA amounts withheld from the Participant’s pay for such year.  Accordingly, only the net deferral shall be credited under this Plan in a calendar year.

 

3.2Application of Election and Vesting

 

An election for the deferral of Base Compensation and the deferral of Bonus amounts must be completed for each calendar year with respect to which amounts are deferred under the Plan, in accordance with this Article 3.  A Participant shall at all times be 100% vested in his or her elective deferrals of Base Compensation and Bonus amounts and any earnings thereon.

 

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3.3Effect of Employment Termination 

 

If a Participant ceases to be an Employee, at a time when he or she has in effect for the calendar year one or more deferral elections, the deferral election or elections shall terminate with respect to any amount not yet paid at the time the individual ceases to be an Employee.  Amounts already deferred into the Participant’s Account shall remain so credited and shall be distributed in accordance with the terms of this Plan.

 

article 4
PAYMENT OF DEFERRED COMPENSATION

 

4.1Selecting the Payment Commencement Date

 

(a)Subject to the provisions of Article 6, with each deferral election under the Plan and relating solely to the amount so deferred and earnings on such amounts (the “Annual Account”), an Eligible Person shall designate the time as of which payment of his or her Annual Account under the Plan is to commence as one of the following alternatives:

 

(i)Payment shall be paid or begin to be paid as soon as administratively feasible following the Participant’s Termination Date and before the later of (i) December 31 of the calendar year of the Participant’s Termination Date, or (ii) the fifteenth (15th) day of the third (3^rd) month following the Participant’s Termination Date.  Notwithstanding the foregoing, distributions made to a Key Employee upon such separation shall be paid or begin to be paid no earlier than the first (1^st) day following the six (6^th) month anniversary of the Participant’s Termination Date; or

 

(ii)The January 31 of the calendar year designated by the Eligible Person, which must be at least two (2) calendar years after the year in which the amount is actually deferred, but not later than the twentieth (20th) calendar year following the year in which the deferral election is made (hereafter, the “Specified Payment Date”). Payment shall be made as soon as administratively feasible following the Specified Payment Date and before the later of (i) December 31 of the calendar year of the Specified Payment Date, or (ii) the fifteenth (15th) day of the third (3rd) month following the Specified Payment Date.

 

If a payment commencement date for the Annual Account under this Section 4.1(a) is not established at the time an Eligible Person submits his or her deferral election form, payment of the applicable Annual Account shall be made on the last day of the month in which occurs the six (6) month anniversary of the Participant’s Termination Date.

 

(b)Notwithstanding any provision to the contrary in this Article 4, if an Eligible Person experiences a Separation from Service prior to attainment of the Retirement Age and prior to complete distribution of his or her Account, then the portion of the Account remaining unpaid as of the Participant’s Termination Date shall be paid in a single lump sum as of the last day of the month in which occurs the six (6) month anniversary of the Participant’s Termination Date.

 

(c)Notwithstanding any provision to the contrary in this ARTICLE 4:

 

(i)If the Company, in its sole discretion, determines that payment of an Annual Account in accordance with Section 4.1(a)(ii) would exceed the deduction limit under Section 162(m) of the Code, pursuant to Treasury Regulation Section 1.409A-2(b)(7)(i) such payment shall be delayed until the last day of the month in which occurs the six (6) month anniversary of the Participant’s Termination Date; and

 

(ii)If the Company, in its sole discretion, reasonably anticipates that payment will violate Federal securities law or other applicable law, pursuant to Treasury Regulation Section 1.409A-2(b)(7)(ii) such payment shall be delayed until the earliest day at which the Company reasonably anticipates that the payment will not cause a violation of such laws.  For purposes of this paragraph (ii), a violation of “other applicable law” does not include a payment which would cause inclusion of the payment in the Participant’s gross income or which would subject the Participant to any Code penalty or other Code provision.

 

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(d)Notwithstanding any provision to the contrary in this Article 4 the Plan Administrator, in its sole discretion, may accelerate payment of all or a portion of a Participant’s Annual Account upon the occurrence of any of the events set forth below and in accordance with Treasury Regulation Section 1.409A-3(j)(4): 

 

(i)to the extent that (A) the aggregate amount in the Participant's Account does not exceed the applicable dollar amount under Section 402(g)(1)(B) of the Code, (B) the payment results in the termination of the Participant's entire interest in the Plan and any plans that are aggregated with the Plan pursuant to Treasury Regulation Section 1.409A-1(c)(2), and (C) the Plan Administrator’s decision to cash out the Participant's Account is evidenced in writing no later than the date of payment;

 

(ii)to pay (A) the Federal Insurance Contributions Act (“FICA”) tax imposed under Sections 3010, 3121(a) and 3121(v)(2) of the Code (the “FICA Amount”), or (B) the income tax at source on wages imposed under Section 3401 of the Code or the corresponding withholding provisions of applicable state, local or foreign tax laws as a result of the payment of the FICA Amount and the additional income tax at source on wages attributable to the pyramiding Section 3401 wages and taxes; provided, however, that the total payment under this Section shall not exceed the FICA Amount and the income tax withholding related to the FICA Amount;

 

(iii)to the extent necessary to comply with a domestic relations order (as defined in Section 414(p)(1)(B) of the Code);

 

(iv)as satisfaction of the Participant’s debt to the Company, provided the debt is incurred in the ordinary course of the Participant’s employment relationship, the entire amount of the reduction does not exceed $5,000 in any calendar year and the reduction is made at the same time and in the same amount as the debt otherwise would have been due and collected from the Participant; and/or

 

(v)where the accelerated payment occurs as part of a settlement between the Participant and the Company of an arm’s length, bona fide dispute as to the Participant’s right to the deferred amount.  Such accelerated payment must reflect at least a twenty-five percent (25%) reduction in the value of the amount that would have been payable had there been no dispute as to the Participant’s right to the payment.

 

(e)Notwithstanding anything to the contrary in the Plan:

 

(i)If any portion of a Participant’s Account remains unpaid at the time of his or her death, payment shall be made in accordance with the provisions of Section 6.1 and Section 6.2, and this ARTICLE 4 shall be inapplicable to such payment.

 

(ii)If any portion of a Participant’s Account remains unpaid at the time of his or her Separation from Service due to Disability, payment shall be made in accordance with the provisions of Section 6.3, and this ARTICLE 4 shall be inapplicable to such payment.

 

4.2Form of Payment

 

In each deferral election completed and submitted pursuant to Section 4.1(a), the Eligible Person also shall select the form of payment for distribution of his or her Annual Account under the Plan, from one of the following forms:

 

(a)A single lump sum; or

 

(b)Subject to Sections 4.1(b), (c) and (d), a series of annual installments for three (3), five (5), or ten (10) such consecutive years, as elected by the Eligible Person.  If an Eligible Person, who designated payment to be made pursuant to this option, does not attain the Retirement Age prior to his or her Separation from Service, payment shall be made in a single lump sum.

 

If a form of payment under this Section 4.2 is not established at the time an Eligible Person

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submits his or her initial deferral election form and there is no default form of payment determined in accordance with Section 4.1, the payment form of his or her Annual Account shall be in a single lump sum.  All payments under the Plan shall be in the form of shares of common stock of the Company.

 

4.3Change of Form or Timing of Payment

 

Subject to approval of the Plan Administrator, a Participant may change his or her election as to the form or timing of payment for each deferral election under this ARTICLE 4, contingent on the following requirements having been satisfied:

 

(a)the change must be made in writing and in the form designated by the Plan Administrator;

 

(b)the change must be made at a time when the Participant is still an Employee, and must be consistent with Sections 4.1, 4.2 and 4.3;

 

(c)the change may not take effect until at least twelve (12) months after such election is filed;

 

(d)the change must be made at least twelve (12) months prior to the date that would have been the payment or commencement of payment date for that deferral election; and

 

(e)the change must delay the payment date or, in the case of installments, each of the payment dates by at least five (5) years.

 

4.4Unforeseen Emergency

 

The Plan Administrator may, in its sole discretion, make distributions to a Participant from his or her Account prior to the date that amounts would otherwise become payable if the Plan Administrator determines that the Participant has incurred an Unforeseeable Emergency.  The amount of any such distribution shall be limited to the amount reasonably necessary to meet the Participant’s needs created by the Unforeseeable Emergency, plus the amount necessary to pay the taxes thereon, after taking into account reimbursement from insurance and liquidation of the Participant’s available assets (including any additional compensation available to the Participant in the event that his or her deferral election under the Plan is cancelled pursuant to this Section).

 

In addition, the Plan Administrator in its discretion may at any time cancel a deferral election with respect to the remainder of the amount to be deferred under such deferral election upon determining that the Participant has suffered an Unforeseeable Emergency.  The deferral election made by a Participant next following the cancellation of his or her deferral election due to an Unforeseeable Emergency shall be treated as an initial deferral election, subject to the requirements of ARTICLE 3 and ARTICLE 4.

 

4.5Effect on this Plan of a 401(k) Plan Hardship Withdrawal

 

To the extent required to comply with Treasury Regulation §1.401(k)-1(d)(3)(iv)(E)(2), or any amendment or successor thereto, a Participant’s “elective and employee contributions” (within the meaning of such Treasury Regulation) under this Plan shall be terminated following the Participant’s receipt of a hardship distribution made in reliance on such Treasury Regulation from any plan containing a cash or deferred arrangement under Section 401(k) of the Code maintained by the Company or a related party within the provisions of subsections (b), (c), (m) or (o) of Section 414 of the Code.  The deferral election under the Plan made by the Participant next following the termination of his or her deferral election due to receipt of a hardship distribution shall be subject to the requirements of ARTICLE 3 and ARTICLE 4.

 

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Article 5
Plan accounts

 

5.1Accounts

 

Bookkeeping deferral election Accounts shall be established and maintained by the Plan Administrator for each Participant in which shall be recorded the amounts deferred by the Participant under the Plan for each deferral election (credited as of the date that they would otherwise be currently payable).

 

5.2Investment Performance

 

A Participant’s Account shall be treated as invested in deferred stock units on Company Common Stock (“Common Stock”), and adjusted to reflect increases or decreases thereon.  Accordingly, each deferred stock unit credited to the account represents the value of a share of Common Stock.  Dividend equivalents shall be credited to each deferred stock unit on each dividend payment date (based on deferred stock units held as of the dividend record date) to the extent of dividends issued on Common Stock.  Such dividend equivalents shall themselves be converted into deferred stock units as of the dividend payment date by dividing the amount of the dividend equivalents by the value of the Common Stock as of the applicable dividend payment date.  Any such additional deferred stock units (or fraction thereof) resulting from dividend equivalent credits shall be treated as deferred stock units and credited to the Participant’s Account.

 

5.3Valuation Date

 

A Participant’s Account shall be valued as of each December 31, and as of each distribution payment date, at which point credits under Section 5.2 shall be made with respect to the Account balance remaining in the Plan as of the Valuation Date.  The Company also may establish such other date or dates as Valuation Dates with respect to all Accounts, particular investments in the Accounts or particular Accounts with respect to which payment or another transaction is to occur.  A Participant’s Account shall be valued based on the average of the high and low price of the Company’s Common Stock on the Valuation Date.

 

article 6
dEATH and Disability Benefits

 

6.1Death Benefit

 

Each Participant may designate a Beneficiary to receive payment of his or her Account balance in the event of his or her death.  Each Beneficiary designation:  (i) shall be made on a form filed in the manner prescribed by the Plan Administrator, (ii) shall be effective when, and only if made and filed in such manner during the Participant’s lifetime, and (iii) upon such filing, shall automatically revoke all previous Beneficiary designations.  Upon the death of a Participant, the full amount of the Participant’s Account (or the remaining amount of the Account in the event that installment payments have commenced) shall be paid to the Participant’s Beneficiary in a single lump sum as soon as administratively practicable but before the later of (i) December 31 of the calendar year of the Participant’s death, or (ii) the fifteenth (15^th) day of the third (3^rd) month following the Participant’s death.

 

6.2Failure to Designate Beneficiary

 

If the payments to be made pursuant to this Section are not subject to a valid Beneficiary designation at the time of the Participant’s death (because the designated Beneficiary predeceased the Participant or for any other reason), the estate of the Participant shall be the Beneficiary.  If a Beneficiary designated by the Participant to receive all or any part of the Participant’s Account dies after the Participant but before complete distribution of that portion of the Account, and at the time of the Beneficiary’s death there is no valid designation of a contingent Beneficiary, the estate of such Beneficiary shall be the Beneficiary of the portion in question.

 

 

 

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6.3Disability Benefit 

 

In the event a Participant experiences a Separation from Service due to Disability, payment will be made as a lump sum as soon as practicable but before the later of (i) December 31 of the calendar year the Participant is determined to be disabled, or (ii) the fifteenth (15^th) day of the third (3^rd) month following a determination that the Participant is disabled.  Payment shall be made in the form of shares of common stock of the Company.

 

article 7
CLAIMS PROCEDURE

 

7.1Presentation of Claim

 

No application is required for the commencement of benefits under the Plan.  However, if a Participant or Beneficiary (“Claimant”) believes that he or she is entitled to a greater benefit under the Plan, the Claimant may submit a written claim to Attention:  Chief Financial Officer, NVR, Inc., Plaza America Tower, 11700 Plaza America Drive Suite 500, Reston, Virginia 20190 for such a greater benefit.  If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within 90 days after such notice was received by the Claimant.  All other claims shall be made within 180 days of the date on which the event that caused the claim to arise occurred.  The claim shall state with particularity the determination desired by the Claimant.  A claim shall be considered to have been made when a written communication made by the Claimant or the Claimant’s representative is received by the Chief Financial Officer or his authorized delegate.

7.2Decision on Initial Claim

 

The Chief Financial Officer shall consider a Claimant’s claim and provide written notice to the Claimant of any denial within a reasonable time, but no later than 90 days after receipt of the claim.  If an extension of time beyond the initial 90-day period for processing is required, written notice of the extension shall be provided to the Claimant before the initial 90-day period expires indicating the special circumstances requiring an extension of time and the date by which the Chief Financial Officer expects to render a final decision.  In no event shall the period, as extended, exceed 180 days.  If the Chief Financial Officer denies, in whole or in part, the claim, the notice shall set forth in a manner calculated to be understood by the Claimant:

(a)The specific reasons for the denial of the claim, or any part thereof;

 

(b)Specific references to pertinent Plan provisions upon which such denial was based;

 

(c)A description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; and

 

(d)An explanation of the claim review procedure, which explanation shall also include a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following a denial of the claim upon review.

 

Notwithstanding the foregoing, the Chief Financial Officer shall not have authority to consider, review or render a decision on any matter involving his own participation in, or benefit under, the Plan.  In any such matter, the Company’s Senior Vice President of Human Resources shall have the authority otherwise delegated to the Chief Financial Officer under this Section 7.2.

7.3Right to Review

 

A Claimant is entitled to appeal any claim that has been denied in whole or in part.  To do so, the Claimant must submit a signed, written request for review with the Chief Financial Officer within 60 days after receiving a notice from the Chief Financial Officer that a claim has been denied, in whole or in part.  Absent receipt

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by the Chief Financial Officer of a written request for review within such 60-day period, the claim shall be deemed to be conclusively denied.  The Claimant (or the Claimant’s duly authorized representative) may:

(a)Review and/or receive copies of, upon request and free of charge, all documents, records, and other information relevant to the Claimant’s claim; and/or

 

(b)Submit written comments, documents, records or other information relating to her claim, which the Chief Financial Officer shall take into account in considering the claim on review, without regard to whether such information was submitted or considered in the initial review of the claim.

 

If a Claimant requests to review and/or receive copies of relevant information pursuant to subsection (a) above before filing a written request for review, the 60-day period for submitting the written request for review will be tolled during the period beginning on the date the Claimant makes such request and ending on the date the Claimant reviews or receives such relevant information

 

7.4Decision on Review

 

The Plan Administrator or its delegate shall render its decision on review promptly, and not later than 60 days after it receives a written request for review of the denial, unless other special circumstances require additional time.  In such case, the Plan Administrator or its delegate will notify the Claimant, before the expiration of the initial 60-day period and in writing, of the need for additional time, the reason the additional time is necessary, and the date (no later than 60 days after expiration of the initial 60-day period) by which the Plan Administrator or its delegate expects to render its decision on review.  Notwithstanding the foregoing, if the Plan Administrator or its delegate determines that an extension of the initial 60-day period is required due to the Claimant’s failure to submit information necessary for the Plan Administrator or its delegate to decide the claim, the time period by which the Plan Administrator or its delegate must make his determination on review shall be tolled from the date on which the notification of the extension is sent to the Claimant until the date on which the Claimant responds to the request for additional information.  The decision on review shall be written in a manner calculated to be understood by the Claimant, and shall contain:

(a)Specific reasons for the decision;

 

(b)Specific references to the pertinent Plan provisions upon which the decision was based;

 

(c)A statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records or other information relevant (within the meaning of Department of Labor Regulation Section 2560.503-1(m)(8)) to the Claimant’s claim;

 

(d)A statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following a wholly or partially denied claim for benefits; and

 

(e)Such other matters as the Plan Administrator or its delegate deems relevant.

 

Notwithstanding the foregoing, no individual shall have authority to consider, review or render a decision on any matter involving his own participation in, or benefit under, the Plan.  In any such matter, the Plan Administrator shall delegate one or more other individuals to render a decision on such matter in accordance with this Section 7.4.

7.5Legal Action

 

Any final decision by the Plan Administrator or its delegate shall be binding on all parties.  A Claimant’s compliance with the foregoing provisions of this Article is a mandatory prerequisite to a Claimant’s right to commence any legal action with respect to any claim for benefits under the Plan.  Any such legal action must be initiated no later than 180 days after the Plan Administrator or its delegate renders its final decision pursuant to Section 7.4.

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article 8
MANAGEMENT AND ADMINISTRATION

 

8.1Administration

 

The Company shall serve as the Plan Administrator.  The Plan Administrator shall have the full power and authority to control and manage the operation and administration of the Plan, including the authority, in its sole discretion: (a) to promulgate and enforce such rules and regulations as deemed necessary or appropriate for the administration of the Plan; (b) to interpret the Plan consistent with the terms and intent thereof; and (c) to resolve any possible ambiguities, inconsistencies and omissions in the Plan.  All such actions shall be in accordance with the terms and intent of the Plan.

 

The Company may designate, by written instrument acknowledged by the parties, one or more persons to carry out its fiduciary responsibilities as Plan Administrator.  To the extent of any such delegation, the delegate shall become the Plan Administrator responsible for the matters assigned by the Company, and references to the Company in such capacity shall apply instead to the delegate.  Additionally, the Company may assign any of its responsibilities to specific persons who are directors, officers, or employees of the Company, or a committee composed of such persons, in order to execute its actions as the Plan Administrator.  Any action by the Company assigning any of its responsibilities to specific persons who are directors, officers, or employees of the Company, or a committee composed of such persons, shall not constitute delegation of the Company’s responsibility as Plan Administrator, but rather shall be treated as the manner in which the Company has determined internally to discharge such responsibility.  One such assignment is hereby made to the Chief Financial Officer, who shall have the power on behalf of the Company to execute Plan documents, trust agreements or other contracts relating to the Plan or Plan administration, and who shall serve generally as the Plan Administrator, except with respect to any matter requiring him to render a decision regarding his own participation in, or benefit under, the Plan.  In any such matter, the Company’s Senior Vice President of Human Resources shall have the authority otherwise delegated to the Chief Financial Officer under this Section 8.1.

 

The Plan Administrator may engage the services of accountants, attorneys, actuaries, consultants and such other professional personnel as deemed necessary or advisable to assist them in fulfilling responsibilities of the Plan Administrator under the Plan.  The Plan Administrator, and its delegates and assistants, shall be entitled to act on the basis of all tables, valuations, certificates, opinions and reports furnished by such professional personnel.

 

8.2Amendment and Termination of the Plan

 

The Company may, in its sole discretion, amend, modify or terminate this Plan at any time or from time to time, in whole or in part, and for any reason.  However, no amendment shall reduce the amount accrued in any Account as of the date of such amendment.  The Company may terminate the Plan with respect to the Participants employed or formerly employed by the Company, as follows:

 

(a)Partial Termination

 

The Company may partially terminate the Plan by instructing the Plan Administrator not to accept any additional deferral elections under this Plan.  If such a partial termination occurs, the Plan shall continue to operate and be effective with regard to deferral elections properly completed and filed prior to the effective date of such partial termination.

 

(b)Complete Termination

 

The Company may completely terminate the Plan by instructing the Plan Administrator not to accept any additional deferral elections, and by terminating all existing Plan deferrals.  Upon termination of the Plan, the Company reserves the discretion to accelerate distribution of each Account to the appropriate Participant in accordance with regulations and other guidance promulgated by the Department of Treasury under Section 409A of the Code.

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article 9
GENERAL PROVISIONS

 

9.1Alienation of Benefits

 

No Account payable under the Plan shall be subject to alienation, sale, transfer, assignment, pledge, attachment, garnishment, lien, levy or like encumbrance.  Neither the Company nor the Plan shall in any manner be liable for or subject to the debts or liabilities of any person entitled to payment under the Plan.

 

9.2Overpayments

 

If any overpayment of an Account is made under the Plan, (a) the amount of the overpayment may be set off against further amounts payable to or on account of the person who received the overpayment until the overpayment has been recovered in full, or (b) the recipient shall be required to return the amount of the overpayment to the Plan Administrator.  The foregoing remedy is not intended to be exclusive.

 

9.3FICA Obligation

 

An Eligible Person’s deferrals of Base Compensation and Bonus payments are subject to taxation under FICA.  The Plan Administrator, without the Eligible Person’s consent, shall withhold the FICA taxes payable by the Eligible Person with respect to these amounts from such Eligible Person’s Base Compensation and Bonus payments that are not deferred.

 

9.4Withholding Taxes

 

The Company and the Plan Administrator shall withhold such taxes and make such reports to governmental authorities as they reasonably believe to be required by law.

 

9.5Distributions to Minors and Incompetents

 

If the Plan Administrator determines that any Participant or Beneficiary receiving or entitled to receive payment of an Account under the Plan is incompetent to care for his or her affairs, and in the absence of the appointment of a legal guardian of the property of the incompetent, payments due under the Plan (unless prior claim thereto has been made by a duly qualified guardian, committee or other legal representative) may be made to the spouse, parent, brother or sister or other person, including a hospital or other institution, deemed by the Plan Administrator to have incurred or to be liable for expenses on behalf of such incompetent.  In the absence of the appointment of a legal guardian of the property of a minor, any minor’s share of an Account under the Plan may be paid to such adult or adults as in the opinion of the Plan Administrator have assumed the custody and principal support of such minor.

 

The Plan Administrator, however, in its sole discretion, may require that a legal guardian for the property of any such incompetent or minor be appointed before authorizing the payment of the Account in such situations.  Benefit payments made under the Plan in accordance with determinations of the Plan Administrator pursuant to this Section 9.5 shall be a complete discharge of any obligation arising under the Plan with respect to such Benefit payments.

 

9.6No Right to Employment

 

Nothing contained in this Plan shall be deemed to give any Employee the right to be retained in the service of the Company or to interfere with the right of the Company to demote, discharge or discipline any Employee at any time without regard to the effect that such demotion, discharge or discipline may have upon the Employee under the Plan.

 

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9.7Unfunded Plan 

 

The Plan shall be an unfunded, unsecured obligation of the Company.  The Company shall not be required to segregate any assets to provide payment of Accounts, and the Plan shall not be construed as providing for such segregation.  Any liability of the Company to any Participant or Beneficiary with respect to the payment of Accounts shall be based solely upon any contractual obligations created by the Plan.  Any such obligation shall not be deemed to be secured by any pledge or other encumbrance or any property of the Company.

 

9.8Trust Fund

 

At its discretion, the Company may establish one or more irrevocable rabbi trusts for the purpose of assisting in the payment of Accounts, provided the establishment of such a trust is not in connection with a change in the financial health of the Company within the meaning of Section 409A of the Code.  Any assets of the Company transferred to such trusts shall not be diverted to the Company, except in the event of the Company’s bankruptcy or insolvency.  To the extent payments provided for under the Plan are made from any such trust, the Company shall not have any further obligation to make such payments.  The establishment and maintenance of any such trust shall not alter the nature of Accounts under the Plan as unfunded and unsecured.

 

The provisions of the Plan shall govern the rights of Participants to receive distributions pursuant to the Plan.  The provisions of the trust shall govern the rights of the Company, Participants and the creditors of the Company to the assets transferred to the trust.

 

9.9Change in Control; Merger or Other Reorganization

 

The Company may assign its obligations under this Plan to a successor, whether by merger, consolidation, asset sale or other business reorganization or transaction (“Business Transaction”) to the extent such assignment would not give rise to imposition of the additional tax under Section 409A of the Code.  Upon a Change in Control, the Plan shall be terminated and all Accounts shall be paid to Participants in a single lump sum in common stock of the Company or its successor.

 

9.10Miscellaneous

 

(a)Construction

 

Unless the contrary is plainly required by the context, wherever any words are used herein in the masculine gender, they shall be construed as though they were also used in the female gender, and vice versa, and wherever any words are used herein in the singular form, they shall be construed as though they were also used in the plural form, and vice versa.   Furthermore, the terms of this Plan shall be construed in accordance with Section 409A of the Code so as to avoid the imposition of the penalty tax under Section 409A, and, in the event of any inconsistency between the Plan and Section 409A of the Code, Section 409A shall control.

 

(b)Severability

 

If any provision of the Plan is held illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if such illegal or invalid provision had never been included in it.

 

(c)Titles and Headings Not to Control

 

The titles to Articles and the headings of Sections in the Plan are for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than the titles or headings, shall control.

 

(d)Complete Statement of Plan

 

This document is a complete statement of the Plan.  The Plan may be amended, modified or terminated only in writing and then only as provided herein.

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9.11Governing Law

 

The Plan shall be governed by ERISA, and to the extent not preempted by ERISA, the laws of the Commonwealth of Virginia without regard to its choice of law provisions.

 

Article 10
DEFINITIONS

 

In addition to those definitions set forth in ARTICLE 1 or otherwise in the text of this Plan, the following terms shall have the meaning assigned below in this ARTICLE 10:

 

10.1“Account” means the book entry account and subaccounts, if any, established under the Plan for each Participant in which shall be reflected all amounts deferred or contributed under the Plan and allocable returns and losses under ARTICLE 5.

 

10.2“Annual Bonus” means, with respect to an Employee, the Employee’s annual incentive bonus payable with respect to services for a calendar year.

 

10.3“Base Compensation” means, the Eligible Person’s base pay payable with respect to services rendered as an Employee during the calendar year (but excluding any amounts paid for employment taxes and remittances to pay premiums under any Company welfare benefit plan), less the elective deferral limit applicable under Section 402(g) of the Code.

 

10.4“Beneficiary” means the person or persons designated by a Participant to receive payment of the amounts provided in the Plan, in accordance with ARTICLE 6, in the event of his or her death.

 

10.5“Bonus” means, with respect to an Eligible Person, the Eligible Person’s Annual Bonus or Long-Term Incentive Award.

 

10.6“Change in Control” shall have the meaning provided in Section 409A of the Code and the rules and regulations thereunder.

 

10.7“Code” means the Internal Revenue Code of 1986, as amended.

 

10.8“Company” means NVR, Inc.

 

10.9“Disability” means that a Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan of the Company.

 

10.10“Employee” means a common law employee of the Company, a Participating Employer or any other employer treated as a single employer with the Company under Section 409A of the Code.

 

10.11“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

10.12“Key Employee” means, for any calendar year, each individual identified by the Company as of September 30 of the immediately preceding calendar year as a “key employee,” as defined under Section 416(i) of the Code, disregarding Section 416(i)(5) of the Code.

 

10.13“Long-Term Incentive Award” means, with respect to a Participant, the Participant's long-term incentive bonus, if applicable, payable with respect to services as an Employee for a period longer than a calendar year.

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10.14“Participant” means an Employee or former Employee who has an Account under the Plan.

 

10.15“Participating Employer” means the Company and all entities which are part of the same "controlled group" as the Company, as determined under Sections 414(b) or (c) of the Code, provided such an entity has adopted the Plan in writing with the consent of the Board.  Non-U.S. entities or subsidiaries shall not be treated as part of the controlled group for this purpose.  A business entity shall be treated as a Participating Employer only while a member of the controlled group that includes the Company.

 

10.16“Plan Administrator” means the Company.

 

10.17“Retirement Age” means age 65.

 

10.18“Separation from Service” means termination of the Participant’s employment relationship (within the meaning of Section 409A of the Code and regulations issued thereunder) with the Company and its affiliates and any other service relationship defined in such applicable regulations, other than by reason of death.  For purposes of the foregoing, whether an entity is affiliated with the Company shall be determined pursuant to the controlled group rules of Section 414 of the Code, as modified by Section 409A of the Code.  However, the Participant’s employment relationship with the Employer shall be treated as continuing intact while the individual is on a military leave, sick leave or other bona fide leave of absence if the period of such leave does not exceed six months (or longer, if required by statute or contract).  If the period of the leave exceeds six months and the Participant’s right to reemployment is not provided either by statute or contract, the employment relationship is deemed to terminate on the first date immediately following such six-month period for purposes of Section 409A of the Code only.

 

10.19“Termination Date” means the date the Participant has a Separation from Service.

 

10.20“Unforeseeable Emergency” means a severe financial hardship to the Participant resulting from an illness or accident to the Participant or the Participant’s spouse, beneficiary, or dependent (as defined in section 152 of the Code); loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, not as a result of a natural disaster); or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.

 

10.21“Valuation Date” means the date or dates as of which Accounts are valued, as set forth in Section 5.3.

*     *     *     *     *

To reflect the adoption of the restated Plan document, dated November 4, 2015, the authorized officer hereby executes this Plan document on behalf of the Company.

 

 

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