During fiscal year 2013,2014, our Board of Directors had four standing committees: the Audit Committee, the Compensation Committee, the Nominating/Corporate Governance Committee, the Compensation Committee and the Finance Committee. Directors are encouraged to attend the annual meeting of stockholders, but are not required to do so. At the last annual meeting of stockholders, held on February 1, 2013,6, 2014, all directors were in attendance. InDuring fiscal year 2013,2014, each director attended at least 75% of the aggregate of all meetingsevery meeting of the Board of Directors and each committee on which he or she served.

Our Board of Directors held sevenfour meetings during fiscal year 2013.2014. The following table shows the current membership of each committee and the number of meetings held by each committee during fiscal year 2013:2014:

Our Board of Directors believes that, separate individuals should holdat this time, it is appropriate for the positions of Chairman of the Board and Chief Executive Officer.Officer to be held by separate individuals. Since theour initial public offering of our common stock(“IPO”) in 1994, (the “IPO”), our Board of Directors has been led by Brian C. Beazer as our Non-Executive Chairman, while management of the Company has been led by oura President and Chief Executive Officer.Officer (“CEO”). We believe thisthe current structure provides for more direct independent oversight of management and more clearly delineates the respective roles of the Board of Directors at the strategic level, and of management at the operational level.

In addition,On November 10, 2014, the Company announced that Mr. Beazer has elected to step down as described under “—our Non-Executive Chairman of the Board, Corporate Governance Practices — Director Independence” below, ineffective immediately following the 2015 annual meeting of stockholders. He will be succeeded by Stephen P. Zelnak, Jr., a current non-employee director, subject to Mr. Zelnak’s re-election to the Board of Directors at the annual meeting. At the unanimous request of the Board, Mr. Beazer will stand for re-election to the Board of Directors at the annual meeting. If elected, he has agreed to serve as a director and as Chairman Emeritus.

Our Board of Directors has adopted a number of measures designed to comply with the requirements of the Sarbanes-Oxley Act, rules and regulations of the SEC interpreting and implementing the Sarbanes-Oxley Act and the NYSE Standards, as well as other measures that our Board of Directors believes are corporate governance best practices. The measures adopted by our Board of Directors that we believe are most significant are described below.

Our by-lawsBylaws and Corporate Governance Guidelines provide a majority voting standard for the election of directors in uncontested elections. Director nominees will be elected if the votes cast for such nominee exceed the number of votes cast against such nominee. In the event that (i) a stockholder proposes a nominee to compete with nominees selected by our Board of Directors, and the stockholder does not withdraw the nomination prior to our mailing the notice of the stockholders meeting, or (ii) one or more directors are nominated by a stockholder pursuant to a solicitation of written consents, then directors will be elected by a plurality vote.

Our Corporate Governance Guidelines provide that our Board of Directors will only nominate candidates who tender their irrevocable resignations, which are effective upon (i) the candidate not receiving the required vote at the next annual meeting at which they face re-election and (ii) our Board of Directors accepting the candidate'scandidate’s resignation. In the event that any director does not receive a majority vote, then our Corporate Governance Guidelines provide that our Nominating/Corporate Governance Committee will act on an expedited basis to determine whether to accept the director'sdirector’s resignation and will submit its recommendation to our Board of Directors. In deciding whether to accept a director'sdirector’s resignation, our Board of Directors and our Nominating/Corporate Governance Committee may consider any factors that they deem relevant. Our Corporate Governance Guidelines also provide that the director whose resignation is under consideration will abstain from the deliberation process. All candidates standing for re-election at the annual meeting have tendered irrevocable resignations.

Effective risk oversight is a priority of our Board of Directors. Both the full Board of Directors and its committees oversee the various risks we face. Management is responsible for the day-to-day management of our risks and provides periodic reports to the Board of Directors and its committees relating to those risks and risk-mitigation efforts. All committees report on the risk categories they oversee to the full Board of Directors on an as needed basis.

Our Board of Directors has delegated primary responsibility for overseeing our risk management process to the Audit Committee. The Audit Committee oversees our risk identification and mitigation processes and specifically oversees management of our financial, legal, fraud and ethics policies as well as our regulatory compliance risks. This includes regular evaluation of risks related to the Company'sCompany’s financial statements, including internal controls over financial reporting. Members of our management, including our Chief Financial Officer, General Counsel, Compliance Officer and Director of Internal Audit, report to the Audit Committee on a quarterly basis regarding the on-going risk management activities. The Audit Committee also oversees the internal audit function and independent auditors, and meets separately on at least a quarterly basis with the Compliance Officer, Director of Internal Audit and representatives of our independent auditingregistered public accounting firm as part of this oversight responsibility.

The Compensation Committee oversees our risks related to compensation programs and philosophy. The Compensation Committee ensures that our compensation programs, including those applicable to our executives, do not encourage excessive risk taking. The Compensation Committee works periodically with its independent compensation consultant to ensure that ourstructure executive compensation plans that are appropriately balanced and incentivize management to act in the best interest of our stockholders.

The Finance Committee oversees our risks relating to liquidity, capital structure and investments, including land acquisition and development. The Finance Committee, as well as the Board of Directors as a whole, reviews our long-term strategic plans, annual budget, capital commitments, cash needs and funding plans. As with other risks, management is responsible for the day-to-day management of the risks relating to liquidity and investments as well as land acquisition and development, while our Board of Directors takes an oversight role with respect to those risks.

The Nominating/Corporate Governance Committee oversees our Board and committee composition as well as risks relating to governance matters. The Nominating/Corporate Governance Committee also oversees our ethics program, including implementation of our Code of Business Conduct and Ethics, and compliance by directors and management with the corporate governance and ethics standards of the Company.

We have previously analyzed the compensation plans of employees in positions that could bewe considered to have the potential to create risks reasonably likely to have a material adverse effect on us, including our executive and senior corporate officers, senior management in our divisions and regional accounting centers, and our divisional sales management and sales force.NEOs.  We then reviewed the compensation plans of these groups of employees against risk factors established by widely recognized sources.  As described in more detail below under “Compensation Discussion and Analysis,” for fiscal years 20132014 and 2014,2015, long-term compensation programs for our named executive officersNEOs have been structured such that a greater portion of long-term compensation is linked to our long-term relative and absolute performance. This model of linking long-term compensation to our performance applies not only to our named executive officers,NEOs, but has also been applied to senior corporate officers, as well as senior management in our divisionsdivisions. In addition, undue risk that may be associated with NEO compensation is mitigated through the utilization of caps on incentive payouts, the use of multiple performance measures for incentive plans, a compensation clawback policy, stock ownership guidelines and regional accounting centers.the Compensation Committee’s ability to exercise negative discretion in determining incentive payouts. We believe that our compensation plans reflect sound risk management practices and do not encourage excessive or inappropriate risk taking.

The NYSE Standards require that our Board of Directors be comprised of a majority of independent directors. The Sarbanes-Oxley Act and rules of the SEC require that the Audit Committee be comprised solely of independent directors. The NYSE Standards further require that the Compensation and Nominating/Corporate Governance Committees also be comprised solely of independent directors. Our Board of Directors has affirmatively determined that Laurent Alpert, Elizabeth S. Acton, Brian C. Beazer, Peter G. Leemputte, Norma A. Provencio, Larry T. Solari and Stephen P. Zelnak, Jr. had no material relationship with the Company other than their relationship as members of our Board of Directors and were independent within the meaning of the Sarbanes-Oxley Act and the NYSE Standards.

In making these determinations, our Nominating/Corporate Governance Committee, with assistance from our General Counsel, evaluated responses to an independence and qualification questionnaire completed annually by each director and follow-up inquiries made to certain directors. In the case of Mr. Solari, the responses to the questionnaire indicated that we have purchased an immaterial amount of goods from certain companies (or their subsidiaries) of which Mr. Solari is a director. Our Board of Directors affirmatively determined that the relationship was not material either to us or to these companies. Based on the foregoing, our Board of Directors had a majority of independent directors and each of the Audit, Nominating/Corporate Governance and Compensation committees of our Board of Directors during fiscal year 20132014 were comprised entirely of independent directors. It is expected that the majority of directors and all members of such committees in fiscal year 20142015 will be independent as well. Accordingly, during fiscal year 2013,2014, we were in compliance with the requirements of the NYSE and the SEC for director independence, and we will continue to be in compliance during fiscal year 2014.2015.

In accordance with the NYSE Standards, our Board of Directors typically holds an executive session of non-management directors as a part of every regularly scheduled meeting of our Board of Directors. These executive sessions are chaired by Mr. Beazer asthe Non-Executive Chairman of our Board of Directors. In addition, our Board of Directors holds at least one meeting annually at which the independent directors meet alone, (withoutwithout our Chief Executive Officer orCEO present. In view of the anticipated transition in the Non-Executive Chairman present), chaired by our lead independent director, which is currentlyposition from Mr. Solari. These provisions are included in our Corporate Governance Guidelines adopted byBeazer to Mr. Zelnak on February 4, 2015, our Board of Directors. It is the expectation of both our Nominating/Corporate Governance Committee and our independent directors thathas determined to eliminate the position of lead director on such date. After that date, it is anticipated that Mr. Zelank will chair the annual meeting of our independent director will rotate among the independent directors, as appropriate.directors.

Security holders and interested parties wishing to communicate directly with our Non-Executive Chairman or any sub-group of our independent directors may do so by directing their communications to the ethics hotline described below and specifically asking the operator to direct their concerns to our Non-Executive Chairman or such independent directors, as desired.

Upon the advice and recommendation of our Nominating/Corporate Governance Committee, our Board of Directors has adopted a set of Corporate Governance Guidelines. The Corporate Governance Guidelines address an array of governance issues and principles including director qualifications and responsibilities, access to management personnel and independent advisors, director compensation, director orientation and continuing education, management succession, annual performance evaluations of our Board of Directors and meetings of independent directors.

We maintain a Code of Business Conduct and Ethics applicable to all directors, officers and employees that complies with the NYSE Standards. Our employees are also subject to additional specific policies, guidelines and Company rules adopted from time to time governing particular types of conduct or situations. Such additional policies, guidelines or rules are supplemental to our posted Code of Business Conduct and Ethics, and in the case of any inconsistency between the two, employees are expected to comply with the Code of Business Conduct and Ethics. On an annual basis, each of our directors, officers and employees is required to undergoparticipates in an ethics training program and provideprovides an acknowledgment that he or she has received and reviewed our Code of Business Conduct and Ethics.

In November 2011, our Compensation CommitteeCompany reinstituted a named executive officer and outside director stock ownership policy to more closely align the interests of our named executive officersNEOs and directors with those of our stockholders. The stock ownership policy requires each named executive officerNEO to own the lesser of either a multiple of base salary (or, for directors, annual retainer) or a fixed number of shares (set at policy adoption). Named executive officers and directors have five years from adoption of the policy to comply with the ownership requirements. In connection with the adoption of athe stock ownership policy, our Compensation Committee also adopted a stock holding period that requires named executive officersNEOs and directors to hold 50% of net after-tax shares issued upon vesting of restricted stock or exercised stock options until their required respective stock ownership levels are achieved. Once an individual achieves the stock ownership requirement, the holding periodretention requirement will no longer apply.

OurIn 2011, our Compensation Committee has adopted an incentive compensation clawback policy that would enable the Company to clawback all or a portion of incentive compensation in the event an individual'sindividual’s misconduct causes the Company to have to issue a restatement of its financials, to the extent that individual'sindividual’s incentive compensation was based on the misstated financials. For additional information see “Compensation Discussion and Analysis — Various Compensation Policies — Compensation Clawback Policy.”

In addition, subject to stockholder approval of theAwards under our 2014 Long-Term Incentive Plan at the annual meeting, awards under the 2014 Plan will beare subject to our existing clawback policy and any other clawback policy adopted by the Compensation Committee, from time to time, including clawback policies to comply with Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and Section 304 of the Sarbanes-Oxley Act. Under the 2014 Long-Term Incentive Plan, the Compensation Committee may also provide for recoupment or forfeiture of awards if a participant engages in “detrimental activity” with respect to the Company. See “Proposal 4

As described in further detail under “Executive Compensation — ApprovalPotential Payments Upon Termination or Change of Control — Employment Agreements,” in September 2014, Long-Term Incentive Plan — Plan Summary — Clawback Policies.”we entered into new employment agreements with each of our NEOs. Under the new employment agreements, any incentive compensation that is paid or granted to the NEOs will be subject to recoupment under the terms of any clawback policy of the Company.

Our Nominating/Corporate Governance Committee will consider candidates recommended to our Board of Directors by our stockholders. Stockholder recommendations must be addressed to: Beazer Homes USA, Inc., Attention: Chair, Nominating/Corporate Governance Committee, 1000 Abernathy Road, Suite 260, Atlanta, Georgia 30328. If the Nominating/Corporate Governance Committee determines to nominate a stockholder-recommended candidate, then that nominee'snominee’s name will be included in the proxy statement for the next annual meeting. Our stockholders also have the right under our by-lawsBylaws to directly nominate director candidates at an annual meeting by following the procedures outlined in our by-laws.Bylaws.

Pursuant to our Corporate Governance Guidelines, our Nominating/Corporate Governance Committee is directed to work with our Board of Directors on an annual basis to determine the appropriate characteristics, skills and experience for each director and for our Board of Directors as a whole. In evaluating these issues, our Nominating/Corporate Governancethe Committee and our Board of Directors take into account many factors, including the individual director'sdirector’s general understanding of accounting, marketing, finance and other elements relevant to the success of a large publicly-traded company, in today's business environment, understanding of our business on an operational level, education or professional background and willingness to devote time to Board of Director duties. While our Board of Directors does not have a specific diversity policy, it considers diversity of race, ethnicity, gender, age and professional accomplishments in evaluating director candidates. Each individual is evaluated in the context of our Board of Directors as a whole, with the objective of recommending a group of nominees that can best promote the success of the business and represent stockholder interests through the exercise of sound judgment based on diversity of experience and background.

If a director candidate were to be recommended by a stockholder, our Nominating/Corporate Governance Committee expects that it would evaluate such candidate in the same manner it evaluates director candidates identified by the Nominating/Corporate Governancesuch Committee.

The members of our Compensation Committee during fiscal year 20132014 were Messrs. Solari, Leemputte and ZelnakSolari and Ms. Provencio. (In February 2013, Mr. Leemputte joined, and Mr. Zelnak departed from, the Compensation Committee.) None of the members of our Compensation Committee has ever been an officer or employee of the Company or any of our subsidiaries. None of the members of our Compensation Committee had any relationship requiring disclosure under “Transactions with Related Persons.” During fiscal year 2013,2014, none of our executive officers served as a director or member of the compensation committee (or other committee of the Boardboard of Directorsdirectors performing equivalent functions) of another entity nor didthat had an executive officer of such other entity serveserving on our Board of Directors.

Section 16(a) of the Exchange Act requires our executive officers and directors and persons who own more than 10% of our stock, as well as certain affiliates of such persons, to file initial reports of ownership and changes of ownership with the SEC and the NYSE.SEC. These parties are required to furnish us with copies of the reports they file. Based solely on a review of the copies of the Section 16(a) reports and amendments thereto received byknown to us, we believe that all reports required pursuant to Section 16(a) for fiscal year 20132014 were timely filed by our executive officers and directors.

 

Set forth below are certain highlights of our current compensation practices. These practices include those adopted in an effort to drive the Company'sCompany’s performance, as well as certain practices the Company has not adopted because itthe Committee does not believe these practices would serve the long-term interests of our stockholders.

The principal responsibilities of the Committee include:

The customer-related component of the 20132014 Bonus Plan comprised 25% of the overall annual bonus opportunity, and focused on maintaining a high level of customer satisfaction quality and safety in building practices, andachieving excellent sales performance in our new and close-out communities. In order for an NEO to earn the full award under this component, of the 2013 Bonus Plan, the Committee required (i) the Company to achieve a specified customer experience score above 70 on its Customer Experience Index (10%as surveyed by an independent third party (12.5% of the overall bonus opportunity) and a score above 8.5 on a quality index established and scored by an independent third party (10% of the overall bonus opportunity). For fiscal year 2013, the Company achieved a Customer Experience Index above 70 and a quality index score above 8.5. The final goal under the customer-related component required(ii) all newly-opened communities to achieve four net sales within 30 days of grand opening and all close-out communities to sell out in 30 days (5%(12.5% of the overall bonus opportunity). The

In fiscal year 2012 and prior years, equity awards made up all or substantially all of the long-term incentive compensation opportunity for our NEOs. However, during the process of designing the executive compensation program for fiscal year 2013, the Committee determined that an insufficient number of shares remained available for issuance under the Company's 2010 Equity Incentive Plan if prior grant levels were continued. In developing the fiscal year 2013maintained. Such grant levels were determined to be necessary to maintain target long-term incentive compensation program,opportunities at an appropriate level. At that time, the Committee decided that, rather than seek stockholder approval for an increase in available shares, at that time, it would use the remaining shares available for issuance under the 2010 Equity Incentive Plan to make equity grants in fiscal years 2013 and 2014 in amounts consistent with prior grant levels to eligible non-NEO employees. As a result, a number of equity awards were shifted away from our NEOs. The Committee determineddecided to make up the shortfall in long-term compensationreduced level of equity for NEOs which remained targeted at the bottom quartile of peer companies, through implementation of a long-

In order to emphasize the strategic priority of returning to sustainable profitability, the 2014 Performance Cash Plan was designed to reward growth in revenue and gross margin, during fiscal year 2013 were noteworthy,which the Committee recognizes that there must berecognized as crucial to this goal, measured at the end of a continued focus on improving sales velocity and gross margin to achieve sustainable profitability. For this reason, the Committee determined to continue utilizing a set of gross margin improvement targets for the 2014 Cash LTIP that are linked to revenue improvement in an effort to ensure that our NEOs are motivated not just to increase sales, but to do so without sacrificing gross margin over the next three years.

Each NEO'sNEO’s award payment under the 2014 Performance Cash LTIPPlan will be calculated as follows:

The matrixtable below illustratesshows the impact that certain three-year revenue CAGRs combined with gross margin percentage improvements can have on generating gross margin dollars.