SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities

Exchange Act of 1934

(Amendment No.     )

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NVR, INC.

(Name of Registrantregistrant as Specifiedspecified in Its Charter)

its charter)

(Name of Person(s) Filing Proxy Statementperson(s) filing proxy statement, if other than the Registrant)

registrant)

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LOGO

(NVR LOGO)
NVR, INC.

11700 Plaza America Drive

Reston, VA 20190

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To be held on Tuesday, May 4, 2010
7, 2013

11:30 A.M. Eastern Time

NVR, Inc. will hold its Annual Meeting of Shareholders at 11:30 A.M. (Eastern Time) on Tuesday, May 4, 2010.7, 2013. We will hold the meeting at our corporate headquarters located at 11700 Plaza America Dr.,Drive, Suite 500, Reston, Virginia, 20190.

We are holding the meeting for the following purposes:

 1.To elect fourthirteen directors from the nominees for director to serve three year terms and until their successors are duly elected and qualified;named in the attached proxy statement;

 2.To ratify the appointment of the accounting firm of KPMG LLP as our independent auditor for the year ending December 31, 2010;2013;

 3.To approve a management proposalconsider and act on an advisory vote regarding the approval of compensation paid to amend our Restated Articles of Incorporationcertain executive officers; and Bylaws to declassify the Board of Directors and establish annual elections, whereby all directors would stand for re-election annually;

 4.To approve the proposal to adopt the NVR, Inc. 2010 Equity Incentive Plan, which authorizes us to grant options and restricted share units to our employees to acquire an aggregate of 700,000 shares of NVR common stock; and
5.To transact other business that may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting.

The above items are fully described in the proxy statement, which is part of this notice. We have not received notice of any other matters that may properly be presented at the meeting.

Only shareholders of record at the close of business on March 5, 20108, 2013 will be entitled to vote at the meeting. Whether or not you plan to attend the meeting, you are urged to date and sign the enclosed proxy card and return it promptly in the accompanying envelope. You are invited to attend the meeting in person. If you do attend the meeting, you may withdraw your proxy and vote in person.

 
 By order of the Board of Directors,
 
 (SIGNATURE LOGO)  

LOGO

 
 James M. Sack
March 22, 201025, 2013 Secretary and General Counsel

NVR, INC.

11700 Plaza America Drive

Suite 500

Reston, VA 20190

PROXY STATEMENT

This Proxy Statement, Proxy Cardproxy card and the Annual Report for the year ended December 31, 20092012 are being mailed to our shareholders on or about March 22, 201025, 2013 in connection with the solicitation on behalf of the Board of Directors of NVR, Inc., a Virginia corporation, of proxies for use at our Annual Meeting of Shareholders. The Annual Meeting will be held on Tuesday, May 4, 2010,7, 2013, at our corporate headquarters located at 11700 Plaza America Dr.,Drive, Suite 500, Reston, Virginia, 20190, at 11:30 A.M., Eastern Time, and at any and all postponements and adjournments thereof. Shareholders should contact NVR’s Investor Relations Department at the same address to obtain directions to be able to attend the Annual Meeting in person.

We bear the cost of proxy solicitation, including expenses in connection with preparing, assembling and mailing the proxy solicitation materials and all papers accompanying them. We may reimburse brokers or persons holding shares in their names or in the names of their nominees for their expenses in sending proxies and proxy material to beneficial owners. In addition to solicitation by mail, certain of our officers, directors and regular employees, who will receive no extra compensation for their services, may solicit proxies by telephone, facsimile transmission, internet or personally. We have retained Georgeson Inc. to assist in the solicitation of brokers, bank nominees and institutional holders for a fee of approximately $4,500$5,000 plus out-of-pocket expenses.

All voting rights are vested exclusively in the holders of our common stock, par value $.01 per share (the “Common Stock”). Only shareholders of record as of the close of business on March 5, 20108, 2013 (the “Record Date”) are entitled to receive notice of and to vote at the Annual Meeting. Shareholders include holders (the “Participants”) owning stock in our Profit Sharing Trust Plan and Employee Stock Ownership Plan (together, the “Plans”).

The accompanying proxy card should be used to instruct the persons named as the proxyproxies to vote the shareholder’s shares in accordance with the shareholder’s directions. The persons named in the accompanying proxy card will vote shares of Common Stock represented by all valid proxies in accordance with the instructions contained thereon. In the absence of instructions, shares represented by properly executed proxies will be votedvoted:

FORthe election of those four persons designated hereinafter asthe thirteen director nominees, for Class II of our directors,

FORthe ratification of KPMG LLP as our Independent Auditor for 2010,2013,

FORthe proposaladvisory vote on compensation paid to approve amendments to our Restated Articles of Incorporationcertain executive officers, and Bylaws to declassify the Board of Directors,FORthe proposal to adopt the NVR, Inc. 2010 Equity Incentive Plan and

in the discretion of the named proxies with respect to any other matters presented at the Annual Meeting.

With respect to the tabulation of proxies for the election of directors, the ratification of the appointment of KPMG LLP as our independent auditor and approval of the NVR, Inc. 2010 Equity Incentive Plan,advisory vote on compensation paid to certain executive officers, abstentions and broker non-votes are counted for the purpose of establishing a quorum, but are not counted in the number of votes cast and will have no effect on the result of the vote. For purposes of the proposal to amend our Restated Articles of Incorporation and Bylaws to declassify the Board of Directors, abstentions and broker non-votes will have the effect of a vote against that proposal. In addition, under the current New York Stock Exchange’sExchange (the “NYSE”) rules, most intermediaries that do not receive

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voting instructions from their customers who hold NVR common stockCommon Stock may not vote the shares

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they hold on behalf of those customers on any of the proposals other than ratification of the appointment of KPMG LLP as our independent auditor. Accordingly, we strongly encourage all of our shareholders who hold shares of NVR common stockCommon Stock in a brokerage account or through a bank, trust or other nominee, to provide voting instructions to their broker, bank, trustee or other nominee to assure that their shares are voted at the Annual Meeting.

Any shareholder may revoke his or her proxy at any time prior to its use by 1) providing our Secretary, at 11700 Plaza America Drive, Suite 500, Reston, Virginia 20190, written notice of revocation, 2) duly executing a proxy bearing a later date than the date of the previously duly executed proxy, or 3) by attending the Annual Meeting and voting in person.person (attendance at the Annual Meeting alone will not act to revoke a prior proxy). Execution of the enclosed proxy will not affect your right to vote in person if you should later decide to attend the Annual Meeting.

The proxy card also should be used by Participants to instruct the trustee of the Plans how to vote shares of Common Stock held on their behalf. The trustee is required under the applicable trust agreement to establish procedures to ensure that the instructions received from Participants are held in confidence and not divulged, released or otherwise utilized in a manner that might influence the Participants’ free exercise of their voting rights. Proxy cards representing shares held by Participants must be returned to the tabulator by April 29, 2010May 2, 2013 using the enclosed return envelope and should not be returned to us.NVR. If shares are owned through the Plans and the Participant does not submit voting instructions by April 29, 2010,May 2, 2013, the trustee of the Plans will vote such shares in the same proportion as the voting instructions received from the other Participants. Participants who wish to revoke a proxy card will need to contact the trustee and follow its instructions.

As of the Record Date, we had a total of 6,124,1084,996,384 shares of Common Stock outstanding, each share of which is entitled to one vote. The presence, either in person or by proxy, of persons entitled to vote a majority of the outstanding Common Stock is necessary to constitute a quorum for the transaction of business at the Annual Meeting. Under our Restated Articles of Incorporation and Bylaws, holders of Common Stock are not entitled to vote such shares on a cumulative basis, including with respect to the voting for directors.

Important Notice Regarding the Availability of Proxy Materials for the

Shareholder Meeting to Be Held on May 4, 2010:

7, 2013:

This Proxy Statement and our Annual Report for the year ended December 31, 20092012 are available at www.edocumentview.com/nvr.

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ELECTIONOF DIRECTORS

Election of Directors
(Proposal 1)
     Our Board of Directors, or the “Board,” is currently divided into three classes, the classes being as equal in number as possible. At the 2010 Annual Meeting, the following persons constituting Class II of the directors have been nominated by the Board of Directors to be elected to hold office for a three year term ending 2013 and until their successors are duly elected and qualified:
Manuel H. Johnson
David A. Preiser
John M. Toups
Paul W. Whetsell

Our Restated Articles of Incorporation state that the number of directors on our Board will be no less than seven and no more than thirteen, as established from time to time by Board resolution. Our Board has currently set the size of the Board at eleventhirteen members.

     Mssrs. Johnson, Preiser, Toups The following persons have been nominated by the Board of Directors to be elected to hold office for a one-year term ending at the 2014 Annual Meeting and until their successors are duly elected and qualified:

Dwight C. ScharAlfred E. FestaWilliam A. Moran
C. E. AndrewsEd GrierDavid A. Preiser
Robert C. ButlerManuel H. JohnsonW. Grady Rosier
Timothy M. DonahueMel MartinezPaul W. Whetsell
Thomas D. Eckert

All of the director nominees are current directors standing for reelection.re-election, except Mssrs. Grier and Martinez. Mr. Martinez was appointed as a director on December 1, 2012 and is standing for election by our shareholders for the first time. Mr. Grier has been nominated by the Board of Directors to be elected as a director at the 2013 Annual Meeting. Mr. Schar, NVR’s Chairman, recommended Mssrs. Grier and Martinez to the Nominating Committee for consideration as directors. Each nominee has consented to serve as one of our directors if elected. Our Board of Directors has affirmatively determined that each of our Board of Directors’the proposed nominees is independent.independent, with the exception of Mssrs. Schar and Moran. Our Board does not contemplate that any of its proposed nominees listed above will be unwilling to serve or become unavailable for any reason, but if any such unavailabilitycircumstance should occur before the Annual Meeting, proxies may be voted for another nominee selected by the Board of Directors.

     If shareholders approve Proposal 3 to amend Detailed biographies of each of the Restated Articles of Incorporation and Bylaws to declassify the Board, all of our directors would stand for re-election annuallydirector nominees may be found beginning at the 2011 Annual Meeting.
on page 7.

Required Vote

Each director shall be elected by a majority of the votes cast by the shares entitled to vote in the election at the Annual Meeting, assuming that a quorum is present. A majority of the votes cast means that the number of shares voted “for” a director must exceed the number of shares voted “against” that director. Unless marked otherwise, proxies received will be votedFORthe election of those four personsthe thirteen nominees designated above as nominees for Class II of our directors.above. Shareholders may abstain from voting for any particular nominee by so indicating in the space provided on the attached proxy card. An abstention will not be counted as a vote cast “for” or “against” a director’s election.

Pursuant to our Corporate Governance Guidelines, the Board expects a director to tender his or her resignation if he or she fails to receive the required number of votes for re-election. Under the Guidelines, the Board shall nominate for election or re-election as a director only candidates who agree to tender their resignation if they fail to receive the required number of votes for re-election. In addition, the Board shall fill director vacancies and new directorships only with candidates who agree to tender their resignation if they fail to receive the required number of votes for re-election.

     The

If a director fails to be re-elected by a majority of votes cast, the Nominating Committee shall promptly consider the resignation offer of any such director and recommend to the Board whether to accept the tendered resignation or reject it. The Board shall take action with respect to the Nominating Committee’s recommendation no later than 90 days following the submission of any such resignation offer.

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Following the Board’s action regarding the Nominating Committee’s recommendation, the Company shall promptly file a Current Report on Form 8-K with the Securities and Exchange Commission (the “SEC”) which shall detail the Board’s decision regarding a tendered resignation. This disclosure shall include an explanation of the process by which the Board’s decision was reached and the reasons for the Board’s decision.

To the extent that one or more directors’ resignations are accepted by the Board, the Nominating Committee will recommend to the Board whether to fill the vacancy or vacancies or to reduce the size of the Board.

The Board expects that any director who tenders his or her resignation pursuant to this Policypolicy will not participate in the Nominating Committee recommendation or Board action regarding whether to accept or reject the tendered resignation. If, however, a majority of the members of the Nominating Committee fails to receive the required number of votes for re-election in the election, the independent directors who did not fail to receive the required number of votes for re-election in the election shall form a committee amongst themselves for the purposes of evaluating the tendered resignations and recommending to the Board whether to accept or reject them.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING “FOR” ALL OF THE FOREGOING NOMINEES AS
DIRECTORS OF NVR

NVR.

CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS

We are committed to having sound corporate governance principles and practices. Having and acting on that commitment is essential to running our business efficiently and to maintaining our integrity in the marketplace. Our primary corporate governance documents, including our Corporate Governance Guidelines, Code of Ethics and all of our Board of Directors’ Committee Charters, are available to the public on our internet website at http://www.nvrinc.com.

www.nvrinc.com.

Board Leadership Structure, Committee Composition and Role in Risk Oversight

Board Leadership Structure

     Our Restated Articles of Incorporation state that the number of directors on our Board will be no less than seven and no more than thirteen, as established from time to time by Board resolution. Our Board has currently set the size of the Board at eleven members.

Dwight C. Schar, our chairman and a non-management director, leads our Board, which meets at least quarterly. In addition, our Corporate Governance Guidelines require that each year our Board namehas named an independent lead director to chair meetings of our independent directors. The independent directors of our Board meet as a group at least annually. Non-management directors meet as a group at least twice a year. Our independent lead director position rotates annually among the chairs of the Audit, Compensation, Corporate Governance and Nominating Committee chairmen.Committees. The independent lead director chairs any meetings held by the independent directors. John M. Toups,Manuel H. Johnson, the Chairman of our CompensationAudit Committee, served as our independent lead director for calendar year 2009. Robert C. Butler,2012. Thomas D. Eckert, the Chairman of our Corporate GovernanceCompensation Committee, assumed the independent lead director role for the 20102013 calendar year. Effective February 4, 2009, Mr. Schar relinquished his executive officer title but remains as the Chairman of the Board. As a result, since that date, ourOur Board is comprised solely of non-management directors. Interested parties can

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obtain the methodInformation regarding how to communicate with the lead director or the non-management or independent directors as a group is available on our website at http://www.nvrinc.com.
www.nvrinc.com.

In June 2005, we separated the roles of the Chairman of the Board and the Chief Executive Officer. Mr. Schar continues to performserve as the Chairman, and Paul C. Saville is currently the CEO. We separated the roles at that time because we believed it was a leading corporate governance best practice to reduce the concentration of power forin one person performing both roles and it allowed us to strengthen our senior management team as we positioned NVR for expected future growth. In addition, transferring the operational day to

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day management functions to Mr. Saville enabled Mr. Schar to spend more time developing long term strategies and it allowed him more time to recruitrecruiting new Board of Director candidates. Those same reasons hold true today. As a result, while the Board retains the discretion to combine the roles of Chairman and CEO at any time, we expect that the roles of the Chairman and the CEO will remain separated for the foreseeable future.

Board Committee Composition

Our Board has the following six committees: Audit, Compensation, Corporate Governance, Executive, Nominating, and Qualified Legal Compliance. Each committee, other than the Executive Committee, meets at least annually to review its charter. During 2009,2012, the full Board of Directors met seven times, the Audit Committee met six times, the Compensation Committee met fivesix times, the Nominating Committee met three times, the Corporate Governance Committee met twice,three times and the Qualified Legal Compliance Committee met once. The Executive Committee did not meet during 2009.2012. Our non-management directors met twice during 20092012 in executive session without the presence of management, and the independent directors met once. Each of our Board members attended at least 75% of our Board meetings and their respective Committee meetings during 2009.2012. Further, each of our Board members and each then-standing director attended the 20092012 Annual Meeting of shareholders.Shareholders. Our Board requires that our Board members attend each Board and Committee meeting in person. Our Board of Directors further requires that all current Board members and all nominees for election to our Board of Directors put forth in our proxy statement by our Board attend in person our annual meeting of shareholders, unless personal circumstances affecting such Board member or director nominee make such attendance impractical or inappropriate.

Board Role in Risk Oversight

Our Board provides constant oversight of our business risks and operational performance through regularly scheduled Board and Committee meetings, as well as through frequent and informal communications between management and the Board. Further, our Bylaws and each of the various Board Committee Charters (referenced above and discussed in detail below) provide additional detail regarding the areas, duties and functions for which the Board or a Board Committee provides specific oversight of specified areas of risk.

That oversight includes a variety of operational and regulatory matters, including: the approval of the annual business plan and the periodic review of our actual performance in comparison to the approved plan, approval of all short-term and long-term management incentive compensation plans, review and analysis of our operational and financial performance compared to our peer group, review of our five year business plan, review of management succession planning throughout our entire organization for key management positions, a review of our response to new laws, rules or regulations to which we are subject, direct oversight of our internal audit function and our whistleblower hotline and many other items. Following is a discussion of how the Board oversees certain of our more significant business risks:

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Land Acquisition:
     Our

We believe our continued success is contingent upon our ability to control an adequate supply of finished lots on which to build. We expend substantial monetary resources to place deposits under lot acquisition contracts, typically ranging up to 10% of the aggregate purchase price of the finished lots. The lot acquisition policy under which management operates is a Board-approved policy. The policy requires Board pre-approval of any lot acquisition contract that is above certain parameters set by the Board, measured by the aggregate size of the deposit or investment to be made. The policy also includes the parameters under which we can acquire zoned, unimproved raw land. Further, all related-party lot acquisition contracts require Board approval (seeTransactions with Related Personsbelow).

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Liquidity:

Being in a cyclical industry, it is imperative that we focus on our liquidity needs throughout the various stages of the cycle, while maintaining an efficient capital structure. The Board’s role in ensuring that Managementmanagement prudently manages itsour cash includes the following:

We invest our excess cash pursuant to a Board-approved policy that specifies the types of investments allowed. The primary objective of the policy is to minimize risk and to adequately provide for daily liquidity needs.

•We invest our excess cash pursuant to a Board-approved policy that specifies the types of investments allowed. The primary objective of the policy is to minimize risk and to adequately provide for daily liquidity needs.
•Stock repurchase programs and debt repurchases must be pre-approved by the Board.
•All capital transactions for the issuance of debt or equity must be pre-approved by the Board.
•The Board reviews our long-term cash needs in connection with their review of our five year business plan.

Stock repurchase programs and debt repurchases must be pre-approved by the Board.

All capital transactions for the issuance of debt or equity must be pre-approved by the Board.

The Board reviews our short-term and long-term cash needs in connection with its review of our one year and five year business plans.

Financial Reporting, Internal Control and Regulatory Matters:

Our Audit Committee takes a lead role in overseeing a number of risks that we face as enumerated within its Charter.

•Our Internal Audit function performs a primary role in risk management. Our Vice President of Internal Audit and Corporate Governance reports directly to the Audit Committee, and the Audit Committee formally approves the annual internal audit budget and staffing.
•Our annual internal audit plan is reviewed with and approved by the Audit Committee. It is prepared using a comprehensive risk-based approach in the following areas: Finance and Accounting; Homebuilding Operations; Mortgage and Settlement Services Operations; Manufacturing Operations; Human Resources; Legal; and Information Technology. The entire risk matrix (which includes the major individual risks identified, each risk’s rating of low, medium or high, whether the area is currently audited by internal audit, and what other risk mitigation techniques are present) is reviewed in detail with the Audit Committee.
•On a quarterly basis, Internal Audit Senior Management and our external independent auditors each have a private session with the Audit Committee without the presence of Management.

Our Internal Audit function performs a primary role in risk management. Our Vice President of Internal Audit and Corporate Governance reports directly to the Audit Committee, and the Audit Committee formally approves the annual internal audit budget and staffing.

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Our annual internal audit plan is reviewed with and approved by the Audit Committee. It is prepared using a comprehensive risk-based approach.

On a quarterly basis, Internal Audit Senior Management and our external independent auditors each have a private session with the Audit Committee without the presence of Management.

Management reports to the Audit Committee the occurrence of any governmental regulatory reviews or audits conducted on any of our operations, including mortgage regulatory matters and SEC comment letters. The Audit Committee also obtains a report from Management at the conclusion of any such review.

•Management reports to the Audit Committee the occurrence of any governmental regulatory reviews or audits conducted on any of our operations, including mortgage regulatory matters and SEC comment letters. The Audit Committee also obtains a report from Management at the conclusion of any such review.
•Management reports to the Audit Committee any matter concerning a violation of our Code of Ethics or our Standards of Business Conduct.

Management reports to the Audit Committee any matter concerning a violation of our Code of Ethics or our Standards of Business Conduct.

Related Party Transactions:

Our Bylaws require that the disinterested, independent members of the Board approve any related party transaction. This has been a requirement since we incorporated in 1993.

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Board Member Information

The following sets forth certain pertinent information with respect to our current directors, including the nominees listed above.

director nominees.

Name

  

Age

  

Year First Elected or Appointed/

Term Expires

NameAgeTerm Expires

Dwight C. Schar (3*)

  6871  1993/20112013

C. E. Andrews (1) (5) (6)

  612008/2013

Robert C. Butler (1) (5*) (6)

822002/2013

Timothy M. Donahue (3) (4)

642006/2013

Thomas D. Eckert (2*) (**)

652011/2013

Alfred E. Festa (1) (4) (6)

532008/2013

Ed Grier

  58  2008/2011N/A
Robert C. Butler (1) (4) (5*) (6) (**)792002/2011
Timothy M. Donahue (2) (4)612006/2012
Alfred E. Festa (1) (4) (6)502008/2012

Manuel H. Johnson (1*) (2)(3) (6*)

  6164  1993/20102013

Mel Martinez (4)

  662012/2013

William A. Moran (3)

  6366  1993/20122013

David A. Preiser (2) (4*)

  5355  1993/20102013

W. Grady Rosier (2) (5)

  6164  2008/20122013

John M. Toups (2*) (3)(2) (5)

  8487  1993/20102013

Paul W. Whetsell (2)(5)

  5962  2007/20102013

(1)Member of Audit Committee
(2)Member of Compensation Committee
(3)Member of Executive Committee
(4)Member of Nominating Committee
(5)Member of Corporate Governance Committee
(6)Member of Qualified Legal Compliance Committee
(*)Chairperson
(**)Independent Lead Director

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Dwight C. Scharhas been Chairman of the Board since September 30, 1993. Effective February 4, 2009, Mr. Schar relinquished his executive officer title with NVR, but remains the Chairman of the Board. Mr. Schar also served as the President and Chief Executive Officer of NVR from September 30, 1993 through June 30, 2005. Within the last five years, Mr. Schar is alsoserved as a director of Six Flags, Inc.

The Board believes that Mr. Schar is uniquely qualified to serve on the Board, based on his founding status with NVR, his approximately 40 years of homebuilding industry and real estate experience, his successful senior leadership experience from being a Chief Executive Officer of NVR and its predecessors, his experience on another public board, his brand marketing expertise and his expertise in managing a company within a cyclical industry.

C. E. Andrewshas been a director since May 6, 2008. From June 2009 until February 2012, Mr. Andrews was namedthe president of RSM McGladrey on June 29, 2009.Business Services, Inc. Prior to that, Mr. Andrews served as the president of SLM Corporation (Sallie Mae). He joined Sallie Mae in 2003 as the executive vice president of accounting and risk management, and held the title of chief financial officer from 2006 to 2007. Prior to joining Sallie Mae, Mr. Andrews spent approximately 30 years at Arthur Andersen. He served as managing partner for Arthur Andersen’s mid-Atlantic region, and was promoted to global managing partner for audit and advisory services in 2002. Mr. Andrews serves on the boards of WashingtonFirst Bankshares, Inc., Washington Mutual Investors Fund, Junior Achievement (Chair) and Six Flags, Inc., where he is the Chair of the Audit Committee.Inova Health Foundation. He is also a member of the Advisory Boardsadvisory board of the R.B. Pamplin College of Business and Accounting Department at Virginia Tech. Within the last five years, Mr. Andrews was also a member of the Board of Directors of U-Store-It Trust (now CubeSmart), where he was a member of the Audit Committee, and Six Flags, Inc., where he was the Chair of the Audit Committee.

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The Board believes that Mr. Andrews is well qualified to serve on our Board based on the varied business experience that he obtained over his thirty year career in public accounting, his financial and accounting expertise, and his experience on other public boards.

Robert C. Butlerhas been a director since May 1, 2002. Prior to his retirement, Mr. Butler served as Senior Vice President and Chief Financial Officer of Celgene Corporation from 1996 through 1998. Previously, Mr. Butler served as Chief Financial Officer of International Paper Co. In addition, Mr. Butler was the Chairman of the Financial Accounting Standards Advisory Council from 1997 through 2001. Mr. Butler serves as President and on the Board of Trustees of COPE Center, Inc. and serves on the Board of Trustees of the Montclair Foundation, both being non-profit agencies in New Jersey. Mr. Butler also serves on the Finance Council for the Archdiocese of Newark and is Chairman of the Investment Committee. Within the past five years, Mr. Butler also served as a director of Studio One Networks, Inc. and Hanley and Associates, a privately held investor relations company. He also serves on the Board of Trustees of COPE Center, Inc. and the Montclair Foundation, both being non-profit social services agencies in New Jersey.

The Board believes that Mr. Butler is highly qualified to serve on our Board due to the accounting and financial reporting expertise gained from his involvement with the Financial Accounting Standards Advisory Council, his financial expertise while operating as a chief financial officer of several large companies, his manufacturing experience, and his other board experience.

Timothy M. Donahuehas been a director since January 1, 2006. Prior to his retirement, Mr. Donahue was Executive Chairman of Sprint Nextel Corporation from August 2005 to December 2006. He previously served as president and chief executive officer of Nextel Communications, Inc. He began his career with Nextel in January 1996 as president and chief operating officer. Before joining Nextel, Mr. Donahue served as northeast regional president for AT&T Wireless Services operations from 1991 to 1996. Prior to that, he served as president for McCaw Cellular’s paging division in 1986 and was named McCaw’s president for the U.S. central region in 1989. He is also a director of Eastman Kodak, where he serves on the Corporate Responsibility and Governance Committee, Covidien Limited, where he serves as the lead director and Tyco International LTD.a member of the Compensation and Human Resources Committee and the Nominating and Governance Committee, and The ADT Corporation, where he serves on the Compensation Committee. Within the lastpast five years, Mr. Donahue had also served as a director of Tyco International Ltd, which is the Executive Chairmanpredecessor of Sprint Nextel Corporation.

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ADT.

The Board considered Mr. Donahue’s senior leadership experience from being a Chief Executive Officer of a publicly-traded company, his operational expertise in providing global strategic vision to the overall operating entity, his experience serving on other public boards, and his brand marketing expertise in concluding that Mr. Donahue is highly qualified to serve as one of our directors.

Thomas D. Eckerthas been a director since December 1, 2011. Mr. Eckert is Chairman of Capital Automotive Real Estate Services, Inc. (“Capital Automotive”). He was one of the founders of Capital Automotive in October 1997 and led its initial public offering in 1998. Capital Automotive went private in 2005. Mr. Eckert serves as a director of the Munder Funds, Dupont-Fabros Technologies, Inc., Chesapeake Lodging Trust and University of Virginia College Foundation Board. Mr. Eckert is a member of the Audit Committees of Dupont Fabros-Technologies, Inc. and Chesapeake Lodging Trust where he serves as the Chairman of the Audit Committee. Mr. Eckert is Chairman of the Board of the Munder Funds and a member of the Compensation Committee of Chesapeake Lodging Trust.

The Board believes that Mr. Eckert is highly qualified to serve as one of our directors because of his senior leadership experience from being a founder of Capital Automotive, his public board experience, and his operational expertise of being responsible for setting global strategic vision for an entire organization.

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Alfred E. Festawas appointed to our Board effectivehas been a director since December 1, 2008. Mr. Festa is Chairman President and Chief Executive Officer of W. R. Grace & Co (“Grace”). He joined Grace as president and chief operating officer in November 2003, assumed the CEO role in June 2005, and became Chairman of the Board of Grace on January 1, 2008. From November 2002 until November 2003, Mr. Festa was a partner in Morgenthaler Private Equity Partners (Morgenthaler”(“Morgenthaler”), a venture/buy outbuyout firm focused on mid-market industrial build-ups.

Mr. Festa serves as a director of the American Chemistry Council and the National Association of Manufacturers.

The Board believes that Mr. Festa is well-suited to serve on our Board based on his experience of managing Grace during different business cycles, his senior leadership experience as a Chief Executive Officer of a publicly-traded company and his role setting global strategic vision for the entire organization, his business development and mergers and acquisitions experience from his work at Morgenthaler, and his experience serving on another public board.

Ed Grier is being nominated for his first term as a director with NVR. Mr. Grier has been the Dean of the Virginia Commonwealth University (“VCU”) School of Business since March 2010. Prior to joining VCU, Mr. Grier spent approximately 29 years with the Walt Disney Company beginning in 1981. He served as the President of the Disneyland Resort from 2006 until 2010. Mr. Grier held various senior financial and operational roles during his career with Disney. Mr. Grier also serves on the boards of the following non-profit entities: Colonial Williamsburg, Virginia Bio Tech Research Park, Brandman University and The Richmond Forum.

The Board believes that Mr. Grier is well-qualified to serve on our Board based on his operational expertise from operating a multi-billion dollar operation for Disney, his brand marketing expertise obtained while managing one of the world’s most recognized brands and his financial expertise.

Manuel H. Johnsonhas been a director since September 30, 1993. Dr. Johnson has been co-chairman and senior partner in Johnson Smick International, Inc., an international financial policy-consulting firm, since 1990. From August 1, 1997 until December 2003, Dr. Johnson was the chairman of the Board of Trustees and president of the Financial Accounting Foundation, which oversees the Financial Accounting Standards Board. Also during 1997, Dr. Johnson was named a member of the Independence Standards Board (which was dissolved on July 31, 2001), formed jointly by the Securities and Exchange CommissionSEC and the American Institute of Certified Public Accountants. Dr. Johnson is a founder and co-chairman of the Group of Seven Council, an international commission supporting economic cooperation among the major industrial nations. HeDr. Johnson is a director of Morgan Stanley FundsFunds. Additionally, he is a director with the following non-profit and Evergreen Energy, Inc (formerly KFX, Inc.).educational institutions: National Sporting Library and Museum, Upperville Colt and Horse Show, Troy University Foundation and Mercatus Center at George Mason University. Within the last five years, Mr. Johnson was also a member of the Board of Directors of Greenwich Capital Markets, Inc.

and Evergreen Energy, Inc.

The Board believes that Mr. Johnson is well-qualified to serve on our board based on his financial and macroeconomic expertise, his knowledge of governmental and financial regulatory matters, his ability to access multiple high level information channels in the public and private sectors, his public board experience, and his lengthy experience as one of our directors.

Mel Martinezwas appointed to our Board effective December 1, 2012. Mr. Martinez has been Chairman of the South East and Latin America for JPMorgan Chase & Co. since August 2010. Prior to joining JPMorgan, Mr. Martinez was a partner in the law firm DLA Piper from September 2009 to July 2010. Mr. Martinez served as a United States Senator from Florida from January 2005 to September 2009. Prior to his election, Mr. Martinez served as the Secretary of the United States Department of

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Housing and Urban Development (“HUD”) from January 2001 to January 2004. Mr. Martinez is also a director of Marriott Vacations Worldwide Corporation and Habitat for Humanity International. Within the past five years, Mr. Martinez was a director of Progress Energy, Inc.

The Board believes that Mr. Martinez is well qualified to serve as one of our directors based upon his government and housing regulatory matters experience in connection with his service as Secretary of HUD, his ability to access high level information channels in the public sector and his public board experience.

William A. Moranhas been a director since September 30, 1993. Mr. Moran has been the chairman of Elm Street Development, Inc. (“Elm Street”) since 1996. Until January 1, 2010, Mr. Moran was a director of Craftmark, Inc., a homebuilder in Virginia, Maryland, Pennsylvania and Delaware and Craftstar, Inc., which develops, invests in and periodically sells apartments, condominiums, single family homes and townhomes in Virginia and Maryland. Mr. Moran is also a director of ESD, Inc.

The Board considered Mr. Moran’s lengthy homebuilding, real estate and land development experience, his senior leadership experience from being a Chief Executive Officer, his operational expertise and his expertise in managing a company within a cyclical industry in concluding that Mr. Moran is highly qualified to serve as one of our directors.

David A. Preiserhas been a director since September 30, 1993. Mr. Preiser has been a senior managing director and a member of the Board of Directors (now an advisory member) of the investment banking firm of Houlihan Lokey Howard & Zukin (“Houlihan Lokey”) since 2001. Prior to

10

that date, Mr. Preiser was a managing director of Houlihan Lokey. Since January 1, 2005, Mr. Preiser has served as Chairman of Houlihan Lokey Howard and Zukin —Lokey– Europe, pursuant to which he leads Houlihan Lokey’s European investment banking activities, with a particular focus on Houlihan Lokey’s European restructuring business. Mr. Preiser is also active in Houlihan Lokey’s restructuring activities in the United States. From 1990, Mr. Preiser had been active in coordinating Houlihan Lokey’s real estate and financial restructuring activities as a senior managing director. Mr. Preiser is also a director of AIT Holding Company, LLC.Ronald McDonald House of NY. Within the last five years, Mr. Preiser was also a member of the Board of Directors of Jos. A. BanksBank Clothiers, Inc.; Akrion, Inc.; Tremesis Energy Investment Company; and Collective Licensing International, LLC; and AIT Holding Company, LLC.

The Board believes that Mr. Preiser is well-suited to serve as one of our directors based on his expertise of managing workouts of distressed companies, his senior leadership experience of setting global strategic vision for an organization, his financial expertise from working in the investment banking field, his knowledge of capital markets, his business development and mergers and acquisitions experience, his experience sitting on other public boards, and his lengthy experience as one of our directors during different points in our business cycle.

W. Grady Rosierwas appointed to our Board effectivehas been a director since December 1, 2008. Mr. Rosier has been the president and CEO of McLane Company, Inc. (“McLane”), a supply chain services company, since 1995. Prior to that date, Mr. Rosier has held various senior management roles since joining McLane in 1984. Mr. Rosier is the leadserves as a director of Tandy Brands Accessories, Inc.NuStar Energy L.P. Within the last five years, Mr. Rosier was also a director of Tandy Brands Accessories, Inc. and Evergreen Energy, Inc.

The Board believes that Mr. Rosier is highly qualified to serve as one of our directors because of his senior leadership experience from being a Chief Executive Officer, his other public board experience, and his operational expertise of being responsible for setting global strategic vision for an entire organization.

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John M. Toupshas been a director since September 30, 1993. Prior to his retirement, Mr. Toups held various management positions with Planning Research Corporation from 1970 through 1987, for which he was chief executive officer from 1978 to 1987 and chairman from 1982 to 1987. He is alsoterm as a director of Halifax Corporation, GTSI, Inc., Dewberry & Davis,expires at the 2013 Annual Meeting and Willdan Group, Inc. Within the last five years, Mr. Toups also served as a member of the Board of Directorshe is not standing for Dinte Resources.

     The Board considered Mr. Toup’s senior leadership experience from being a Chief Executive Officer of a publicly-traded company, his public board experience, and his lengthy experience as one of our directors in concluding that Mr. Toups is highly qualified to serve as one of our directors.
reelection.

Paul W. Whetsellhas been a director since March 1, 2007. Mr. Whetsell has been the President and CEO of Loews Hotels Holding Corporation since January 2012. From 2006 until January 2012, Mr. Whetsell was the president and chief executive officer of Capstar Hotel Company since 2006.Company. From August 1998 until May 2006, Mr. Whetsell served as the chairman and chief executive officer of Meristar Hospitality Corporation, and as the Chairman of Interstate Hotels and Resorts, Inc. (“Interstate”) from August 1998 until March 2009. From August 1998 until October 2003, he also served as the chief executive officer of Interstate and its predecessor. He also serves on the Board of Trustees ofCMR Associates and the Cystic Fibrosis Foundation, and isFoundation. In the past five years, Mr. Whetsell was also a memberdirector of that Board’s Audit Committee.

Virgin Hotels North America, LLC.

The Board considered Mr. Whetsell’s senior leadership experience from being a Chief Executive Officerchief executive officer of a publicly-traded company, his public board service experience, his operational

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expertise, his real estate experience, and his brand marketing expertise in concluding that Mr. Whetsell is highly qualified to serve as one of our directors.

Board Independence

Our Board has established Director independence standards to assist us in determining director independence, the standards of which meet the independence requirements of the New York Stock Exchange’s (“NYSE”)NYSE corporate governance listing standards (our common stock is listed on the NYSE). Our independence standards are included within our Corporate Governance Guidelines, which are available on our website at http://www.nvrinc.com.www.nvrinc.com. Our Board considers all relevant facts and circumstances in making an independence determination. As required by the rules of the NYSE, for a director to be considered “independent” under our independence standards, a director must be determined, by a resolution of our Board to havemust affirmatively determine that the director has no material relationship with us (other than as a director) directly or indirectly.

Our Board has affirmatively determined that Mssrs. Andrews, Butler, Donahue, Eckert, Festa, Grier, Johnson, Martinez, Preiser, Rosier, Toups, and Whetsell are independent pursuant to our independence standards and have no material relationship with us that would affect their independence.standards. Mr. Schar, our former Executive Chairman, and Mr. Moran, an existing director who controls a company from which we acquire a small portion of our finished lots upon which to build our homes, have been determined by our Board not to be “independent.”

When our Board analyzed the independence of its members, it considered twothe following transactions that it deemed immaterial to the independence of the director involved based on the amounts involved and the ordinary course business nature of the transactions:

•Mr. Toups is a director of Dewberry & Davis (“Dewberry”), a privately held professional services firm that provides engineering, surveying and environmental sciences services. Previously, the independent, disinterested members of our Board authorized us to obtain services in the ordinary course of business from Dewberry, the services of which included engineering and surveying of certain finished lots upon which we build our homes. In 2009, we paid Dewberry $87,979 for such services. The Board concluded that NVR’s relationship with Dewberry does not affect the independence of Mr. Toups because his position as a director of Dewberry does not enable him to derive any benefit from the relationship.
•Mr. Donahue is a director of Tyco International LTD. (“Tyco”), a publicly traded company that wholly owns certain home security and fire protection systems and services companies. Previously, the independent, disinterested members of our Board authorized us to obtain services in the ordinary course of business from Tyco for model home security monitoring systems as well as built-in security and fire protection systems within homes sold to customers. In 2009, we paid Tyco $3,717 for such services. The Board concluded that NVR’s relationship with Tyco does not affect the independence of Mr. Donahue because his position as a director of Tyco does not enable him to derive any benefit from the relationship.

12Mr. Toups is a director of Dewberry & Davis (“Dewberry”), a privately held professional services firm that provides engineering, surveying and environmental sciences services. The independent, disinterested members of our Board have authorized us to obtain services in the ordinary course of business from Dewberry, the services of which included engineering and surveying of certain finished lots upon which we build our homes. In 2012, we obtained such services from Dewberry. The Board concluded that NVR’s relationship with Dewberry does not affect the independence of Mr. Toups because his position as a director of Dewberry does not enable him to derive any benefit from the relationship. In addition, all transactions were in the ordinary course of business and conducted at arms-length.

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Mr. Donahue is a director of The ADT Corporation (“ADT”), a publicly traded home security company. The independent, disinterested members of our Board have authorized us to obtain services in the ordinary course of business from ADT’s predecessor, Tyco International Ltd., for model home security monitoring systems as well as built-in security and fire protection systems within homes sold to customers. In 2012, we obtained such services from ADT. The Board concluded that NVR’s relationship with ADT does not affect the independence of Mr. Donahue because his position as a director of ADT does not enable him to derive any benefit from the relationship. In addition, all transactions were in the ordinary course of business and conducted at arms-length.

Mr. Martinez is an employee of JPMorgan Chase & Co. (“JPMorgan”), a publicly traded financial institution. The independent, disinterested members of our Board authorized us to obtain services in the ordinary course of business from JPMorgan. NVR’s mortgage subsidiary, NVR Mortgage Finance, Inc., sells mortgages it originates to JPMorgan in the ordinary course of business. In addition, NVR obtains banking services from JPMorgan in the ordinary course of business. The Board concluded that NVR’s relationship with JPMorgan does not affect the independence of Mr. Martinez because his position as an employee of JPMorgan does not enable him to derive any benefit from the relationship. In addition, all transactions were in the ordinary course of business and conducted at arms-length.

Board Committees

Audit Committee

We have a separately designated standing Audit Committee comprised of four members, each of whom satisfies the independence standards specified above and Rule 10A-3(b)(1) under the Securities Exchange Act of 1934 (“1934 Act”). All current members of our Audit Committee are financially literate and are able to read and understand fundamental financial statements, including a balance sheet, income statement and cash flow statement. Our Board has determined that Manuel H. Johnson, our current Audit Committee Chairman, qualifies as an audit committee financial expert as defined within Item 407(d)(5) of Regulation S-K under the 1934 Act. This designation does not impose on Mr. Johnson any duties, obligations or liability that are any greater than are generally imposed on him as a member of our Audit Committee and our Board, and his designation as an audit committee financial expert pursuant to this Securities and Exchange Commission (“SEC”)SEC requirement does not affect the duties, obligations or liability of any other member of our Audit Committee or our Board.

Our Audit Committee operates pursuant to a charter adopted by our Board that is available at http://www.nvrinc.com.www.nvrinc.com. As enumerated in the Charter, our Audit Committee was established to assist our Board’s oversight of (1) the integrity of our accounting and financial reporting processes,processes; (2) our compliance with legal and regulatory requirements,requirements; (3) our independent external auditor’s qualifications and independence,independence; and (4) the performance of our internal audit function and of our independent external auditors. Among other things, our Audit Committee prepares the Audit Committee Report for inclusion in our proxy statement; annually reviews our Audit Committee Charter and the Audit Committee’s performance; appoints, evaluates and determines the compensation of our independent external auditors; maintains written procedures for the receipt, retention and treatment of complaints on accounting, internal accounting controls or auditing matters, as well as for the confidential, anonymous submissions by our employees of concerns regarding questionable accounting or auditing matters; reviews substantiated complaints received from internal and external sources regarding accounting, internal accounting controls or auditing matters; oversees our internal audit department, and reviews reports from management

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regarding significant accounting, internal accounting controls, auditing, legal and regulatory matters. Our Audit Committee has the authority and available funding to engage any independent legal counsel and any accounting or other expert advisors, as our Audit Committee deems necessary to carry out its duties.

Compensation Committee

We have a separately designated standing Compensation Committee comprised of sixfive members, each of whom satisfies our independence standards specified above. Our Compensation Committee operates pursuant to a charter adopted by our Board that is available at http://www.nvrinc.com.

www.nvrinc.com.

Description of Duties

Among other things, our Compensation Committee (1) reviews and determines all compensation of our Chief Executive Officer (“CEO”)CEO and, based in part on the recommendation of the CEO, of all of our other executive officers; (2) periodically reviews and makes recommendations to the Board with respect to the compensation of our directors; (3) administers and interprets incentive compensation and equity plans for our employees (except as otherwise described below); (4) assists in preparing the Compensation Discussion and Analysis and prepares our Compensation Committee Report for inclusion in our annual meeting proxy statement in accordance with applicable rules and regulations of the SEC; (5) makes recommendations to our Board about succession planning for our CEO, and in conjunction with the CEO, also considers succession planning for other of our key positions; (6) reviews and approves any employment agreements, or amendments thereto, with our CEO and other applicable executive officers; and (7) annually reviews our Compensation Committee Charter and the Compensation Committee’s performance.

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The Compensation Committee charter provides that the Committee may delegate its authority to one or more members of the Committee. Any person to whom authority is delegated must report any actions taken by him or her to the full Committee at its next regularly scheduled meeting. During 2009,2012, the Compensation Committee did not delegate any of its authority to any individual member(s) of the Committee.

The Compensation Committee’s charter also provides that the Compensation Committee may delegate to a senior executive officer of NVR the authority to grant optionsequity awards to non-executive employees, within limits prescribed by the full Board of Directors. Any optionsequity awards granted by a senior executive officer pursuant to delegated authority must be reported to the Compensation Committee at its next regularly scheduled meeting. Our Compensation Committee, by resolution, delegated authority to Mr. Saville, acting jointly with the Senior Vice President of Human Resources, to grant optionsequity awards to new and existing employees below the executive officer rank during 2009.2012. The Senior Vice President of Human Resources wasis required to report any optionsequity awards granted pursuant to this delegated authority to the Compensation Committee at their next scheduled meeting after the delegated authority wasis exercised. We do not have a program, plan or practice in place to grant options in coordination with the release of material non-public information.

For a discussion of the role of Mr. Saville in recommending the amount or form of compensation paid to our named executive officers during 2009,2012, see theCompensation Discussion and Analysis below.

Compensation Consultants

Pursuant to its charter, the Compensation Committee has the sole authority and availablethe entitlement to funding to obtain advice and assistance from compensation consultants, as well as internal or outside legal, accounting or other expert advisors, that it determines to be necessary to carry out its duties. Periodically the Compensation Committee engages a compensation consultantsconsultant to provide advice regarding executive officer compensation on an as needed basis. In 2009,2012, the Compensation Committee engaged Aon Hewitt Associates to assist us in formulating the terms and structure of a long termreviewing our long-term incentive plan, for adoption in 2010, which included an analysis of

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the base pay,annual salary, annual incentive opportunitiesopportunity and long-term incentive compensation awardedplan available to our named executive officers as compared to aour peer group, as well as a Board compensation analysis.group. The Compensation Committee has analyzed the independence of Aon Hewitt doesand determined that its work did not performpresent any other services for us.

conflict of interest.

Compensation Committee Interlocks and Insider Participation

During 2009,2012, our compensation committeeCompensation Committee was comprised of Mr. Toups, Mr. Donahue, Mr. Johnson, Mr. Preiser, Mr. Rosier and Mr. Whetsell, all of who are independent directors. None of our executive officers served as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of our Board or our Compensation Committee; accordingly, there were no interlocks with other companies within the meaning of the SEC’s proxy rules during 2009.

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2012.

Nominating Committee

We have a separately designated standing Nominating Committee comprised of four members, each of whom satisfies our independence standards specified above. The Nominating Committee operates pursuant to a charter adopted by the Board that is available at http://www.nvrinc.com.

www.nvrinc.com.

Among other things, the Nominating Committee (1) identifies individuals qualified to become Board members; (2) recommends that our Board select the director nominees for the next annual meeting of shareholders; (3) recommends to our Board names of individuals to fill any vacancies on our Board that arise between annual meetings of shareholders; (4) considers from time to time our Board committee structure and makeup; and (5) annually reviews our Nominating Committee Charter and the Nominating Committee’s performance. Our Nominating Committee also has the sole authority and appropriate funding to obtain advice and assistance from executive search firms, and internal or outside legal, accounting or other expert advisors that it determines necessary to carry out its duties.

Attached asAppendix A are our Policies and Procedures for the Consideration of Board of Directors Candidates, including nominations submitted by our security holders. This material is also available at http://www.nvrinc.com.www.nvrinc.com. These policies and procedures include minimum qualifications for director nominees and the process for identifying and evaluating director nominees. Our Nominating Committee has a stated goal of identifying well-qualified director candidates that would enhance the Board’s diversity. In searching for potential director candidates, the Nominating Committee first seeks the most qualified candidates with a record of success. The Committee also searches for candidates that promote diversity of views, backgrounds, experience and skills to the Board.

Corporate Governance Committee

We have a separately designated standing Corporate Governance Committee comprised of fivefour members, each of whom satisfies our independence standards specified above. The Corporate Governance Committee operates pursuant to a charter adopted by our Board that is available at http://www.nvrinc.com.www.nvrinc.com. Our Corporate Governance Guidelines are also available at http://www.nvrinc.com.

www.nvrinc.com.

Among other things, the Corporate Governance Committee (1) develops and recommends to our Board a set of corporate governance principles; (2) annually reviews and assesses the adequacy of our Corporate Governance Guidelines, including ensuring that they reflect best practices where appropriate; (3) manages the Board’s annual self-evaluation process,process; and (4) annually reviews our Corporate Governance Committee Charter and the Corporate Governance Committee’s performance. Our Corporate Governance Committee must obtain Board approval for funding to obtain advice and assistance from

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internal or outside legal, accounting or other expert advisors that it determines necessary to carry out its duties.

Qualified Legal Compliance Committee

Our Qualified Legal Compliance Committee (“QLCC”) is a separately designated standing committee, currently consisting of all of the members of our Audit Committee. It was established to assist our Board in fulfilling its responsibilities relating to oversight of legal compliance by our employees and us and to meet the requirements for a qualified legal compliance committee under Part 205 of the rules of the SEC (the “Part 205 Rules”). The composition of the QLCC is intended to comply with all independence requirements under the Part 205 Rules. Our QLCC operates pursuant to a charter adopted by our Board and

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is available at http://www.nvrinc.com.www.nvrinc.com. Our QLCC annually reviews the QLCC Charter and the QLCC’s performance.

Our QLCC has adopted written procedures for the confidential receipt, retention and consideration of any report of evidence of a material violation of securities laws or material breach of fiduciary duty or similar material violation by us, or our directors, officers, employees or agents (“Material Violation”) under the Part 205 Rules, and has the authority and responsibility (1) to inform our chief legal officer (“CLO”), CEO and chief financial officer (“CFO”) of any report of evidence of a Material Violation; (2) to determine whether an investigation is necessary regarding any report of evidence of a Material Violation and; (3) if our QLCC determines an investigation is necessary or appropriate, initiate such investigation; (4) to obtain a written report from our CLO or outside counsel conducting any such investigation at the investigation’s conclusion; (5) to recommend, by majority vote, that we implement an appropriate response to evidence of a Material Violation and inform our Board, CEO, CLO and CFO of the results of any such investigation and the appropriate remedial measures to be adopted; and (6) acting by majority vote, to take all other appropriate action, including the authority to notify the SEC in the event that we fail in any material respect to implement an appropriate response that our QLCC has recommended that we take.recommended. Our QLCC has the authority and available funding to engage any independent legal counsel, accounting or other expert advisors as our QLCC deems necessary to carry out its duties.

Executive Committee

Our Executive Committee was established pursuant to our Bylaws to have such powers, authority and responsibilities as may be determined by a majority of our Board of Directors. Our Executive Committee has never met, nor has our Board ever delegated any powers, authority or responsibilities to the Executive Committee. Our Board of Directors intends to continue the practice of considering corporate matters outside the scope of our other existing Board committees at the full Board level.

Security Holder

Communications with the Board of Directors

Our Policies and Procedures Regarding Security Holder Communications with the NVR, Inc. Board of Directors, the independent lead director and the non-management directors as a group are available at http://www.nvrinc.com. This same policy is applicable to any interested party wanting to communicatewww.nvrinc.com.

Transactions with the non-management directors or Mr. Butler, who is the lead independent director for 2010 meetings of our independent directors.

Transactions With Related Persons

During the year ended December 31, 2009,2012, we entered into new forward lot purchase agreements to purchase finished building lots for a total purchase price of approximately $70,600,000$49,000,000 with Elm Street Development, Inc. (“Elm Street”), which is controlled by one of our directors, Mr. Moran. The independent members of our Board approved these transactions, and we expect to purchase these finished lots over the next four years at the contract prices.transactions. During 2009,2012, NVR also purchased 354375 developed lots at market prices from Elm Street for approximately $46,700,000,$54,552,000 and forfeited an additional $2,460,000 of depositsa $55,000

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deposit to restructure four forwardterminate a lot purchase agreementsagreement. We also continue to obtain reduced purchase prices forcontrol a parcel of raw land expected to yield at least 1,500 finished lots under the agreements. NVR and Elm Street also entered intothrough a joint venture arrangemententered into with Elm Street during 2009. We did not make any additional capital contributions in 2009addition to acquire controlthe $8,450,000 invested through 2011 in the aforementioned joint venture. Finally, during 2012 we paid Elm Street approximately $143,000 to manage the development of a parcel of zoned, unimproved raw groundland that is estimated to yield at least 600 finished lots. NVR invested $8,000,000we purchased from Elm Street in the joint venture, and has no obligation to contribute any further capital into the entity.

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2010.

     During 2009, William J. Inman, the president of the mortgage company, was the co-borrower on a $135,000 mortgage loan issued by NVR Mortgage Finance, Inc., in the ordinary course of its business, to one of Mr. Inman’s relatives. The terms of the mortgage loan were no less favorable to us than those that would have been issued to an unrelated third party, and our independent Directors approved the loan.
Procedures for Approval of Related Person Transactions

All related person transactions affecting us that are potentially disclosable under Item 404(a) of Regulation S-K must be considered, reviewed and approved or ratified by the disinterested, independent directors of our Board, regardless of the type of transaction or amount involved. This requirement is contained within various written documents, including Section 7.05 of our Bylaws (available on our website at http://www.nvrinc.com)www.nvrinc.com), Sections 1 and 4 of our Code of Ethics (available on our website at http://www.nvrinc.com)www.nvrinc.com), and our internal Standards of Business Conduct, Human Resource and Financial Policies and Procedures.

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Security Ownership of Certain Beneficial Owners and ManagementSECURITY OWNERSHIPOF CERTAIN BENEFICIAL OWNERSAND MANAGEMENT

The following tables set forth certain information as to the beneficial ownership of Common Stock by each person known by us to be the beneficial owner of more than 5% of the outstanding Common Stock as of the dates indicated, and each director, director nominee and executive officer and by all directors and executive officers as a group as of March 5, 2010.8, 2013. Except as otherwise indicated, all shares are owned directly and the owner has sole voting and investment power with respect thereto.

Certain Beneficial Owners

     
Name and Address of Holder Number of Shares Percent of Class
BlackRock Inc. 714,965 (1) 11.7%
40 East 52nd Street New York, NY 10022
    
     
Capital World Investors 337,000 (2) 5.5%
333 South Hope Street Los Angeles, CA 90071    
     
Wellington Management Company, LLP 442,869(3) 7.2%
75 State Street Boston, MA 02109    
     
AXA Assurances I.A.R.D. Mutuelle, and AXA Assurances VIE Mutuelle 630,391(4) 10.3%
26, Rue Drout 75009 Paris, france    
     

Name and Address of Holder

  Number of Shares  Percent of Class 

BlackRock Inc.

   494,117 (1)   9.9% 

40 East 52ndStreet

   

New York, NY 10022

   

Pennant Capital Management, L.L.C.

   259,302 (2)   5.2% 

One DeForest Avenue, Suite 200

   

Summit, NJ 07901

   

(1)Of the shares that wereAs reported within a Schedule 13G filed January 8, 2010,February 11, 2013, the entity has sole power to vote or direct the vote and the sole power to dispose or direct the disposition of all of the shares reported.
(2)Of the shares that wereAs reported within a Schedule 13G filed February 10, 2010, the entity has sole power to vote 52,000 shares and sole power to dispose or direct the disposition of 337,000 shares.
(3)Of the shares that were reported within a Schedule 13G filed February 12, 2010,14, 2013, the entity has shared power to vote 376,632 sharesor direct the vote and shared power to dispose or direct the disposition of 439,831 shares.
(4)Ofall of the shares that were reported within a Schedule 13G filed February 12, 2010, the entity has sole power to vote 509,244 shares and sole power to dispose or direct the disposition of 630,391 shares.reported.

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Directors and Management
         
Name Number of Shares  Percent of Class 
Dwight C. Schar  60,000   * 
C. E. Andrews  317   * 
Robert C. Butler  9,950(1)  * 
Timothy M. Donahue  400   * 
Alfred E. Festa  194   * 
Manuel H. Johnson  27,465(2)  * 
William A. Moran  28,125   * 
David A. Preiser  9,050(3)  * 
W. Grady Rosier  300   * 
John M. Toups  25,192(4)  * 
Paul W. Whetsell  265   * 
William J. Inman  91,403(5)  1.5%
Paul C. Saville  243,550(6)  3.9%
Dennis M. Seremet  58,542(7)  * 
Robert W. Henley  3,059(8)  * 
All directors, director nominees and executive officers as a group (15 persons)  557,812   8.8%

Name

  Number of Shares  Percent of Class 

Dwight C. Schar

   67,841    1.4% 

C. E. Andrews

   2,012 (1)    * 

Robert C. Butler

   1,372 (2)    * 

Timothy M. Donahue

   2,350 (3)    * 

Thomas D. Eckert

   200     * 

Alfred E. Festa

   2,240 (4)    * 

Ed Grier

   —       * 

Manuel H. Johnson

   2,415 (5)    * 

Mel Martinez

   —       * 

William A. Moran

   29,240 (6)    * 

David A. Preiser

   2,000 (3)    * 

W. Grady Rosier

   2,216     * 

John M. Toups

   9,359 (7)    * 

Paul W. Whetsell

   2,250 (3)    * 

Paul C. Saville

   162,793 (8)   3.2% 

Daniel D. Malzahn

   9,189 (9)    * 

Robert W. Henley

   9,364 (10)    * 

Eugene J. Bredow

   2,826 (11)    * 

All directors, director nominees and executive officers as a group (18 persons)

   307,667    6.1% 

*Less than 1%.
(1)Includes 1,047 vested options issued under the NVR, Inc. 1998 Directors’ Long Term Stock Option Plan.
(2)Includes 9,500434 vested options issued under the NVR, Inc. 1998 Directors’ Long Term Stock Option Plan and 150 shares held in a Charitable Remainder Trust.
(2)(3)Includes 17,0001,302 vested options issued under the NVR, Inc. 1998 Directors’ Long Term Stock Option Plan.
(4)Includes 1,592 vested options issued under the NVR, Inc. 1998 Directors’ Long Term Stock Option Plan.

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(5)Includes 1,302 vested options issued under the NVR, Inc. 1998 Directors’ Long Term Stock Option Plan and 65 shares owned by his son.
(6)Includes 434 vested options issued under the NVR, Inc. 1998 Directors’ Long Term Stock Option Plan and 5,107 shares held in trusts for the benefit of his adult children.
(7)Includes 1,302 vested options issued under the NVR, Inc. 1998 Directors’ Long Term Stock Option Plan, 43 shares owned by his wife and 4,400 shares held in a family trust for the benefit of his adult children.
(8)Includes 25,000 vested options issued under the NVR, Inc. 2000 Broad-Based Stock Option Plan, and 65 shares owned by his son.
(3)Includes 8,000 vested options issued under the NVR, Inc. 2000 Broad-Based Stock Option Plan.
(4)Includes 17,000 vested options issued under the NVR, Inc. 2000 Broad-Based Stock Option Plan and 43 shares owned by his wife.
(5)Includes 86,384 vested shares held in a Deferred Compensation Rabbi Trust, 8163,199 vested shares held by the NVR, Inc. Employee Stock Ownership Plan in trust, and 22 shares held as a discretionary investment in the NVR, Inc. Profit Sharing Plan.
(6)Includes 120,000 vested options issued under the NVR, Inc. 2000 Broad-Based Stock Option Plan, 3,168 vested shares held by the NVR, Inc. Employee Stock Ownership Plan in trust, 4,3894,455 shares held as a discretionary investment in the NVR, Inc. Profit Sharing Plan and 105,883 vested shares held in a Deferred Compensation Rabbi Trust. Excludes 777 shares held in a Deferred Compensation Plan which are not distributable until six months subsequent to separation of service.
(7)(9)Includes 12,5005,000 vested options issued under the NVR, Inc. 2000 Broad-Based Stock Option Plan, 3,050977 vested shares held by the NVR, Inc. Employee Stock Ownership Plan in trust 2,115and 350 shares held as a discretionary investment in the NVR, Inc. Profit Sharing Plan and 40,527 vested shares held in a Deferred Compensation Rabbi Trust.Plan.
(8)(10)Includes 1,7506,000 vested options issued under the NVR, Inc. 2000 Broad-Based Stock Option Plan, 1,0611,092 vested shares held by the NVR, Inc. Employee Stock Ownership Plan in trust and 248 shares held as a discretionary investment in the NVR, Inc. Profit Sharing Plan.
(11)Includes 667 vested options issued under the NVR, Inc. 1998 Management Long Term Stock Option Plan, 1,275 vested options issued under the NVR, Inc. 2000 Broad-Based Stock Option Plan and 105 vested shares held by the NVR, Inc. Employee Stock Ownership Plan in trust.

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the 1934 Act requires our directors and executive officers and persons who own more than 10% of our Common Stock to file reports of ownership and changes in ownership of such stock with the SEC and the national securities exchange upon which our shares are publicly traded. Directors, executive officers and greater than 10% shareholders are required by SEC regulations to furnish us with copies of all such forms filed. To our knowledge, based solely on a review of the copies of such reports furnished to us during 20092012 and written representations that no other reports were required, all directors, executive officers and greater than 10% shareholders complied with all applicable Section 16(a) filing requirements.

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THE FOLLOWING REPORT OF THE AUDIT COMMITTEE SHALL NOT BE DEEMED TO

BE “SOLICITING MATERIAL” OR TO BE “FILED” WITH THE SECURITIES AND

EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933 OR THE

SECURITIES EXCHANGE ACT OF 1934 OR INCORPORATED BY REFERENCE IN ANY

DOCUMENT SO FILED.

REPORTOFTHE AUDIT COMMITTEE

Report of the Audit Committee

NVR’s Audit Committee is solely comprised of independent directors as defined by our independence standards (see above) and in the applicable SEC rules, and operates pursuant to a charter adopted by our Board, which is available at http://www.nvrinc.com.

www.nvrinc.com.

Our management has primary responsibility for preparing our financial statements and establishing financial reporting systems and internal controls. Management also has the responsibility of reporting on the effectiveness of our internal controls over financial reporting. Our independent external auditor, KPMG LLP, is responsible for expressing opinions on the conformity of our audited financial statements with accounting principles generally accepted in the United States of America and on the effectiveness of our internal control over financial reporting. In this context, the Audit Committee hereby reports as follows:

1.The Audit Committee has reviewed and discussed the audited financial statements and management’s assessment of the effectiveness of our internal controls over financial reporting with management, and reviewed and discussed KPMG LLP’s audit opinions with KPMG LLP;

2.The Audit Committee has discussed with KPMG LLP the matters required to be discussed under the rules adopted by Statement on Auditing Standardsthe Public Company Accounting Oversight Board (“SAS”PCAOB”) 61 (Codification of Statements on Auditing Standards, AU 380), SAS 99 (Consideration of Fraud in a Financial Statement Audit) and SEC rules discussed in Final Releases 33-8183 and 33-8183a;;

3.The Audit Committee has received the written disclosures and the letter from KPMG LLP required by the applicable requirements of the Public Company Accounting Oversight BoardPCAOB regarding KPMG LLP’s communications with the Audit Committee concerning independence, relative to NVR;and has discussed with KPMG LLP its independence; and

4.Based on the reviews and discussions referred to in paragraphs (1) through (3) above, the Audit Committee recommended to the Board, and the Board has approved, that the audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2009,2012, for filing with the SEC.

The undersigned, constituting all of the members of the Audit Committee, have submitted this report to the Board of Directors.

Manuel H. Johnson (Chairman), C.E. Andrews, Robert C. Butler and Alfred E. Festa

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COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary

The following are highlights of the compensation actions taken during 2012 relative to our named executive officers:

Equity compensation

Except for grants related to promotions, we did not issue any equity awards to our named executive officers in 2012. This is consistent with our practice of not issuing annual equity awards. The last award issued to our named executive officers under our on-going long term incentive plan was on May 11, 2010, with vesting dates of December 31, 2011, 2012, 2013 and 2014.

We did not change our philosophy of placing the majority of the named executive officers’ total compensation at risk in the form of equity.

We maintained our Common Stock ownership requirements for our named executive officers, under which they must acquire and hold Common Stock with a total fair market value ranging from four to eight times their annual base salaries, depending on position.

Cash compensation

•

We maintained target total annual cash compensation below the 50th percentile relative to comparable positions in other publicly traded companies within our industry.

We froze our CEO’s salary at its 2006 level for the sixth consecutive year and froze our CFO’s salary at its 2008 level for the fourth consecutive year.

The annual incentive for all named executive officers is capped at 100% of base salary.

Say on Pay

In 2012, approximately 87% of the shares voted were cast in favor of the compensation of our named executive officers.

Since that vote, we have continued discussions with our shareholders regarding our compensation philosophies and practices.

We believe this input will be helpful to our Compensation Committee and Board and we will carefully consider the feedback received in the development of future long-term incentive programs for our named executive officers and senior management team.

Overview

Since the beginning of 2006, the U.S. economy has experienced the most severe housing downturn since the Great Depression of the 1930’s. Amid that crisis the homebuilding industry has endured a prolonged downturn which has seen record levels of home price declines, depressed levels of housing demand and high levels of mortgage delinquency and foreclosure activity. During 2012, the homebuilding market experienced some stabilization and improving sales trends. These favorable market conditions are driven by improved housing affordability resulting from historically low mortgage interest rates and rising costs in the rental market. Despite these improvements, the housing market continues to face challenges from a tight mortgage lending environment, consumer confidence issues and uncertainty as to the long-term sustainability of the economic recovery, which to this point has been uneven.

Our business philosophy and mission has been to develop and hone a business model to maximize shareholder value in a cyclical industry. Our business model and strategic approach, even

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before the beginning of the downturn, was to deliver industry leading (among the publicly traded homebuilding peer group) rates of return on capital, return on equity and growth in earnings per share. Since the downturn began, we are the only homebuilder in that group that has not experienced a loss year in any of the last seven years, and have led the group in total shareholder return and cumulative net income over that seven-year period (see the following charts).

LOGO

LOGO

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We believe these results are because of: 1) our macro view that housing is a cyclical industry and we have developed the appropriate business model and strategies to be successful in that environment; and 2) our highly skilled and motivated management team that has remained extremely disciplined in executing our significantly different business model. We believe our performance is clearly differentiated principally on these two points, as there was not another management team in the industry who has successfully navigated through these difficult times as well as NVR. Additionally, several key aspects of our strategy that are well engrained in our corporate culture are: 1) a strong alignment between management incentives (at all levels, not just named executive officers) and long term shareholder returns; 2) stability and long term retention of our management team; 3) generation of cash flow; and 4) a comprehensive understanding of our fiduciary duties as managers of a public company. We believe that we have been successful in retaining our management team through the use of our long term incentive program, which, in turn, has led to our long term success.

During the recent downturn in the industry, we have not just outperformed our industry peers; as noted earlier, we were the only publicly traded homebuilder to remain profitable in each of the last seven years (with only one loss quarter during that time). While we consider our performance a success, we recognize it was diminished from the strong performance of the peak years in the industry (pre-2006).

Our compensation philosophy has matched our business philosophy in its focus on taking a long-term view and focusing on delivering performance. Therefore, as we managed through this difficult environment, we:

did not follow others in our industry that changed their compensation plans by issuing discretionary bonuses or changing the criteria on which incentive programs are based to compensate our named executive officers for diminished performance. Instead, our executive compensation actions reflected our need to remain focused on maintaining fiscal discipline, and included freezing management salaries, limiting annual bonus awards, and, consistently throughout the entirety of the cycle, maintaining strong linkage between long term shareholder value creation and management compensation. The limits placed on our named executive officers’ cash compensation during this period have been consistent with the cost saving measures taken across the business during this downturn.

made periodic grants of equity with longer than market competitive vesting in order to encourage a long-term shareholder focused orientation and to better retain our key leaders and managers.

The following table illustrates the limits placed on our named executive officer cash compensation during the last five years (bonus earned is expressed as a percentage of base salary, because as noted below, we cap the annual cash bonus opportunity of our named executive officers at 100% of base salary).

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Base Salary Increases and Bonus Percent Earned

Name

  2008  2009  2010  2011  2012 

Paul C. Saville

(CEO)

      

Base salary increase

   0%   0%   0%   0%   0% 

Bonus earned

   0%   50%   60.2%   0%   100% 

Dennis M. Seremet

(CFO)

      

Base salary increase

   10.5%   0%   0%   0%   0% 

Bonus earned

   0%   50%   60.2%   0%   100% 

Robert W. Henley

(NVRM President)

      

Base salary increase

   17.7%   0%   5.0%   3.9%    (1) 

Bonus earned

   0%   50%   60.2%   5.8%   100% 

Eugene J. Bredow

(VP and Controller)

      

Base salary increase

   N/A    N/A    N/A    N/A    N/A (2) 

Bonus earned

   N/A    N/A    N/A    N/A    100% 

(1)Mr. Henley was promoted from VP and Controller to NVR Mortgage Finance, Inc. President in 2012. At the time of his promotion, his annual salary was increased to reflect the change in his duties. See2012, 2011 and 2010 Compensation below.
(2)Mr. Bredow was promoted to VP and Controller in 2012. Mr. Bredow was not an executive officer prior to his promotion.

In responding to the industry downturn, the above table demonstrates that we maintained fiscal discipline by having:

Frozen Mr. Saville’s salary at its 2006 level;

Awarded Mr. Seremet only one base salary increase in the last five years, and have frozen his salary at its 2008 level;

Waived, at their request, the 3.5% annual bonuses earned by Mssrs. Saville, Seremet and Henley in 2008, and the 5.8% annual bonuses earned by Mssrs. Saville and Seremet in 2011; and

Reduced the maximum bonus opportunity for 2009 by 50% for the named executive officers. Prior to 2012, 2009 was the only year since 2005 that we otherwise would have achieved the maximum bonus of 100% of base salary.

We have held the named executive officers’ total target annual cash compensation below the 50th percentile relative to comparable positions in other publicly traded companies within our industry. We have continued to place our focus relative to our annual bonus opportunity on maintaining profitability and generating sales.

As to the equity component of the named executive officers’ compensation, the long-term results depicted above are the reason we place the bulk of their compensation opportunity in periodic grants of long-term equity with a long-term vesting schedule. This helps ensure that the named executive officers are focused on driving the execution of our business strategies over a multi-year period to generate sustained success, and are not focused on short-term quarterly or annual achievements that may not build long-term shareholder value. We do not issue equity awards to

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executive officers annually. With the exception of grants made in 2012 due to promotions, we have only issued grants to our named executive officers once in the last three years under our on-going long term incentive program, the last time being May 2010 after our shareholders approved the 2010 Equity Incentive Plan.

We believe the issuance of long-term equity awards allows us to achieve two of our most important strategic objectives in addition to the goal of focusing the named executive officers on the creation of long-term shareholder value. First, it dramatically aids our retention efforts; as of December 31, 2012, Mr. Saville has been employed with NVR for 32 years, Mr. Seremet for 25 years, Mr. Henley for 18.5 years, and Mr. Bredow for 8.5 years. Second, each equity award ties the named executive officer to non-compete provisions that further protect our business interests.

General Compensation Philosophy and Objectives

Our philosophy for compensating our named executive officers is to place significant focus on, and reward achievement of, long-term objectives, which we believe is essential considering the cyclical nature of the industry in which we operate. Residential real estate projects often take a substantial period of time to mature. A typical community in which we sell and build homes may take anywhere from one year to five years to build out completely. For us to be successful, it is necessary for us to acquire control of land upon which to build our homes from land developers several years in advance of our sales and construction activities. The homebuilding industry is cyclical and exhibits peaks and troughs over a long-term period. Because we need to effectively manage our business over these lengthy time periods and during different stages of the homebuilding cycle and economic cycles, we believe that the majority of our named executive officers’ compensation should be based on accomplishing our long-term plans and objectives, and not on short-term quarterly or annual measures. We do thisfocus our named executive officers on long-term objectives over the entire cycle by limiting short-term cash compensation opportunities and emphasizing long-term earning opportunities through ownership of our common stock. Specifically, we have historically:

 • 

targeted and paid cash compensation to our named executive officers based on their positions, and in amounts that we believe to be lowerless than the 50th percentile relative to comparable positions in other publicly traded companies within our industry;

•capped the annual cash bonus opportunity of our named executive officers at 100% of their base salary, and have not provided any opportunity to exceed that amount for short-term quarterly or annual performance in excess of our business plan (for 2009, the maximum cap was reduced to 50% as a cost savings measure); and
•issued our named executive officers periodic (though not annual) grants of fixed-price stock options that vest over a long period of time. Historically, we have layered our option grants such that each named executive officer has one grant that is actively vesting over a four-year period and another grant that will begin vesting in the following four to five year period.

capped the annual cash bonus opportunity of our named executive officers at 100% of their base salary, and have not provided any opportunity to exceed that amount for short-term quarterly or annual performance in excess of our annual business plan; and

issued our named executive officers periodic (though not annual) equity grants that vest over a long period of time.

A long-term equity interest in our company by our named executive officers is the major thrust of our philosophy. We believe that providing the majority of their compensation in the form of fixed price stock optionsequity grants with a long-term vesting schedule is an effective way to retainalign their interests with the creation of long-term shareholder value. Further, it assists us in retaining their services, and the services of all of our other management employees compensated in the same manner, over a long-term period. Additionally, each stock optionequity grant agreement contains non-compete provisions that protect our interests. Retention of our experienced management team, which includes our named executive officers, has been and will continue to be one of our key strategic goals in managing our business.

We also require our named executive officers to continuously own Common Stock with a market value of four to eight times their respective base salaries, depending on position. To encourage further equity ownership, we give each of our named executive officers, at histheir choice, the opportunity to defer salary and any earned annual bonus awards into our deferred compensation plan. All deferred amounts must be invested solely in our common stock and are paid out only after separation of service. We also require our named executive officers to own continuously common stock with a market value of four to eight times their respective base salariesservice (see theDeferred Compensation Plan PlansandStock Holding RequirementRequirementsdiscussions below, respectively).Webelow). We believe that fostering a long-term focus through equity compensation and ownership effectively aligns our named executive officers’ interestinterests with those of our shareholders.

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Current Year Overview
     As stated above, the homebuilding industry is cyclical. In 2009, NVR, like other U.S. homebuilders, experienced a continuation of the severe downturn in the U.S. housing market and the overall economy that began in the latter half of 2005. As such, we have engaged in a relentless effort to control the costs of running our business. We continued to build on cost reduction savings in 2009, which to date have encompassed closing operating divisions, reducing over 50% of our workforce and eliminating or modifying certain employee benefits. Our efforts to control compensation costs have spanned all levels within our organization, including impacts to our named executive officers. Those impacts include:
•Mr. Schar relinquished his executive officer title effective February 4, 2009, and is no longer an employee of NVR. He remains as the Chairman of the Board. Prior to making that decision, in November 2008, Mr. Schar had again voluntarily amended his employment agreement to reduce his 2009 salary and bonus opportunity to $0 for the third consecutive year as a cost savings measure;
•At Mr. Saville’s request, the Compensation Committee froze his base salary at its 2006 level for the third consecutive year as a cost savings measure, despite his leadership during a period in which NVR has significantly outperformed the industry;
•Mssrs. Inman’s, Seremet’s and Henley’s 2009 salaries were also frozen at their 2008 levels; and
•The maximum annual incentive opportunity for the named executive officers was reduced from 100% of base salary to 50%.
     These actions were taken despite NVR’s industry leading performance through this economic downturn to ensure that our cost structure would enable us to be profitable with the lower revenue levels that we are experiencing. NVR has continued to operate profitably, distinguishing itself as the only public homebuilder to remain profitable at this point in the cycle. Our industry leadership has been present throughout the downturn. We were the only homebuilder of the 12 homebuilders on a national level to operate profitably for the 2009 and 2008 fiscal years, and for 2007, we were one of only three profitable homebuilders among the top 12. Although the Compensation Committee believes management compensation is at the low end of the industry, the Committee agreed with management’s recommendation to continue to control compensation costs in light of our substantially reduced activity and net income levels, and our lower stock price and resulting shareholder returns.
Compensation Determination Process
     As a general matter,

Input of Management

Mr. Saville and our Senior Vice President of Human Resources make recommendations to the Compensation Committee with respect to the amount of each element of compensation paid to each named executive officer, other than Mr. Saville. These recommendations are partially based on salary information for comparable positions at other large, publicly traded homebuilding and mortgage companies, as well as Mr. Saville’s subjective assessment of each officer’s overall performance during the prior year. The Committee reviews this same salary information, as well as comparative financial measures (our financial and operating performance compared to information publicly-availablepublicly available on our industry peers) and our overall financial strength for purposes of determining the compensation paid to Mr. Saville. Our Compensation Committee, which is comprised solely of independent members of the Board, has the final authority to determine

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the compensation of our named executive officers, and exercises such authority regardless of what recommendations are made or information that they are provided by management.

Determining the Size of Equity Awards

When issuing the periodic equity grants (not promotion grants) under our equity plans to our named executive officers (or to any employee of our company), the Compensation Committee, with assistance from the compensation consultant engaged by the Committee, first establishes a dollar value of the total targeted compensation to be awarded by position. After determining the salary and annual bonus components for a particular year, these amounts are subtracted from the total targeted compensation for the year to derive the fair value that we want to transfer to the executive in the form of equity awards over the vesting period. On the date of grant, we divide that total equity award fair value dollar amount by the per share fair value, calculated using the Black Scholes option pricing model, to determine the number of stock options or restricted share units to award.

Although we consider this approach in determining the number of equity awards to issue to our named executive officers to be a reasoned approach using a formula that is based on a widely accepted option-pricing model, the ultimate value of the equity issued only becomes clear when they are exercised or vested, as applicable. Depending on our future stock price, any stock options may wind up being worthless, or worth much more than the fair value initially estimated. As a result, we do not consider realized or realizable gains from prior stock option grants when setting new grant amounts. We do not believe that it is a fair practice to offset current compensation by realized or unrealized stock option gains several years after the options have been issued. Our goal is that the actual gain realized on option exercise exceeds our initial estimate of fair value because gains in excess of the estimated fair value calculated on the grant date are also realized by all of our other shareholders that held our common stock over that time period. We believe that limiting potential upside on option gains does not provide an appropriate incentive for our named executive officers when focusing on long-term results, as our compensation philosophy dictates.

Use of External Consultants

In December 2007 and again in December 2009,2010, the Compensation Committee engaged Aon Hewitt Consulting to assist the Committee in formulating long term incentive plan strategies for certain of our employees, including our named executive officers. officers, the result of which was the adoption of the 2010 Equity Incentive Plan. Aon

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Hewitt’s analysis included a comparative analysis of the named executive officer base pay, annual incentive opportunities and long-term incentive compensation. To formulate the peer group data, Aon Hewitt reviewed publicly available information from:from our major competitors: Beazer Homes USA, Inc., Centex Corporation, D. R. Horton, Inc., Hovnanian Enterprises, Inc., KB Home, Lennar Corporation, MDC Holdings, Meritage Homes Corporation, Pulte Corporation, Standard Pacific Corporation, The Ryland Group, and Toll Brothers, Inc., and WCI Communities, based on publicly available data.

Elements of Compensation

Base SalaryDetermining the Size of Equity Awards

     The following actions were taken by

When issuing the periodic equity grants (not promotion grants) under our equity plans to our named executive officers (or to any employee of our company), the Compensation Committee, relative towith assistance from the named executive officers’ base salary for 2009 to aid our cost reduction efforts discussed above:

•As noted above, Mr. Schar relinquished his executive officer title effective February 4, 2009, and is no longer an employee of NVR. He remains as the Chairman of the Board. Prior to making that decision, in November 2008, for the third consecutive year, Mr. Schar voluntarily amended his employment agreement to reduce his 2009 salary and bonus opportunity to $0 as a cost savings measure. Upon the request of Mr. Schar, the Compensation Committee agreed to amend Mr. Schar’s employment agreement to reduce his 2009 salary and bonus opportunity to $0.
•Mr. Saville requested that the Committee freeze his salary at its 2006 level for the third consecutive year. The Committee granted this request, despite our industry leading financial performance during the downturn and the fact that Mr. Saville’s base salary is below the 50th percentile of other CEO’s in the Hewitt study peer group. Mr. Saville’s salary was frozen in 2010 at that same level as well.
•Mr. Saville recommended to the Committee that the salaries of Mssrs. Seremet, Henley and Inman be frozen at 2008 levels as a cost savings measure. The Committee approved that request. At this frozen level, Mr. Seremet’s and Mr. Henley’s salaries remained below the 50th percentile of comparable positions at the peer companies included in the Hewitt studies, and Mr. Inman’s annual base salary was slightly above the 50th percentile. For 2010, the salaries of Mssrs. Inman and Seremet remain frozen at 2008 levels. Mr. Henley’s salary was increasedcompensation consultant engaged by $11,000 to $231,000.

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Annual Cash Bonus
General
     The objective of the annual cash bonus portionCommittee, first establishes a dollar value of the total targeted compensation package is to focus eachbe awarded by position. After determining the salary and annual bonus components for a particular year, these amounts are subtracted from the total targeted compensation for the year to derive the fair value that we want to transfer to the executive in the form of equity awards over the vesting period. On the date of grant, we divide that total equity award fair value dollar amount by the per share fair value, calculated using the Black Scholes option pricing model, to determine the number of stock options or restricted share units to award.

Although we consider this approach in determining the number of equity awards to issue to our named executive officers to be a reasoned approach using a formula that is based on a widely accepted option-pricing model, the ultimate value of the equity issued only becomes clear when they are exercised or vested, as applicable. Depending on our future stock price, any stock options may wind up being worthless, or worth much more than the fair value initially estimated. As a result, we do not consider realized or realizable gains from prior stock option grants when setting new grant amounts. We do not believe that it is a fair practice to offset current compensation by realized or unrealized stock option gains several years after the options have been issued. Our goal is that the actual gain realized on option exercise exceeds our initial estimate of fair value because gains in excess of the estimated fair value calculated on the attainment of annual goals necessary to achieve our five-year business plan. These annual goalsgrant date are consistent with the current year’s portionalso realized by all of our five-year business plan. The named executive officers’ annualother shareholders that held our common stock over that time period. We believe that limiting potential upside on option gains does not provide an appropriate incentive opportunity has historically been capped at 100% of their base salary because of our overall compensation philosophy of limiting short-term cash compensation in favor of equity-based long-term incentive opportunities. The cap is earned once the preset performance target and attainment ranges based on the annual business plan are attained. Consistent with our cost reduction efforts, for 2009 the cap was set at 50% of base salary. The annual bonus is payable in cash, and may be deferred at the election of the named executive officer. See theDeferred Compensation Plans discussion below.

     The Compensation Committee has never exercised discretion in awarding bonuses in amounts higher from the amount calculated by our actual results relative to the preset performance target and attainment ranges. As discussed in our Proxy Statement last year, in 2008, for the first time ever, the Committee exercised negative discretion to reduce the amount of the annual bonus by agreeing to follow Mr. Saville’s recommendation to eliminate the annual incentive earned by the named executive officers. Mr. Saville’s request to eliminate the named executive officers’ 2008 earned annual incentive was based on our cost control objectives.
2009 Annual Bonus
     For 2009, the Compensation Committee maintained the same annual bonus performance metrics used in 2008 for our named executive officers withwhen focusing on long-term results, as our compensation philosophy dictates.

Use of External Consultants

In 2010, the exception of Mr. Inman. UnlikeCompensation Committee engaged Aon Hewitt to assist the Committee in 2008 when Mr. Inman’s bonus opportunity was based on 1) our mortgage banking operations pre-tax profit (before annual bonus expense, stock-based compensation expense andformulating long term incentive plan strategies for certain corporate overhead cost allocations), 2) the return on invested capital in the mortgage operations and 3) on our new orders (net of cancellations), for 2009, Mr. Inman’s bonus opportunity was based on the same metrics as Mssrs. Saville, Seremet and Henley to emphasize that our captured mortgage business, for which Mr. Inman serves as President, is an integral component of the success of our core homebuilding business. The annual bonus opportunity in 2009 for Mr. Saville, Mr. Inman, Mr. Seremet and Mr. Henley was based 80% uponemployees, including our consolidated pre-tax profit (before consolidated annual bonus and stock-based compensation expense but after all other charges) and 20% based on the number of new orders (net of cancellations) that we generated compared to our 2009 annual business plan. Mssrs. Saville, Inman, Seremet and Henley were to begin earning the consolidated pre-tax profit portion of their annual bonus award once the annual business plan was at least 80% attained (the “threshold”). The full amount of the consolidated pre-tax profit portion of their annual bonus award was to be earned ratably from 80% up to 100% achievement of the annual business plan. Mssrs. Saville, Inman, Seremet and Henley were to begin earning the new orders unit portion of their annual bonus award once the annual business plan was at least 85% attained. The full amount of the new orders unit portion of their annual bonus award was to be earned ratably from 85% up to 100% achievement of the annual business plan.

     Based on our 2009 results, Mssrs. Saville, Inman, Seremet and Henley earned 100% of their maximum bonus opportunity of 50% of base salary. See theNarrative Disclosure to Summary Compensation and Grants of Plan-Based Awards Tablesbelow for the actual performance targets for 2009.

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2010 Annual Bonus
     Our operating activity levels, net income and stock performance have increased substantially in 2009 from 2008 levels. These results led the Committee to restore the maximum bonus opportunity for 2010 to 100% of base salary from the temporary 50% maximum cap installed in 2009 as a cost savings measure. The capped feature is being maintained, thus achievement of results which exceed the business plan will not result in the payment of a bonus exceeding 100% of base salary. For 2010, we are maintaining the same annual bonus performance metrics and the relative weight assigned to each metric for the named executive officers, as existed in 2009.
Fixed Price Stock Options
Prior Stock Option Plans
     Historically, the potential single largest componentresult of each named executive officer’s total compensation package has been realized throughwhich was the grant of fixed-price stock options, in which most of our management group participates.
     We do not issue stock option grants annually. Our historical practice has been to structure equity awards to vest over a long-term period. Noneadoption of the four stock option grants made to the named executive officers prior to the 2008 grant had options scheduled to vest within the first four and one-half year period from the grant date (see discussion below on 2008 option grants). The average length of time for full vesting of stock options granted under those grants was seven and one half years from the date of grant. In addition, we historically have layered our stock option grants to the executives such that there is one grant actively vesting over2010 Equity Incentive Plan. Aon

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Hewitt’s analysis included a four-year period, and another grant that will begin vesting in the following four to five year period. Following is a summary of the material terms of the five most recently issued stock option grants:

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2008 Grant
TermFrom 2000
Description1996 Plan1998 Plan2000 Plan2005 PlanPlan
Exercise priceMarket value on date of grantMarket value on date of grantMarket value on date of grantMarket value on date of grantMarket value on date of grant
Repricing requires
shareholder approval		NoYesYesYesYes
Date options were granted to named executive officersMay 30, 1996May 26, 1999May 3, 2001May 26, 2005January 3, 2008
Vesting ConditionsContinued
employment at
vesting dates		Continued
employment at
vesting dates		Continued
employment at
vesting dates		Attainment of EPS Target (as defined below), then continued employment at vesting datesContinued
employment at
vesting date
Vesting period for
named executive
officers		One-third on each of December 31, 2000, 2001 and 2002One-third on each of December 31, 2003, 2004 and 2005One-quarter on each of December 31, 2006, 2007, 2008 and 2009If EPS Target achieved, one-quarter on each of December 31, 2010, 2011, 2012, and 2013December 31, 2010
Period from grant date to full vestingSix years and seven monthsSix years and seven monthsEight years and eight monthsEight years and seven monthsThree years
     We have consistently sought improvements in our equity compensation plans to ensure that the majoritycomparative analysis of the named executive officers’ potential compensation is effectively aligned with our shareholders. For example, all plans implemented after the 1996 Plan require shareholder approval to reprice options. This feature was added after we independently recognized the importance of shareholder-controlled repricing,officer base pay, annual incentive opportunities and years before the NYSE’s amended listing rules took effect in 2003 mandating shareholder approval to reprice options. No options granted under the 1996 Plan, however, have ever been repriced. For the 2000 and 2005 Plans, the period from grant date to full vesting was increased by more than two years as compared to the 1996 Plan, to almost nine years from the original grant date. We increased the full vesting time period to increase the retention value of such awards.
     For the 2005 Plan, we revised our option program to require both performance and service-based vesting conditions. The performance requirement was added as a vesting condition to our stock option program to ensure that potential share dilution from stock option exercises only occurred if our performance provided a 10% compound annual growth in earnings per share over the four-year measurement period. Under this plan, no option would have become exercisable unless a performance target based on growth in diluted earnings per share (the “EPS Target”) was met. The EPS Target was set at a level that reflected a growth rate in diluted earnings per share of 10% per year for four years,

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based on our 2004 diluted earnings per share of $66.42, amounting to aggregate EPS of $339.00 per share over the four-year period ending December 31, 2008.
     However, we failed to meet the 4-year aggregate performance measure and the grants made to all plan participants, including the grants made to the named executive officers, expired unexercised on December 31, 2008. Further, because the EPS Target was a condition of the plan itself, the 2005 Plan has expired and no further stock options grants may be made under it. Had the EPS Target been attained as the first condition of vesting, the stock option grants issued under the 2005 Plan would have vested in 25% increments on December 31, 2010, 2011, 2012 and 2013 based on continued employment.
     We recognized in mid-2007 that we would not attain the EPS Target based on the sharply declining market conditions we were experiencing, our results for the three year period to date, and our lowered expectations for 2008. Our Compensation Committee was also aware that the last vesting year for the options granted under the 2000 Plan was 2009, meaning that without the 2005 Plan, our named executive officers, as well as all of our key management team, would no longer be participating in a long term incentive plan past December 31, 2009.
     We believe that an effective long term incentive plan, preferably an equity plan, is essential to the retention of our named executive officers and key managers, and it was particularly essential as we managed through the still challenging homebuilding market. However, in late 2007, we believed that it was unlikely that we could obtain shareholder approval of a new option plan due to the dilutive effect of our “overhang,” (“overhang” being the total outstanding stock options divided by the total outstanding shares). Given these circumstances, the Compensation Committee engaged Hewitt Associates to assist us in developing a short term solution to the absence of a long-term incentive plan for our employees. After evaluating several alternatives withcompensation. To formulate the peer group data, Aon Hewitt including cash-based awards that included stock appreciation rights, the Compensation Committee decided to make new option grants to the named executive officers and other key employees using the limited number of unissued stock options remainingreviewed publicly available under existing plans, primarily the 2000 Plan. See the2009 Summary Compensation Tableand theOutstanding equity Awards at December 31, 2009 Tablefor further information on the specific grants made to the named executive officers in 2008.
     At the time of the January 3, 2008 option grants, we would have preferred to have continued our historical “layered” approach of granting options such that there is one grant actively vesting over a four-year period, with another grant in a four to five year pre-vesting period (in essence, two plans outstanding at any given time). However, we did not have a sufficient number of stock options available to us under existing plans to issue competitive, retentive grants to our named executive officers and other key employees beyond 2010.
Future Equity Plan
     While the termination of the 2005 Plan required us to select the short-term 2008 alternative approach that we did, entering 2009, we were still faced with having no long-term incentive plan post-December 31, 2010 for our named executive officers and other key managers. In addition to our belief that an effective long term incentive plan is essential to the long-term retention of our named executive officers and key managers, which is and always has been one of our key business strategies, we recognized that we were faced with certain immediate employee retention issues. First, as general market conditions begin to improve, we are more vulnerable than we were in 2007 and 2008 to employee turnover as our competitors begin to expand under the improved conditions. In addition, our success during the downturn has led to more of our competitors moving towards the “asset lite”

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business model that we have successfully employed, a strategy that has resulted in us being the only homebuilder to operate profitably among the nation’s top 12 largest homebuilders in 2009 and 2008. This increases the risk that our competitors will attempt to hire away our key managers who are expertly versed in our “asset lite” model. Further, we are faced with the risk that we could lose a certain demographic segment of our key management group to retirement before succession candidates are adequately trained and experienced.
     These factors led the Compensation Committee to again engage Hewitt in late 2009 to assist us in formulating a long-term solution. After careful consideration of various long-term incentive vehicles by the Compensation Committee, with Hewitt’s and management’s participation, we have concluded to seek approval from our shareholders for a new long-term equity incentive plan at the 2010 Annual Meeting (seeProposal Number 4). This option was chosen as the solution because the usemajor competitors: Beazer Homes USA, Inc., D. R. Horton, Inc., Hovnanian Enterprises, Inc., KB Home, Lennar Corporation, MDC Holdings, Meritage Homes Corporation, Pulte Corporation, Standard Pacific Corporation, The Ryland Group, and Toll Brothers, Inc.

Elements of an equity-based plan:

•continues what has been a proven, successfully retentive compensation tool for us;
•is ingrained in the culture of the company, with compensation historically weighted towards long-term growth in earnings per share;
•aligns long-term compensation to the creation of long-term shareholder value;
•directly assists employees in complying with our stock holding requirements;
•provides a non-cash, fixed and determinable compensation charge; and
•provides a vehicle to which our non-compete and other restrictive employment covenants can be tied.
     To combat the retention risks noted above, if approved, we are altering our historical approach and intend to issue half of the total award value in time-vested restricted share units that will vest in 2011 and 2012, and half of the award value in fixed-price stock options that will vest in 2013 and 2014. The restricted share units aid in bridging the impact caused by the termination of the 2005 Option Plan so that we can return to our preferred method of solely issuing fixed-price stock options. The Compensation Committee discussed the advisability of using a performance metric to earn the restricted share units; however, after fully vetting the matter, it was determined to be inappropriate due to the current unstable business climate. We have performed macro-level calculations to determine the 700,000 share size for which we are seeking shareholder approval, which is intended to provide grants to both current and future employees as we hire for future growth. However, we have not yet specifically set grant awards for any of the intended current participants, including for the named executive officers.
     As is our practice in all facets of our business, we are acting with transparency in seeking shareholder approval of something that we consider to be of critical importance in the success of our business, and in the best interests of our shareholders. In the event that we are unable to obtain shareholder approval at the 2010 Annual Meeting for the proposed equity incentive plan, we will still be faced with the significant employee retention risk of not having an LTIP for our key management team post-December 31, 2010. It will be incumbent on us to seek to mitigate that material risk to protect the long term interests of the Company and our shareholders. Thus, in that event, we plan to seek Hewitt’s assistance to develop a long-term compensation plan that will be available to us without shareholder approval, which would likely take the form of a cash-based plan. While that is clearly not

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our preferred course of action, we believe that a long-term incentive plan is essential to sustaining our business at this critical juncture.
Determining the Size of Equity Awards

When issuing the periodic equity grants (not promotion grants) under our equity plans to our named executive officers (or to any employee of our company), the Compensation Committee, with assistance from the compensation consultant engaged by the Committee, first establishes a dollar value of the total targeted compensation to be awarded by position. After determining the salary and annual bonus components for a particular year, these amounts are subtracted from the total targeted compensation for the year to derive the fair value that we want to transfer to the executive in the form of equity awards over the vesting period. On the date of grant, we divide that total equity award fair value dollar amount by the per share fair value, calculated using the Black Scholes option pricing model, to determine the number of equity awardsstock options or restricted share units to award.

Although we consider this approach in determining the number of equity awards to issue to our named executive officers to be a reasoned approach using a formula that is based on a widely accepted option-pricing model, the ultimate value of the optionsequity issued only becomes clear when they are exercised.exercised or vested, as applicable. Depending on our future stock price, theany stock options may wind up being worthless, or worth much more than the fair value initially estimated. As a result, we do not consider realized or realizable gains from prior stock option grants when setting new grant amounts. We do not believe that it is a fair practice to offset current compensation by realized or unrealized stock option gains several years after the grantsoptions have been issued. Our goal is that the actual gain realized on option exercise exceeds our initial estimate of fair value because gains in excess of the estimated fair value calculated on the grant date are also realized by all of our other shareholders that held our common stock over that time period. We believe that limiting potential upside on option gains does not provide an appropriate incentive for our named executive officers when focusing on long-term results, as our compensation philosophy dictates.

Use of External Consultants

In 2010, the Compensation Committee engaged Aon Hewitt to assist the Committee in formulating long term incentive plan strategies for certain of our employees, including our named executive officers, the result of which was the adoption of the 2010 Equity Incentive Plan. Aon

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Hewitt’s analysis included a comparative analysis of the named executive officer base pay, annual incentive opportunities and long-term incentive compensation. To formulate the peer group data, Aon Hewitt reviewed publicly available information from our major competitors: Beazer Homes USA, Inc., D. R. Horton, Inc., Hovnanian Enterprises, Inc., KB Home, Lennar Corporation, MDC Holdings, Meritage Homes Corporation, Pulte Corporation, Standard Pacific Corporation, The Ryland Group, and Toll Brothers, Inc.

Elements of Compensation

Base Salary

The following actions were taken by the Compensation Committee relative to the named executive officers’ base salaries for 2012:

•

Mr. Saville requested that the Committee freeze his salary at its 2006 level for the sixth consecutive year. The Committee granted this request, despite our industry-leading financial performance during the downturn and the fact that Mr. Saville’s base salary was below the 50th percentile of other CEO’s in the 2010 Aon Hewitt study peer group.

•

Mr. Saville recommended to the Committee that the salary of Mr. Seremet be frozen at its 2008 level. The Committee approved that request. At this frozen level, Mr. Seremet’s salary remained below the 50th percentile of other CFO’s in the 2010 Aon Hewitt study peer group.

•

Mr. Henley’s 2012 salary was increased by $8,000 to $248,000 effective April 1, 2012 while he was the Vice President and Controller. Mr. Henley was promoted to interim acting President of NVR Mortgage Finance, Inc. (“NVRM”) effective June 1, 2012 and was named the President of NVRM on a permanent basis effective October 1, 2012. The Committee increased Mr. Henley’s salary to $300,000 on June 1, 2012 and to $350,000 on October 1, 2012, which is consistent with the salary of Mr. Henley’s predecessor and less than the 50th percentile of comparable salaries within the 2010 Aon Hewitt study peer group.

•

Mr. Bredow was promoted to Vice President and Controller effective June 1, 2012 to replace Mr. Henley. The Committee set Mr. Bredow’s salary at $220,000, which is below the salary of Mr. Bredow’s predecessor and less than the 50th percentile of comparable salaries within the 2010 Aon Hewitt study peer group.

Mr. Saville recommended to the Committee that the salary of Mr. Goethe, who terminated employment with us effective July 31, 2012, be frozen at its 2010 level, which the Committee approved.

Stock OptionAnnual Cash Bonus

General

The objective of the annual cash bonus portion of the total compensation package is to focus each of the named executive officers on the attainment of annual goals we believe are necessary to achieve our five-year business plan. These annual goals are consistent with the current year’s portion of our five-year business plan. The named executive officers’ annual incentive opportunity has historically been capped at 100% of base salary, regardless of whether the goals are exceeded, because of our overall compensation philosophy of limiting short-term cash compensation in favor of equity-based long-term incentive opportunities, which drives a long-term orientation. Thus, the maximum

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amount of bonus is earned once the preset performance targets based on the annual business plan are attained. The annual bonus is payable in cash, and may be deferred at the election of the named executive officer. See theDeferred Compensation Plans discussion below. The total target annual cash compensation for each of the named executive officers, comprised of base salary and the maximum annual incentive opportunity, is below the 50th percentile of comparable target total annual cash compensation contained within the 2010 Aon Hewitt study peer group.

The Compensation Committee has never exercised discretion to award bonuses in amounts higher than the amount calculated by our actual results relative to the preset performance target and attainment ranges. In 2008, for the first time ever, the Committee exercised negative discretion to reduce the amount of the annual bonus by agreeing to follow Mr. Saville’s recommendation to eliminate the annual incentive earned by the named executive officers. Mr. Saville’s request to eliminate the named executive officers’ 2008 earned annual incentive was based on our cost reduction efforts. The Committee exercised such negative discretion again in 2011 when agreeing to Mr. Saville’s recommendation to eliminate the 2011 annual incentive earned by Mssrs. Saville and Seremet consistent with our cost reduction efforts.

2012 Annual Bonus

For 2012, the Compensation Committee maintained the same annual bonus performance metrics used in 2011 for our named executive officers. The annual bonus opportunity in 2012 for Mssrs. Saville, Seremet, Henley and Bredow was based 80% upon our consolidated pre-tax profit (before consolidated annual bonus and stock-based compensation expense but after all other charges) and 20% based on the number of new orders (net of cancellations) that we generated compared to our 2012 annual business plan. We believe that these measures provide a proper balance of focusing on current profitability while providing for longer-term growth.

Mssrs. Saville, Seremet, Henley and Bredow were to begin earning the consolidated pre-tax profit portion of their annual bonus award once the annual business plan was at least 80% attained (the “threshold”). The full amount of the consolidated pre-tax profit portion of their annual bonus award was to be earned ratably from 80% up to 100% achievement of the annual business plan. Mssrs. Saville, Seremet, Henley and Bredow were to begin earning the new orders unit portion of their annual bonus award once the annual business plan was at least 85% attained. The full amount of the new orders unit portion of their annual bonus award was to be earned ratably from 85% up to 100% achievement of the annual business plan. Mr. Goethe’s annual bonus performance metrics were the same as those of the other named executive officers except that his opportunity was subject to a pro-rata reduction, limited to a maximum of 20%, based on the internal audit results of the operations under his direct management.

Based on our 2012 results, Mssrs. Saville, Seremet, Henley and Bredow earned 100% of their maximum bonus opportunity of 100% of base salary. Mr. Goethe also earned 100% of his maximum bonus opportunity, reduced by 0.9% for internal audit results, of 100% of base salary for the portion of the year he was employed by us. For further details regarding the bonuses earned for 2012, and the performance metrics for the 2012 annual bonus, see theNarrative Disclosure to Summary Compensation and Grants of Plan-Based Awards Tables below for the actual performance targets for 2012.

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2013 Annual Bonus

For 2013, we are maintaining the same annual bonus performance metrics and the relative weight assigned to each metric for the named executive officers as existed in 2012. As in prior years, the capped feature is being maintained, thus achievement of results which exceed the business plan will not result in the payment of a bonus exceeding 100% of base salary. Mr. Henley’s 2013 bonus opportunity will be subject to a pro-rata reduction, limited to a maximum of 20%, based on the internal audit results of the operations under his direct management.

Equity-Based Compensation

2012 Equity Grants to the Named Executive Officers

The only equity grants made to executive officers in 2012 were to Mssrs. Bredow and Henley and were related to their promotions. The Committee granted 8,000 stock options to Mr. Bredow when he was promoted to Vice President and Controller on June 1, 2012. In addition, the Committee granted 10,000 stock options to Mr. Henley when he was promoted to President of NVRM on a permanent basis on October 1, 2012. The stock option grants to Mssrs. Bredow and Henley vest 25% on each of December 31, 2014, 2015, 2016 and 2017. These grants were made solely in connection with the promotions and reflect the increased responsibilities they assumed.

There were no equity grants made to Mssrs. Saville or Seremet in 2012.

Equity Grant Practices

We do not have a program, plan or practice in place to grant optionsequity in coordination with the release of material non-public information. The timing of the January 2008 grant was predicated on our determination and announcement that the 2005 Plan was expected to terminate due to our failure to achieve the EPS Target. Our Compensation Committee has sole authority to grant optionsequity to the named executive officers, and the grant date is the date of Compensation Committee approval of the awards. We grant stock optionsequity once per month to new employees and newly promoted employees. The grant date for these awards is the first of the month following the new hire or promotion date (or the first of the second month if the new hire or promotion occurs after the 20th day of the month).

2013 and Beyond

As the housing market has started improving, the Committee has begun evaluating the cash compensation of the executive officers relative to other publicly traded companies within our industry. In late 2012, the Committee engaged Aon Hewitt to assist the Committee in reviewing our long term incentive plan strategies for certain of our employees, which includes an analysis of the annual salary, annual incentive opportunity and long-term incentive plan compensation available to our named executive officers as compared to our peer group. The purpose of this review is to ensure that the compensation of our executive officers remains competitive in the market, considering that our CEO’s annual salary has been frozen since 2006. As a result of this review, the annual base salaries of certain of our executive officers are being increased in April 2013. The Committee believes the increases are appropriate considering the performance of the Company and the management team during the housing downturn.

The Committee recognizes that the current outstanding equity grants for Mr. Saville and the majority of other key managers will be fully vested at the end of 2014. The Committee is evaluating potential long term incentive plan options to ensure that the named executive officers and other key managers are retained and incentivized as the housing market continues to improve. We believe that

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without an effective long term incentive plan, we are vulnerable to employee turnover as our competitors attempt to hire away our key managers. The Committee is considering various alternatives, which may include the issuance in 2013 of a portion of the remaining shares available under the 2010 Equity Plan to extend the term of the 2010 Plan.

We are also continuing our discussions with our shareholders regarding our compensation philosophies and practices. The Committee expects to continue evaluating and adjusting the components of the executive officers’ compensation as the housing market continues improving.

Stock Ownership Guidelines

To complete the linkage between the interests of our senior management with our shareholders, we adopted stock ownership guidelines in 2000. These guidelines require the named executive officers (and certain other members of senior management) to acquire and continuously hold a specified minimum level of our shares for so long as we employ them in their respective positions. The Board of Directors determined the holding requirements for the named executive officers based on a review of the publicly-availablepublicly available stock holding policies for other publicly traded companies within our industry. Under our holding requirements, our named executive officers must acquire and hold shares with a total fair market value ranging from four- to eight-times their annual base salaries depending on position. For 2009,2012, the holding requirements for each of the named executive officers were as follows:

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Name

  Base Salary   Factor  Dollar Holding
Requirement		 

Paul C. Saville

  $800,000    8  $6,400,000  

Dennis M. Seremet

  $475,000    6  $2,850,000  

Robert W. Henley

  $350,000    4  $1,400,000  

Eugene J. Bredow

  $220,000    4  $880,000  

             
          Dollar Holding
Name Base Salary Factor Requirement
Dwight C. Schar (1)  —   —   — 
Paul C. Saville $800,000   8  $6,400,000 
William J. Inman $430,000   4  $1,720,000 
Dennis M. Seremet $475,000   6  $2,850,000 
Robert W. Henley $220,000   4  $880,000 
(1)Subsequent to February 4, 2009, the date upon which Mr. Schar relinquished his executive officer title, he has been subject to the Board stock holding requirement of $130,000.
Any named executive officer who does not meet his requirement must retain 100% of the net common stock received upon the vesting of restricted share units and 50% of the net common stock received from option exercises until the holding requirement is attained. “Net common stock received” means the common stock received after the payment of the optionexercise price, if any, and the taxes withheld related to the vesting of the restricted share unit or the option exercise. All of the named executive officers are currently in compliance with our stock ownership guidelines.

Pledging/Hedging of NVR Stock

Our Board of Directors has adopted a policy that prohibits directors and named executive officers from hedging or pledging NVR stock that they own.

Personal Benefits

Our named executive officers are entitled to and eligibleonly for the same personal benefits for which all of our employees are eligible. We do not have programs in place to provide personal benefits for any employee. Our healthcare and other insurance programs, including the program’s participation costs, are the same for all eligible employees. Our annual discretionary contribution to the NVR Employee Stock Ownership Plan, expressed as a percentage of eligible wages, and our NVR 401(k) matching contribution, is also the same for all eligible employees, subject to all applicable IRS contribution limits and formulas for plans of these types. Further, we do not offer defined benefit pension or supplemental executive retirement plans to any of our employees. For 2009, as a cost savings measure, the 401(k) match for all employees, including the named executive officers, was suspended. The 401(k) match was reinstated for 2010.

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Deferred Compensation Arrangements

We have two deferred compensation plans, which we refer to as plans 1 and 2, respectively, for purposes of this discussion.plans. We provide deferred compensation plans for three reasons: i) to encourage ownership of our common stock in furtherance of our compensation philosophy, ii) to establish a vehicle whereby named executive officers may defer the receipt of salary and bonus that otherwise would be nondeductible for company tax purposes into a period where we would realize a tax deduction for the amounts paid (see belowTax Deductibilitydiscussion), and iii) to enable our named executive officers, and other members of management, to acquire shares of our common stock on a pre-tax basis in order to more quickly meet, and maintain compliance with, the stock holding requirements described above. In addition, the structure of our deferred compensation plans effectively increases the stock holding requirements for certain of our named executive officers, and places the earned compensation “at-risk” during the executive officer’s deferral period. Plan 1, which we adopted December 15, 1999, was closed for new contributions effective December 31, 2004. The named executive officers, solely at their election, may defer 100% of any earned salary or bonus into plan 2, which we adopted December 15, 2005. Stock option gains are prohibited by law from being deferred.

The market value of a named executive officer’s deferred compensation accounts is not considered when setting histheir other current compensation. The compensation earned and deferred was already reviewed and analyzed based on the above-described compensation philosophy and policies at

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the time the compensation was earned. Had the executive officer instead elected to receive a payout of the compensation at the time it was earned, and then invested those amounts externally, we would have no knowledge of and would not have considered external investment experience when considering the amount by which we should compensate the executive officer. Thus, we do not believe it is either proper or necessary to consider the value of the executive officer’s deferred compensation account just because it is held in a plan we sponsor and is invested in our stock. In addition, had the amounts not been deferred been insteadbut rather paid to the applicable named executive officer when earned (and not deferred until separation of service), we would have lost a substantial tax benefit that we will now receive as a result of the deferral. See theNonqualified2012 Non-Qualified Deferred Compensation Tableand accompanying narrative below for additional information on our deferred compensation plans.

Change of Control and Severance Payments

Each of our named executive officers other than Mr. Henley, is party to an employment agreement with us pursuant to which the officer is entitled to severance payments upon certain termination events, including termination following a change in control. Generally, we do not believe that we should pay our named executive officers, or any other employee, any incremental compensation upon termination when the termination is either by choice or due to conduct that is potentially detrimental to NVR. Thus, we do not provide any of our named executive officers any incremental severance benefits, other than any amounts already earned and accrued at the date of termination, if the termination is voluntary (unless due to a change in control of NVR or retirement), including voluntary termination upon the election or appointment of a new Chairman and/or CEO, or for “Cause.”

We do not provide tax “gross ups” to our named executive officers in connection with any change in control or severance payment.

Change of Control Provisions

Change of control provisions applicable to our named executive officers are either “single trigger”,trigger,” meaning that the change of control event alone triggers either a payment or an acceleration of certain rights, or “double trigger”,trigger,” meaning that the change of control coupled with the officer’s termination from service within a certain period of the time after the change of control triggers a payment or accelerated right.

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The change of control provision in each applicable named executive officer’s employment agreement for the payment of severance is a double trigger. A double trigger for severance payments was selected because, unless the named executive officer’s employment is terminated after the change in control, his cash compensation in the form ofacquiring entity will continue to pay his salary and annual bonus, would continue from the acquiring entity, which isare what the severance payment is based upon and intended to replace. See theNarrative Disclosures of Termination and Change of Control Paymentsdiscussion below for additional information on these severance payments.

The change of control provisions in the stock option agreements and the deferred compensation plans are single trigger, reflecting our intent that the named executive officers have the ability to usevote those shares to vote upon any proposed transaction, and to ensure that the named executive officers receive deferred compensation to which they are entitled.

Retirement and Severance Payments

Each of the employment agreements provides for a two-month severance benefit of two months’ salary and two months’ pro-rated annual bonus upon the named executive officer’s termination due to death or disability. This amount reflects what we believe

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to be a modest transition for the executive or his family for termination events that are sudden and beyond the executive’s control. WeFor Mssrs. Saville and Seremet, we provide severance benefits of 200% of base salary for terminations without cause or that are voluntary within one year after a change in control. This amount reflectscontrol, and for Mssrs. Henley and Bredow, we provide severance benefits of 100% of base salary. These amounts reflect our belief that it is difficult for executive officers to find comparable employment opportunities in a short period of time, particularly after experiencing a termination that was beyond their control. We provide a severance benefit of 100% of base salary upon retirement.retirement for Mssrs. Saville, Seremet, Henley and Bredow. We consider the 100% severance payment a nominal reward for length of service given that we do not provide our executives defined benefit or supplemental executive retirement plans.

Management of Compensation-Related Risk

We have designed our compensation programs to avoid excessive risk-taking by placing the majority of our named executive officers’ compensation opportunity in periodic grants of equity with a long-term vesting schedule, capping the annual bonus opportunity at 100% of base salary and having significant stock ownership requirements for our named executive officers.

Accounting Impact and Tax Deductibility of Compensation

Accounting Impact

We accrue our named executive officers’ salaries and bonus awards as an expense when earned by the officer. For our fixed-price stock options and restricted share unit awards, the Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”), Topic 718, requires us to recognize compensation expense within our income statement for share-based payment arrangements, which includes employee equity compensation plans.

Stock-based compensation expense when recognized is based on the grant-date fair value of the optionsequity awards granted, and is recognized ratably over the requisite service period. We adopted FASB ASC 718 under the modified prospective method. Under the modified prospective method, FASB ASC Topic 718 applies to new awards and to awards modified, repurchased, or cancelled after January 1, 2006, as well as to the unvested portion of awards outstanding as of January 1, 2006. Our stock options are accounted for as equity awards.

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Tax Deductibility

Section 162(m) of the Internal Revenue Code limits the corporate deduction for compensation paid to the named executive officers (other than our CFO) to $1 million unless such compensation qualifies as “performance-based compensation.” Among other things, Section 162(m) requires approval of the performance-based compensation by our shareholders. We have concluded that the adverse tax impact of paying salaries and bonuses to our CEO in excess of that limit was not significant enough to limit the salary and annual bonus amounts awarded. All of the compensation potentially earned by our named executive officers under our stock option plans qualifies as “performance based” under 162(m), except for grants issued under the 2000 Plan that are exercised while the named executive officer is an employee of NVR, which was not shareholder approved.

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THE FOLLOWING REPORT OF THE COMPENSATION COMMITTEE SHALL NOT BE

DEEMED TO BE “SOLICITING MATERIAL” OR TO BE “FILED” WITH THE

SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933

OR THE SECURITIES EXCHANGE ACT OF 1934 OR INCORPORATED BY

REFERENCE IN ANY DOCUMENT SO FILED.

REPORTOFTHE COMPENSATION COMMITTEE

Report of the Compensation Committee

The Compensation Committee hereby reports as follows:

 1.The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with NVR’s management; and

 2.Based on the review and discussion referred to in paragraph 1, the Compensation Committee recommended to the Board, and the Board has approved, that the Compensation Discussion and Analysis be included in our 20102013 proxy statement to be incorporated by reference in our Annual Report on Form 10-K for the fiscal year ended December 31, 2009,2012, for filing with the Securities and Exchange Commission.

The undersigned, constituting all of the members of the Compensation Committee, have submitted this report to the Board of Directors.

John M. Toups

Thomas D. Eckert (Chairman), Timothy M. Donahue, Manuel H. Johnson, David A. Preiser, W. Grady Rosier, John M. Toups and Paul W. Whetsell

33

20092012 SUMMARY COMPENSATION TABLE
                         
              Non-Equity    
Name and     Salary Option Awards Incentive Plan All Other Total
Principal Position Year ($) ($) (2) Compensation ($) Compensation ($) (3) ($)
Dwight C. Schar(1)
  2009  $0   —   —  $1,533,433  $1,533,433 
Chairman of the Board  2008  $0   —   —  $0  $0 
   2007  $0   —   —  $0  $0 
                         
Paul C. Saville  2009  $800,000   —  $400,000  $7,350  $1,207,350 
Principal Executive  2008  $800,000  $3,885,750   —  $7,400  $4,693,150 
Officer  2007  $800,000   —   —  $7,250  $807,250 
                         
William J. Inman  2009  $430,000   —  $215,000  $7,350  $652,350 
President, NVR  2008  $430,000  $1,398,870   —  $6,900  $1,835,770 
Mortgage Finance, Inc.  2007  $410,000   —  $97,278  $6,750  $514,028 
                         
Dennis M. Seremet  2009  $475,000   —  $237,500  $7,350  $719,850 
Principal Financial  2008  $475,000  $2,020,590   —  $7,400  $2,502,990 
Officer  2007  $430,000   —   —  $7,250  $437,250 
                         
Robert W. Henley  2009  $220,000   —  $110,000  $6,600  $336,600 
Principal Accounting  2008  $220,000  $932,580   —  $6,600  $1,159,180 
Officer  2007  $187,000   —   —  $5,610  $192,610 

Name and Principal Position

  Year   Salary
($)		   Stock
Awards
($) (1)		   Option
Awards
($) (2)(3)(4)		   Non-Equity
Incentive Plan
Compensation
($)		   All
Other
Compensation
($)(5)		   Total
($)		 

Paul C. Saville

   2012    $800,000     —       —      $800,000    $10,500    $1,610,500  

Principal Executive Officer

   2011    $800,000     —       —       —      $7,850    $807,850  
   2010    $800,000    $14,795,338    $14,795,325    $481,299    $7,850    $30,879,812  

Dennis M. Seremet

   2012    $475,000     —       —      $475,000    $10,500    $960,500  

Principal Financial Officer

   2011    $475,000     —       —       —      $7,850    $482,850  
   2010    $475,000    $6,259,512    $6,259,581    $285,772    $7,850    $13,287,715  

Robert W. Henley

   2012    $288,833     —      $2,077,800    $288,833    $10,000    $2,665,466  

President, NVR Mortgage (6)

   2011    $237,750     —       —      $13,758    $7,350    $258,858  
   2010    $228,250    $2,845,041    $2,845,334    $137,343    $7,350    $6,063,318  

Eugene J. Bredow

   2012    $205,740     —      $1,845,040    $205,740    $9,151    $2,265,671  

Principal Accounting Officer (7)

              
              

Robert A. Goethe

   2012    $204,167     —       —      $201,837    $200,500    $606,504  

Former President, NVR Mortgage (8)

   2011    $350,000     —       —      $19,745    $7,850    $377,595  
   2010    $327,564    $568,727    $4,153,570    $327,564    $214,215    $5,591,640  

(1)
(1)Effective February 4, 2009, Mr. Schar relinquished his executive officer title, andThe amounts disclosed represent the aggregate grant date fair value of restricted share unit grants made during 2010 in accordance with FASB ASC Topic 718, disregarding any estimate of forfeitures relating to service-based vesting conditions. The fair value valuation for restricted share units is no longer an employee of NVR. He continues to be the Chairman of the Board. As of February 4, 2009, Mr. Schar earned a retirement separation benefit equal to one times his annual salary pursuant to his employment agreement. In addition, as a non-employee director, Mr. Schar is now eligible to be paid an annual Board retainer and Board meeting fees. the market value per share of NVR stock on the date of grant, which was $703.00 per share.
(2)The amounts disclosed in the “all other compensation” column2010 for Mr. Schar in 2009 equals the $1,500,000 retirement separation benefit, which is being paid over a twelve month period beginning on the effective date, plus $23,833 paid for a pro rata portion of the annual Board retainerMssrs. Saville, Seremet and $9,600 in Board meeting fees (see the footnotes to the2009 Director Compensation Tablefor a description of these fees).
(2)The amounts disclosedHenley represent the aggregate grant date fair value of stock option grants made during the respective years in accordance with FASB ASC Topic 718, disregarding any estimate of forfeitures relating to service-based vesting conditions. The fair value valuationtranche-weighted assumptions for the 20082010 grants are as follows: i) the estimated option life is 3.95.1 years, ii) the risk free interest rate was 2.7%2.4% (based on a U.S. Treasury Strip due in a number of years equal to the estimated option life), iii) the expected volatility equals 33.9%37.5%, and iv) the estimated dividend yield is 0%.
(3)Excluding theThe amount disclosed in 2010 for Mr. Schar (seefootnote 1above)Goethe represents the aggregate grant date fair value of two stock option grants made during the year in accordance with FASB ASC Topic 718, disregarding any estimate of forfeitures relating to service-based vesting conditions. The fair value tranche-weighted assumptions for the first 2010 grant are as follows: i) the estimated option life is 4.2 years, ii) the risk free interest rate was 2.0% (based on a U.S. Treasury Strip due in a number of years equal to the estimated option life), iii) the expected volatility equals 39.0%, and iv) the estimated dividend yield is 0%. The fair value tranche-weighted assumptions for the second 2010 grant is as follows: i) the estimated option life is 5.1 years, ii) the risk free interest rate was 2.4% (based on a U.S. Treasury Strip due in a number of years equal to the estimated option life), iii) the expected volatility equals 37.5%, and iv) the estimated dividend yield is 0%.
(4)The amounts disclosed in 2012 for Mssrs. Bredow and Henley represent the aggregate grant date fair value of stock option grants made during the year in accordance with FASB ASC Topic 718, disregarding an estimate of forfeitures relating to service-based vesting conditions. The fair value tranche-weighted assumptions for Mr. Bredow’s June 2012 grant are as follows: i) the estimated option life is 5.0 years, ii) the risk free interest rate was 0.6% (based on U.S. Treasury Strip due in a number of years equal to the estimated option life), iii) the expected volatility equals 31.5%, and iv) the estimated dividend yield is 0%. The fair value tranche-weighted assumptions for Mr. Henley’s October 2012 grant are as follows: i) the estimated option life is 4.7 years, ii) the risk free interest rate was 0.6% (based on U.S. Treasury Strip due in a number of years equal to the estimated option life), iii) the expected volatility equals 27.4%, and iv) the estimated dividend yield is 0%.

34

(5)The “all other compensation” only includes amounts contributed by us on behalf of Mssrs. Saville, Inman, Seremet, Henley, Bredow and HenleyGoethe to our Employee Stock Ownership Plan (“ESOP”), which is a defined contribution plan,ESOP for the respective plan year, and where applicable, a $500 matching contribution made by us pursuant to our 401(K) plan. The amount disclosed in 2012 for Mr. Goethe includes $175,000 payable to Mr. Goethe in February 2013 pursuant to his employment agreement as a termination payment representing 50% of his base salary. The amount disclosed in 2012 for Mr. Goethe also includes $25,000 of outplacement assistance expenses paid pursuant to his employment agreement.
(6)Effective on June 1, 2012, Mr. Henley was promoted from Principal Accounting Officer to the interim acting President of NVR Mortgage Finance, Inc. (“NVRM”). Effective October 1, 2012, Mr. Henley was named as the President of NVRM on a permanent basis.
(7)Mr. Bredow succeeded Mr. Henley as the Principal Accounting Officer effective June 1, 2012. Because Mr. Bredow was not an executive officer prior to June 1, 2012, only 2012 compensation is reported.
(8)On June 1, 2012, Mr. Goethe resigned as President of NVRM effective July 31, 2012.

34

20092012 Grants of Plan-Based Awards
             
      Estimated Future
      Payouts Under Non-Equity
      Incentive Plan Awards ($)
  Grant    
Name Date Target Maximum
Dwight C. Schar (1)  —  $0  $0 
Paul C. Saville (2)  02/24/09  $400,000  $400,000 
William J. Inman (2)  02/24/09  $215,000  $215,000 
Dennis M. Seremet (2)  02/24/09  $237,500  $237,500 
Robert W. Henley (2)  02/24/09  $110,000  $110,000 

       Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards ($)		   All  Other
Stock
Awards:
Number of
Shares of
Stock or
Units(#)		   All Other
Option
Awards:
Number of
Securities
Underlying
Options (#)		   Exercise or
Base Price
of Option
Awards		   Closing
Price on
Date of
Grant		   Grant Date
Fair Value
on Date of
Grant		 

Name

  Grant
Date		   Target   Maximum                     

Paul C. Saville (1)

   02/22/12    $800,000    $800,000     —       —       —       —       —    

Dennis M. Seremet (1)

   02/22/12    $475,000    $475,000     —       —       —       —       —    

Robert W. Henley (1)

   02/22/12    $288,833    $288,833     —       —       —       —       —    

Robert W. Henley (2)

   10/01/12     —       —       —       10,000    $844.50    $843.29    $2,077,800  

Eugene J. Bredow (1)

   02/22/12    $205,740    $205,740     —       —       —       —       —    

Eugene J. Bredow (3)

   06/01/12     —       —       —       8,000    $804.80    $774.00    $1,845,040  

Robert A. Goethe (1)

   02/22/12    $204,167    $204,167     —       —       —       —       —    

(1)
(1)Mr. Schar ceased to be an employee on February 4, 2009 when he relinquished his executive officer title and thus, was not eligible to participant in the 2009 annual bonus plan.
(2)Amounts pertain to our 20092012 annual bonus plan. See theAnnual Cash Bonussection in ourCompensation Discussion and Analysis above and theNarrative Disclosure to Summary Compensation and Grants of Plan-Based Awards Tables below.
(2)These options were granted on October 1, 2012, the effective date of Mr. Henley’s promotion to NVRM President on a permanent basis and consistent with the Compensation Committee’s approval. The exercise price of the options was equal to the market value of the underlying stock on the date of the respective grants. Pursuant to the stock options plans from which these grants were issued, market value is defined as the closing price of the underlying stock on the trading day immediately preceding the date of grant. See theCompensation Discussion and Analysisabove and theNarrative Disclosure to Summary Compensation and Grants of Plan-based Awards Tablesbelow.
(3)These options were granted on June 1, 2012, the effective date of Mr. Bredow’s promotion to Principal Accounting Officer and consistent with the Compensation Committee’s approval. The exercise price of the options was equal to the market value of the underlying stock on the date of the respective grants. Pursuant to the stock options plans from which these grants were issued, market value is defined as the closing price of the underlying stock on the trading day immediately preceding the date of grant. See theCompensation Discussion and Analysis above and theNarrative Disclosure to Summary Compensation and Grants of Plan-based Awards Tablesbelow.

35

Narrative Disclosure to Summary Compensation and Grants of Plan-Based Awards Tables

Employment Agreements

We have entered intoemployed Mssrs. Saville, Seremet, Henley and Bredow pursuant to employment agreements with each of our named executive officers, exceptduring 2012. Mr. Henley (see below for a discussion of Mr. Schar).Goethe was also employed pursuant to an employment agreement up to his resignation effective July 31, 2012. The agreements for Mssrs. Saville, Seremet, Henley and Goethe were entered into on July 1, 2005,January 2, 2011 and continue throughthe agreement for Mr. Bredow was entered into on May 31, 2012. Mr. Henley’s agreement was amended on May 31, 2012 to reflect the change in Mr. Henley’s title and his minimum base salary. The employment agreements expire on January 1, 2011. Each of the named executive officers’ employment agreements were amended effective January 1, 2009 to comply with Section 409A of the Internal Revenue Code relative to deferred compensation. Any of the agreements can be extended if both the executive and NVR mutually agree to extend the term. The full agreements were filed as exhibits 10.2, 10.3, and 10.4 to a Form 8-K filed with the SEC on June 28, 2005. The amendments that conformed the agreements to Section 409A were filed as exhibits 10.38, 10.39 and 10.40 to our 2008 Form 10K filed with the SEC on February 25, 2009. The 2005 Forms 8-K and the 2008 Form 10-K can be found on the SEC’s website at www.sec.gov.

     Subsequent to Mr. Schar’s relinquishment of his executive officer title on February 4, 2009, he is no longer an employee of NVR. Mr. Schar’s voluntarily amended his employment agreement on December 21, 2006, November 6, 2007 and November 6, 2008 to reduce his salary and bonus opportunity to $0 for 2007, 2008 and 2009, respectively. Mr. Schar’s December 21, 2006 amendment was filed as exhibit 10.1 to a Form 8-K filed with the SEC on December 22, 2006, his November 6, 2007 amendment was filed as exhibit 10.1 to a Form 8-K filed with the SEC on November 7, 2007, and his November 6, 2008 amendment was filed as exhibit 10.1 to a form 8-K filed with the SEC on November 10, 2008.
2016 (see further discussion below).

Other than the applicable named executive officers’ titles, minimum base salary amounts and NVR stock holding requirements, the material terms of the employment agreements that were in each agreementeffect during 2012 are essentially the same and cover:

covered:

Minimum base salaries:

•     Mr. Saville

  $800,000  

•     Mr. Seremet

  $475,000  

•     Mr. Henley

  $300,000  

•     Mr. Bredow

  $220,000  

•     Mr. Goethe

  $350,000  

 • Mr. Saville  $650,000
•Mr. Inman  $390,000
•Mr. Seremet  $400,000

35

•

Annual bonus eligibility up to 100% of base salary based on criteria determined by our Compensation Committee (seeCompensation Discussion and Analysis —– Annual Cash Bonusabove);

Eligibility to participate in our benefit plans at identical participation costs offered to all of our employees eligible to participate in those plans;

Eligibility to have reasonable business expenses reimbursed, subject to reimbursement policies to which all of our employees are subject equally;

 • Eligibility to participate in our benefit plans at identical participation costs offered to all of our employees eligible to participate in those plans;
•Eligibility to have reasonable business expenses reimbursed, subject to reimbursement policies to which all of our employees are subject equally;
•

The requirement of a continuous NVR stock holding requirement, as set forth under theStock Ownership Guidelinessection of theCompensation Discussion and Analysisabove;

 • 

Severance payments due under various termination scenarios (seePotential Payments UponNarrative Disclosure of Termination orand Change of Control Paymentsbelow for additional information);

 • 

Covenants for the applicable named executive officers not to compete with us (seePotential Payments UponNarrative Disclosure of Termination orand Change of Control Paymentsbelow for additional information); and

•Extension of our indemnification to the executives during the performance of their duties to the fullest extent permitted by the laws of the Commonwealth of Virginia.

Indemnification to the executives during the performance of their duties to the fullest extent permitted by the laws of the Commonwealth of Virginia.

36

2009, 20082012, 2011 and 20072010 Compensation

     For

Mssrs. Saville and Seremet and Henley, all ofwere paid the cash compensation paid was in the form ofsame base salary during 2008in 2012 that they were paid in 2011 and 2007.2010. Mr. Henley’s annual salary was increased to $300,000 when he was named interim acting President of NVRM on June 1, 2012 and subsequently increased to $350,000 on October 1, 2012 when he was named President of NVRM on a permanent basis. As noted abovePrincipal Accounting Officer, Mr. Henley’s 2012 salary was increased by $8,000 effective April 1, 2012. Mr. Bredow was named Principal Accounting Officer effective June 1, 2012 with an annual salary of $220,000. Mr. Goethe was paid the same base salary in theCompensation Discussion2012 up through his resignation on July 31, 2012 that he was paid in 2011 and Analysis – Base Salarydiscussion, none2010 (Mr. Goethe’s 2010 base salary of the named executive officers received salary increases in 2009$350,000 was prorated from 2008 levels. Mr. Saville has not received a salary increase since the beginning of 2006.

his January 25, 2010 employment commencement date).

For a discussion of the general terms and objectives behind our 20092012 annual cash bonus plan, seeCompensation Discussion and Analysis – Annual Cash Bonusabove. The maximum bonus opportunity available for our named executive officers in 20092012 was reduced to 50%100% of base salary from 100% as a cost savings measure.salary. With respect to the specific performance targets established under the 20092012 annual bonus plan, the consolidated pre-tax profit target at which 100% of the annual bonus was earned was $190,283,000,$336,839,000, and the 80% threshold at which the annual bonus was to be ratably earned was $152,226,000.$269,471,000. Our actual 20092012 consolidated pre-tax profit was $364,820,000,$380,102,000, which was above theresulted in 100% maximum.of this portion being attained. The 20092012 new orders target (net of cancellations) was 7,00010,000 units, with the 85% threshold being 5,9508,500 units. Our actual 20092012 new orders were 9,40910,954 units, resulting in 100% of this portion being attained. As a result, Mssrs. Saville, Inman, Seremet, Henley, Bredow and HenleyGoethe earned 100% of their maximum bonus, calculated as follows: (80% x× 100%) + (20% x× 100%).

Mr. Goethe’s 2012 earned bonus was further reduced by 0.9% based on internal audit results of the operations under his direct management.

In 2008,2011, Mssrs. Saville, Seremet, Henley and HenleyGoethe earned 3.4%5.8% of their maximum bonus opportunity andopportunity. Mr. InmanGoethe’s 2011 earned 63.1%bonus was further reduced by 2.5% based on internal audit results of operations under his maximum bonus opportunity. However,direct management. Mssrs. Saville Inman,and Seremet and Henley recommended to the Compensation Committee that no bonuses be paid to them in 2008 as a cost savings measure,for 2011, which the Committee approved. Mr. Inman earned 23.7% of his 2007 maximum bonus opportunity.

     During 2008,In 2010, Mssrs. Saville, Seremet Inman and Henley earned 60.2% of their maximum bonus opportunity. Mr. Goethe was guaranteed a bonus in 2010 equal to 100% of his paid salary as an inducement to accept employment with us as the President of NVR Mortgage Finance, Inc.

In 2012, Mssrs. Henley and Bredow were granted fixed-priced stock options to purchase 10,000 and 8,000 shares, respectively, related to their promotions. There were no other equity grants issued to the named executive officers in 2012. There were no equity grants issued to any of the named executive officers in 2011. In 2010, Mssrs. Saville, Seremet, Henley and Goethe were granted fixed-price stock options to purchase 25,000, 13,000, 9,00057,344; 24,261; 11,028 and 6,0002,206 shares, respectively, and were also granted 21,046; 8,904; 4,047 and 809 restricted share units, respectively. There were noMr. Goethe was also granted 15,000 fixed-price stock option

36

grants issued in 2009 or 2007options as an inducement to anyjoin NVR as the President of the named executive officers.NVR Mortgage Finance, Inc. For further information see theCompensation Discussion and Analysis – Fixed Price Stock Optionssection and also footnotefootnotes (1), (2), (3) and (4) to the20092012 Summary Compensation Table, and footnotefootnotes (b), (c) and (e) to theOutstanding Equity Awards at December 31, 20092012 Table.

37

OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2009
                 
  Number of Number of    
  Securities Securities    
  Underlying Underlying    
  Unexercised Unexercised Option  
  Options Options Exercise Option
  (#) (#) Price Expiration
Name Exercisable Unexercisable ($) Date
Dwight C. Schar:                
2000 Option Plan (a)  100,000   —  $189.00   05/02/11 
Paul C. Saville:                
2000 Option Plan (a)  120,000   —  $189.00   05/02/11 
2000 Option Plan (b)  —   25,000  $515.05   01/02/18 
William J. Inman:                
2000 Option Plan (a)  12,500   —  $189.00   05/02/11 
2000 Option Plan (b)  —   9,000  $515.05   01/02/18 
Dennis M. Seremet:                
2000 Option Plan (a)  12,500   —  $189.00   05/02/11 
2000 Option Plan (b)  —   13,000  $515.05   01/02/18 
Robert W. Henley:                
2000 Option Plan (a)  1,750   —  $189.00   05/02/11 
2000 Option Plan (b)  —   6,000  $515.05   01/02/18 
2012

Name

  Number  of
Securities
Underlying
Unexercised
Options
(#)
Exercisable		   Number  of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable		   Option
Exercise
Price
($)		   Option
Expiration
Date		 

Paul C. Saville:

        

2000 Option Plan (a)

   25,000     —      $515.05     01/02/18  

2000 Option Plan (b)

   —       57,344    $703.00     05/10/20  

Dennis M. Seremet:

        

2010 Equity Plan (b)

   —       24,261    $703.00     05/10/20  

Robert W. Henley:

        

2000 Option Plan (a)

   6,000     —      $515.05     01/02/18  

2000 Option Plan (b)

   —       11,028    $703.00     05/10/20  

2010 Equity Plan (c)

   —       10,000    $844.50     09/30/22  

Eugene J. Bredow

        

1998 Option Plan (d)

   667     333    $505.37     04/30/19  

2000 Option Plan (a)

   1,275     —      $515.05     01/02/18  

2000 Option Plan (b)

   —       3,970    $703.00     05/10/20  

2010 Equity Plan (e)

   —       8,000    $804.80     05/31/22  

(a)These options were granted on May 3, 2001. The exercise price of the options was equal to the market value of the underlying stock on the date of grant. Twenty-five percent of the options vest on each of December 31, 2006, 2007, 2008 and 2009, with vesting based solely upon continued service in the capacity in which the grants were issued.
(b)These options were granted on January 3, 2008. The exercise price of the options was equal to the market value of the underlying stock on the date of the respective grants. The options vestvested on December 31, 2010, with vesting based solely on continued service in the capacity in which the grants were issued.
* * * * *
2009
(b)These options were granted on May 11, 2010. The exercise price of the options was equal to the market value of the underlying stock on the date of the respective grants. Fifty percent of the options vest on each of December 31, 2013 and 2014, with vesting based solely on continued service in the capacity in which the grants were issued.
(c)These options were granted on October 1, 2012. The exercise price of the options was equal to the market value of the underlying stock on the date of grant. Twenty-five percent of the options vest on each of December 31, 2014, 2015, 2016 and 2017, with vesting based solely on continued service in the capacity in which the grants were issued.
(d)These options were granted on May 1, 2009. The exercise price of the options was equal to the market value of the underlying stock on the date of grant. Thirty-three percent of the options vest on each of December 31, 2011, 2012 and 2013, with vesting based solely on continued service in the capacity in which the grants were issued.
(e)These options were granted on June 1, 2012. The exercise price of the options was equal to the market value of the underlying stock on the date of grant. Twenty-five percent of the options vest on each of December 31, 2014, 2015, 2016 and 2017, with vesting based solely on continued service in the capacity in which the grants were issued.

38

2012 OPTION EXERCISES AND STOCK VESTED

         
  Option Awards
  Number of  
  Shares Value Realized
  Acquired on
  on Exercise
Name Exercise (#) ($) (1)
Dwight C. Schar  100,000  $21,935,880 
Paul C. Saville  40,301  $17,206,378 
William J. Inman  12,500  $4,116,625 
Dennis M. Seremet  12,500  $4,888,142 
Robert W. Henley  3,500  $1,497,458 

   Option Awards   Stock Awards 

Name

  Number  of
Shares
Acquired
on
Exercise (#)		   Value  Realized
on
Exercise
($) (1)		   Number  of
Shares
Acquired on
Vesting (#)		   Value
Realized  on
Vesting
($) (2)		 

Paul C. Saville

   —       —       10,523    $9,681,160  

Dennis M. Seremet

   13,000    $3,644,664     4,452    $4,095,840  

Robert W. Henley

   —       —       2,024    $1,862,080  

Eugene J. Bredow

   1,000    $311,750     729    $670,680  

Robert A. Goethe

   3,750    $317,509     —       —    

(1)The value realized is calculated based on the difference between the market price of NVR common stockCommon Stock on the date of exercise and the respective exercise price, multiplied by the number of options exercised.
(2)The value realized is calculated by multiplying the number of shares vested by the closing price of Common Stock on December 31, 2012. Though vested at December 31, 2012, the shares were not issued to the respective named executive officers until January 28, 2013.

38

*********

20092012 NON-QUALIFIED DEFERRED COMPENSATION TABLE
                     
          Aggregate    
  Executive Registrant Earnings Aggregate Aggregate
  Contributions in Contributions (Loss) in Last Withdrawals/ Balance at Last
  Last FY in Last FY FY Distributions FYE
Name ($) ($) ($) (a) ($)(b) ($)
Dwight C. Schar:                    
Plan 1 (c)  —   —  $(12,945,538) $97,764,894  $0 
Plan 2 (d)  —   —  $740,858  $3,028,194  $0 
                     
Paul C. Saville:                    
Plan 1 (e)  —   —  $26,942,988   —  $75,252,107 
Plan 2 (f)  —   —  $197,651   —  $552,042 
                     
William J. Inman:                    
Plan 1 (g)  —   —  $21,981,273   —  $61,393,973 
                     
Dennis M. Seremet:                    
Plan 1 (h)  —   —  $10,312,500   —  $28,802,944 
                     
Robert W. Henley  —   —   —   —   — 

Name

  Executive
Contributions  in
Last FY
($)		   Registrant
Contributions
in Last FY
($)		   Aggregate
Earnings
(Loss) in Last
FY
($) (a)		   Aggregate
Withdrawals/
Distributions
($)		   Aggregate
Balance at  Last
FYE
($)		 

Paul C. Saville:

          

Plan 1 (b)

   —       —      $24,776,622     —      $97,412,360  

Plan 2 (c)

   —       —      $181,759     —      $714,608  

Dennis M. Seremet:

          

Plan 1 (d)

   —       —      $9,483,318     —      $37,284,840  

Robert W. Henley

   —       —       —       —       —    

Eugene J. Bredow

   —       —       —       —       —    

Robert A. Goethe

   —       —       —       —       —    

(a)Represents unrealized earnings/(losses) of the market value of the NVR common stockCommon Stock held in the respective officer’s deferred compensation account. We have never paid dividends.
(b)Pursuant to Mr. Schar relinquishing his executive officer title on February 4, 2009, during 2009 he received a distribution of all deferred compensation pursuant to the terms of his deferred compensation agreements.
(c)Mr. Schar deferred a total of $30,171,848 of earned compensation, all of which was previously reported by us in prior years’ Summary Compensation Tables within our proxy statements.
(d)Mr. Schar deferred a total of $3,476,520 of earned compensation, all of which was previously reported by us in prior years’ Summary Compensation Tables within our proxy statements.
(e)Mr. Saville deferred a total of $15,995,411 of earned compensation, all of which was previously reported by us in prior years’ Summary Compensation Tables within our proxy statements.
(f)(c)Mr. Saville deferred a total of $600,000 of earned compensation, all of which was previously reported by us in prior years’ Summary Compensation Tables within our proxy statements.
(g)Mr. Inman deferred a total of $12,274,639 of earned compensation, all of which was previously reported by us in prior years’ Summary Compensation Tables within our proxy statements.
(h)(d)Mr. Seremet deferred a total of $7,334,970 of earned compensation, all of which was previously reported by us in prior years’ Summary Compensation Tables within our proxy statements.

39

Narrative to the 20092012 Non-Qualified Deferred Compensation Table

We have two deferred compensation plans, which we refer to as plans 1 and 2, respectively, for purposes of this discussion. Plan 1, which we adopted on December 15, 1999, was closed for new contributions effective December 31, 2004. Each of the named executive officers, solely at their election, may defer 100% of any earned salary or bonus into plan 2, which we adopted December 15, 2005. Stock option gains are prohibited by law from being deferred.

Amounts deferred are invested in a fixed number of shares of our common stock, which is purchased on the open market at fair market value. This is the only investment choice for the named executive officers. All amounts placed in the deferred compensation plan are amounts already due to the named executive officer; we do not make employer contributions to their accounts. Further, earnings on deferred amounts solely represent appreciation/(depreciation) of the market value of the NVR shares of common stock held. We do not provide for a minimum return or guarantee a minimum

39

payout amount. These are “at risk” investments. The shares of our common stock held in each named executive officer’s account are distributed to the named executive officer upon expiration of the deferral period. The deferral period expires for Plan 1 at the named executive officer’s termination of employment, and expires for Plan 2 six months after the named executive officer’s termination of employment.

NARRATIVE DISCLOSURES OF TERMINATION AND CHANGE OF CONTROL PAYMENTS

Our named executive officers are eligible to receive certain termination and/or change in control payments and acceleration rights under certain of the compensation arrangements that they hold with us. Theseus.These payments and acceleration rights are contained within the executive officers’ employment agreements, employee stock option agreements and deferred compensation plan agreements.

Employment Agreements

As noted in theNarrative Disclosure to the Summary Compensation Tableand Grants of Plan-Based Awards Tables, we employas of December 31, 2012, Mssrs. Saville, InmanSeremet, Henley and SeremetBredow were employed pursuant to employment agreements (Mr. Schar was employed under an employment agreement prior to February 4, 2009, the date upon which he relinquished his executive officer title, and Mr. Henley does not have an employment agreement with us).agreements. The agreements cover the additional payments that would be due to these individuals in the following termination scenarios: 1) death, 2) disability, 3) retirement, 4) cause, 5) without cause, 6) voluntary, 7) voluntary within one year after a change in control, and 8) voluntary upon the election or appointment of a new Chairman and/or CEO accompanied by a change in business philosophy. The terms are identical

While Mr. Seremet is included in each of the agreements.

     As noted above,tables below, Mr. Seremet retired from NVR effective February 4, 2009,19, 2013. As a result, Mr. Schar relinquished his executive officer title, and thus wasSeremet will be paid a retirement separation benefit equal to one times his annual salary, which equaled $1,500,000 (seeis $475,000. In addition, Mr. Seremet will be eligible for a pro rata portion of his 2013 annual bonus to the2009 Summary Compensation Table). Mr. Schar is not entitled to any further separation benefits under his former employment agreement in his role as Chairman of extent the Board as of December 31, 2009. Severanceperformance targets are achieved.

Summarized below are the severance payments due under the various terminationstermination scenarios pursuant to their respectivethe employment agreements for Mssrs. Saville, Inman and Seremet are summarized below.

agreements.

40

Termination Events

• 

Death or Disability. The applicable named executive officer is entitled to receive in a lump sum two months of his then annual base salary and accrued pro-rated annual bonus, assuming that the maximum of 100% of base salary is earned for the period ending on the last calendar day of the second calendar month following the month in which the death or disability occurred. Assuming a December 31, 20092012 termination event for death or disability, payments would be as follows:

             
Name Salary Due Bonus Due Total Due
Paul C. Saville $133,333  $133,333  $266,666 
William J. Inman $71,667  $71,667  $143,333 
Dennis M. Seremet $79,167  $79,167  $158,333 

40

Name

  Total Due 

Paul C. Saville

  $266,667  

Dennis M. Seremet

  $158,333  

Robert W. Henley

  $116,667  

Eugene J. Bredow

  $73,333  

• 

Retirement.Upon retirement, the applicable named executive officer is entitled to receive, in 12 monthly installments beginninga lump sum following six months from the date of termination,retirement, an amount equal to either 100% or 50% of his then annual base salary, as applicable, and any accrued pro-rated annual bonus, assumingto the extent that the maximum of 100% of base salary is earnedperformance targets have been achieved and the annual bonus being paid at the same time that all of our other employees are paid their annual bonus. Assuming a December 31, 20092012 termination event in connection with retirement, payments would be as follows:

             
Name Salary Due Bonus Due Total Due
Paul C. Saville $800,000  $800,000  $1,600,000 
William J. Inman $430,000  $430,000  $860,000 
Dennis M. Seremet $475,000  $475,000  $950,000 

Name

  Total Due 

Paul C. Saville

  $800,000  

Dennis M. Seremet

  $475,000  

Robert W. Henley

  $175,000  

Eugene J. Bredow

  $110,000  

• 

Cause.The applicable named executive officers are not entitled to receive any payments after the date of termination for cause. Termination for “cause” is a termination due to:

the officer being convicted of any felony, other crime involving moral turpitude, or any crime or offense which results in his incarceration for more than three months;

•the officer being convicted of any felony, other crime involving moral turpitude, or any crime or offense which results in his incarceration for more than three months;
•gross misconduct in connection with the performance of his duties as described within the employment agreement; or
•the officer materially breaching affirmative or negative covenants or undertakings described in the employment agreement, such as the agreement’s non-compete provisions.

gross misconduct in connection with the performance of his duties as described within the employment agreement; or

the officer materially breaching affirmative or negative covenants or undertakings described in the employment agreement, such as the agreement’s non-compete provisions.

• 

Without cause.The applicable named executive officer is entitled to receive, in 12 monthly installments beginninga lump sum following six months from the date of termination, an amount equal to 200% or 50% of his then annual base salary.salary, as applicable, and any accrued pro-rated annual bonus, to the extent that performance targets have been achieved and the annual bonus being paid at the same time that all of our other employees are paid their annual bonus. In addition, we would provide the executive with up to $60,000$100,000 of outplacement services.services in the case of Mssrs. Saville and Seremet, and up to $50,000 in the case of Mssrs. Henley and Bredow. In connection with the termination of Mr. Goethe’s employment effective July 31, 2012, $401,837 was payable to him for his termination payment, accrued pro-rated annual bonus earned and outplacement assistance pursuant to his employment agreement. Assuming a December 31, 20092012 termination event without cause, payments would be as follows:

             
  Salary Outplacement Total
Name Due Due Due
Paul C. Saville $1,600,000  $60,000  $1,660,000 
William J. Inman $860,000  $60,000  $920,000 
Dennis M. Seremet $950,000  $60,000  $1,010,000 

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Name

  Total Due 

Paul C. Saville

  $1,700,000  

Dennis M. Seremet

  $1,050,000  

Robert W. Henley

  $225,000  

Eugene J. Bredow

  $160,000  

• 

Voluntary. The applicable named executive officer is not entitled to receive any payments after the date of termination.

• 

Voluntary within one year after a change in control.The applicable named executive officer is entitled to receive, in 12 monthly installments beginninga lump sum following six months from the date of termination, an amount equal to 200% or 50% of his then annual base salary, as applicable, and accrued pro-rated annual bonus under the assumptionassuming that 100% of the target bonus would have been paid for that year. A change of control means i) any person or group acquires 20%50% or more of the combined voting power of our voting stock, ii) substantially all of our assets are sold to another party, iii) we are liquidated or dissolved, or adopt a plan to do so, or iv) we are merged into another entity or we are taken private, and the executive officer experiences a significant reduction in responsibilities. Assuming a December 31, 20092012 termination event in connection with a change in control, payments would be as follows:

41

Name

  Total Due 

Paul C. Saville

  $2,400,000  

Dennis M. Seremet

  $1,425,000  

Robert W. Henley

  $525,000  

Eugene J. Bredow

  $330,000  

             
Name Salary Due Bonus Due Total Due
Paul C. Saville $1,600,000  $800,000  $2,400,000 
William J. Inman $860,000  $430,000  $1,290,000 
Dennis M. Seremet $950,000  $475,000  $1,425,000 
• 

Voluntary termination upon the election or appointment, as applicable, of a new Chairman and/or Chief Executive Officer.The applicable named executive officer is not entitled to receive any payments after the date of termination.

The employment agreements with Mssrs. Bredow and Henley were amended on February 19, 2013 by the Committee to increase the payments due them upon retirement, termination without cause or voluntary termination within one year after a change in control from 50% of annual base salary to 100% of annual base salary. In addition, the payment for outplacement services was also changed from $50,000 to $100,000. These changes were made to make the provisions in the employment agreements for Mssrs. Bredow and Henley more consistent with the provisions in Mr. Saville’s employment agreement.

Conditions to Receipt of Payment

The covenants within the employment agreements include non-compete provisions, including the prohibition from:

engaging, on the individual’s or another entity’s behalf in the homebuilding or mortgage businesses as an employee, greater than 1% owner, manager or otherwise;

•engaging, on the individual’s or another entity’s behalf in the homebuilding or mortgage businesses as an employee, greater than 1% owner, manager or otherwise;
•inducing or attempting to induce any customers or potential customers from conducting business with us;
•hiring or attempting to hire our employees; or
•utilizing the services of or trying to acquire land, goods or services from, any of our developers or subcontractors.

inducing or attempting to induce any customers or potential customers from conducting business with us;

hiring or attempting to hire our employees; or

utilizing the services of or trying to acquire land, goods or services from any of our developers or subcontractors.

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The periods that the non-compete provisions cover are as follows:

During their term of employment with us, the named executive officers are bound by the non-compete covenants at all times.

•During their term of employment with us, the named executive officers are bound by the non-compete covenants at all times.
•For two years after termination, the named executive officer is bound by the non-compete covenants if the termination was voluntary, due to retirement, for cause, or without cause.
•The named executive officer is not bound by the non-compete covenants after their termination date if the termination was voluntary within one year after a change in control, or voluntary upon the election or appointment, as applicable, of a new Chairman and/or Chief Executive Officer.

For one year after termination, the named executive officer is bound by the non-compete covenants if the termination was voluntary, due to retirement, for cause, or without cause.

The named executive officer is not bound by the non-compete covenants after their termination date if the termination was voluntary within one year after a change in control, or voluntary upon the election or appointment, as applicable, of a new Chairman and/or Chief Executive Officer.

Stock Option and Restricted Share Unit Agreements

Each option agreement provides for the acceleration of vesting of all unvested options if we experience a “change in control” (as defined below). SeeCompensation Discussion and Analysis — Fixed Price Stock Optionsabove. The accelerated vesting is based on a single trigger, meaning that the named executive officer does not need to terminate employment to receive the acceleration right. The “change of control” provisions within the named executive officers’ agreements are identical to the “change of control” provisions within the agreements for all other participants of the respective stock option plans. Generally, the “change of control” provision is triggered upon:

•our merger, consolidation, reorganization or other business combination with one or more other entities in which we are not the surviving entity;
•our selling substantially all of our assets to another entity; or
•our experiencing any transaction resulting in any person or entity owning 20% or more of the total number of our voting shares, or any person commencing a tender or exchange offer to acquire beneficial ownership of 20% or more of the total number of our voting shares.

our merger, consolidation, reorganization or other business combination with one or more other entities in which we are not the surviving entity;

42

our selling substantially all of our assets to another entity; or

our experiencing any transaction resulting in any person or entity owning 50% or more of the total number of our voting shares.

Assuming we experienced a change of control on December 31, 2009,2012, the market value realized on the accelerated stock options for each of the named executive officers would be as follows:
                     
          Market Price    
          of NVR    
  Number of Option Common Per Share Market Value
  Options Exercise Stock at Intrinsic Value Realized on
  Accelerated Price 12/31/09 at 12/31/09 Acceleration
Name (#) ($) ($) ($) ($)
Dwight C. Schar  —   —   —   —   — 
Paul C. Saville:                    
2000 Option Plan  25,000  $515.05  $710.71  $195.66  $4,891,500 
William J. Inman:                    
2000 Option Plan  9,000  $515.05  $710.71  $195.66  $1,760,940 
Dennis M. Seremet:                    
2000 Option Plan  13,000  $515.05  $710.71  $195.66  $2,543,580 
Robert W. Henley:
                    
2000 Option Plan  6,000  $515.05  $710.71  $195.66  $1,173,960 

Name

  Number  of
Stock
Awards
Accelerated
(#)		   Number  of
Options
Accelerated
(#)		   Option
Exercise
Price
($)		   Market Price
of NVR
Common
Stock at
12/31/12
($)		   Per Share
Intrinsic  Value
at 12/31/12
($)		   Market Value
Realized on
Acceleration
($)		 

Paul C. Saville:

            

2000 Option Plan

   —       57,344    $703.00    $920.00    $217.00    $12,443,648  
            

 

 

 
            $12,443,648  

Dennis M. Seremet:

            

2010 Equity Plan

   —       24,261    $703.00    $920.00    $217.00    $5,264,637  
            

 

 

 
            $5,264,637  

Robert W. Henley:

            

2000 Option Plan

   —       11,028    $703.00    $920.00    $217.00    $2,393,076  

2010 Equity Plan

   —       10,000    $844.50    $920.00    $75.50     755,000  
            

 

 

 
            $3,148,076  

Eugene J. Bredow:

            

1998 Option Plan

   —       333    $505.37    $920.00    $414.63    $138,072  

2000 Option Plan

   —       3,970    $703.00    $920.00    $217.00     861,490  

2010 Equity Plan

   —       8,000    $804.80    $920.00    $115.20     921,600  
            

 

 

 
            $1,921,162  

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Deferred Compensation Plans

Under the deferred compensation plans (see the2012 Non-Qualified Deferred Compensation Tableabove for more information on these plans), each named executive officer receives a lump sum distribution immediately if we experience a “change of control”, rather than receiving their account balance at separation of service. The “change of control” provisions within the deferred compensation plans are equally applicable to all participants within the plans.

• 

Plan 1.Generally, the “change of control” provision is the same as the “change in control” provision set forth in our stock option agreements, as summarized above.

• 

Plan 2.Generally, the “change of control” provision is triggered if (i) we experience any transaction resulting in any person or entity owning 50% or more of the total fair market value or total voting power of our shares, (ii) we experience any transaction resulting in any person or entity acquiring 35% or more of the total fair market value or total voting power of our shares during a 12-month period, (iii) a majority of our board of directors is replaced during any 12-month period by new directors not endorsed by a majority of our board of directors who were on our board immediately preceding the new appointments or elections, or (iv) we sell to another entity our assets that have a total gross fair market value equal to or more than 40% of the total gross fair market value of our total assets.

Assuming a change of control under the deferred compensation plans at December 31, 2009,2012, the market value of the accelerated account balances is presented in the2012 Non-Qualified Deferred Compensation Plans Tableabove.

43

********

20092012 DIRECTOR COMPENSATION TABLE
             
  Fees Earned or       
  Paid in Cash  Option Awards  Total 
Name ($)(3)  ($) (4) (5)  ($) 
Dwight C. Schar(1)
  —   —   — 
C. E. Andrews $53,200   —  $53,200 
C. Scott Bartlett, Jr.(2)
 $27,400   —  $27,400 
Robert C. Butler $56,400   —  $56,400 
Timothy M. Donahue $48,400   —  $48,400 
Alfred E. Festa $54,800   —  $54,800 
Manuel H. Johnson $64,800   —  $64,800 
William A. Moran $38,800   —  $38,800 
David A. Preiser $50,000   —  $50,000 
W. Grady Rosier $48,400   —  $48,400 
John M. Toups $48,400   —  $48,400 
Paul W. Whetsell $46,800   —  $46,800 

Name

  Fees Earned or
Paid in Cash
($)(1)		   Stock Awards
($) (2)		   Option Awards
($) (3)		   Total
($)		 

Dwight C. Schar

  $37,200     —       —      $37,200  

C. E. Andrews

  $53,200     —       —      $53,200  

Robert C. Butler

  $58,000     —       —      $58,000  

Timothy M. Donahue

  $51,600     —       —      $51,600  

Thomas D. Eckert

  $46,800     —       —      $46,800  

Alfred E. Festa

  $53,200     —       —      $53,200  

Manuel H. Johnson

  $68,000     —       —      $68,000  

Mel Martinez

  $3,767    $455,319    $455,355    $914,441  

William A. Moran

  $37,200     —       —      $37,200  

David A. Preiser

  $51,600     —       —      $51,600  

W. Grady Rosier

  $51,600     —       —      $51,600  

John M. Toups

  $51,600     —       —      $51,600  

Paul W. Whetsell

  $51,600     —       —      $51,600  

(1)
(1)Effective February 4, 2009, Mr. Schar relinquished his executive officer title but continues to serve as the Chairman of the Board, and will be paid the same fees as our other non-management directors. The director fees that he earned in 2009 are included above in the2009 Summary Compensation Table.
(2)Mr. Bartlett’s term as a director expired at the May 2009 Annual Meeting and he did not stand for re-election.
(3)All non-employee Board members are paid a $26,000 annual retainer. Mr. Johnson, the Audit Committee Chairman, is paid an additional annual retainer of $10,000 for serving in that capacity. Non-employee Board members are paid fees of $1,600 for each Board and Committee meeting attended during 2009.attended. Mr. Martinez was appointed to the Board on December 1, 2012, and thus earned one-twelfth of the annual retainer plus applicable meeting fees for December 2012. Reasonable incidental travel and out-of-pocket business expenses are reimbursed as incurred in accordance with the policies to which all of our executive officers and employees are subject.

44

(2)The amounts disclosed represent the aggregate grant date fair value of restricted share unit grants made to Mr. Martinez upon his appointment to the Board on December 1, 2012 in accordance with FASB ASC Topic 718, disregarding any estimate of forfeitures relating to service-based vesting conditions. The fair value valuation for restricted share units is equal to the market value per share of NVR stock on the date of grant, which was $899.84 per share.
(4)(3)The amounts disclosed represent the aggregate grant date fair value of stock option grants made to Mr. Martinez upon his appointment to the Board on December 1, 2012 in accordance with FASB ASC Topic 718, disregarding any estimate of forfeitures relating to service-based vesting conditions. The fair value tranche-weighted assumptions for the grant is as follows: i) the estimated option life is 5.5 years, ii) the risk free interest rate was 0.8% (based on a U.S. Treasury Strip due in a number of years equal to the estimated option life), iii) the expected volatility equals 31.2%, and iv) the estimated dividend yield is 0%.

Narrative Disclosure to Director Compensation Table

The cash paid to our directors in the form of the $26,000 annual retainer and the $1,600 per meeting fee has not changed since 2000, other than increasing the Audit Committee Chairman’s annual retainer to $36,000, which occurred in 2003. When the last benchmarking analysis was prepared for our Board by Aon Hewitt in 2010, the average annual cash compensation paid to our Board was only slightly above the 25th percentile of director cash compensation when compared to a survey of director compensation for companies with revenue between $2.5 billion and $5.0 billion.

In 2010, upon the recommendation of the Compensation Committee, the Board adopted a Board compensation structure under which cash compensation levels were maintained and the annual long-term incentive plan (“LTIP”) component was increased. The LTIP component mirrors the LTIP approved for management, including the named executive officers, whereby 50% of any award value is payable in time-vested restricted share units, and the other 50% is payable in time-vested stock options. Upon being appointed to the Board on December 1, 2012, Mr. Martinez’s compensation package followed that structure. The grant date fair value of Mr. Martinez’s equity awards was consistent with the value of the awards issued to our existing Board members in 2010 and 2011.

The following table sets forth the outstanding stock option and restricted share unit awards for our directors at December 31, 2012:

45

Name

  Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable		   Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable		   Option
Exercise
Price
($)		   Option
Expiration
Date		   Number of
Shares or  Units
of Stock That
Have Not Vested		   Market Value of
Shares of Stock
That Have
Not Vested		 

Dwight C. Schar

            

2000 Option Plan(a)

   —       28,672    $703.00     05/10/20     —       —    

C. E. Andrews:

            

1998 Option Plan(b)

   1,047     —      $637.10     05/05/18     —       —    

2010 Equity Plan(a)

   —       1,764    $703.00     05/10/20     —       —    

Robert C. Butler:

            

1998 Option Plan(c)

   434     —      $515.05     01/02/18     —       —    

2010 Equity Plan(a)

   —       1,764    $703.00     05/10/20     —       —    

Timothy M. Donahue:

            

1998 Option Plan(c)

   1,302     —      $515.05     01/02/18     —       —    

2010 Equity Plan(a)

   —       1,764    $703.00     05/10/20     —       —    

Thomas D. Eckert:

            

2010 Equity Plan(d)

   —       2,035    $669.85     11/30/21     —       —    

2010 Equity Plan(e)

   —       —       —       —       680    $625,600  

Alfred E. Festa:

            

1998 Option Plan(f)

   1,592     —      $434.25     11/30/18     —       —    

2010 Equity Plan(a)

   —       1,764    $703.00     05/10/20     —       —    

Manuel H. Johnson:

            

1998 Option Plan(c)

   1,302     —      $515.05     01/02/18     —       —    

2010 Equity Plan(a)

   —       1,764    $703.00     05/10/20     —       —    

Mel Martinez

            

2010 Equity Plan(g)

   —       1,688    $899.84     11/30/22     —       —    

2010 Equity Plan(h)

   —       —       —       —       506    $465,520  

William A. Moran:

            

1998 Option Plan(c)

   434     —      $515.05     01/02/18     —       —    

2010 Equity Plan(a)

   —       1,764    $703.00     05/10/20     —       —    

David A. Preiser:

            

1998 Option Plan(c)

   1,302     —      $515.05     01/02/18     —       —    

2010 Equity Plan(a)

   —       1,764    $703.00     05/10/20     —       —    

W. Grady Rosier:

            

1998 Option Plan(f)

   531     —      $434.25     11/30/18     —       —    

2010 Equity Plan(a)

   —       1,764    $703.00     05/10/20     —       —    

John M. Toups:

            

1998 Option Plan(c)

   1,302     —      $515.05     01/02/18     —       —    

2010 Equity Plan(a)

   —       1,764    $703.00     05/10/20     —       —    

Paul W. Whetsell:

            

1998 Option Plan(c)

   1,302     —      $515.05     01/02/18     —       —    

2010 Equity Plan(a)

   —       1,764    $703.00     05/10/20     —       —    

(a)NoneThese options were granted on May 11, 2010. The exercise price of the directors received a grantoptions was equal to the market value of the underlying stock on the date of grant. The options during 2009.
(5)The following table sets forth the outstanding stock option awards for our directors atvest in fifty percent increments on each of December 31, 2009, excluding Mr. Schar’s outstanding grant awards which are disclosed in the aboveOutstanding Equity Awards at December 31, 2009 Tablefor the named executive officers:2013 and 2014, with vesting based solely upon continued services being provided as a director.

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  Number of         
  Securities  Number of      
  Underlying  Securities      
  Unexercised  Underlying  Option   
  Options  Unexercised  Exercise  Option
  (#)  Options  Price  Expiration
Name Exercisable  (#) Unexercisable  ($)  Date
C. E. Andrews:              
1998 Option Plan(a)
  —   1,047  $637.10  05/05/18
Robert C. Butler:              
1998 Option Plan(b)
  12,000   —  $369.75  04/30/12
1998 Option Plan(c)
  —   1,302  $515.05  01/02/18
Timothy M. Donahue:              
1998 Option Plan(c)
  —   1,302  $515.05  01/02/18
Alfred E. Festa:              
1998 Option Plan(d)
  —   1,592  $434.25  11/30/18
Manuel H. Johnson:              
2000 Option Plan(e)
  17,000   —  $189.00  05/02/11
1998 Option Plan(c)
  —   1,302  $515.05  01/02/18
William A. Moran:              
2000 Option Plan(e)
  4,250   —  $189.00  05/02/11
1998 Option Plan(c)
  —   1,302  $515.05  01/02/18
David A. Preiser:              
2000 Option Plan(e)
  8,000   —  $189.00  05/02/11
1998 Option Plan(c)
  —   1,302  $515.05  01/02/18
W. Grady Rosier:              
1998 Option Plan(d)
  —   1,592  $434.25  11/30/18
John M. Toups:              
2000 Option Plan(e)
  17,000   —  $189.00  05/02/11
1998 Option Plan(c)
  —   1,302  $515.05  01/02/18
Paul W. Whetsell:              
1998 Option Plan(c)
  —   1,302  $515.05  01/02/18
(a)(b)The options were granted on May 6, 2008. The exercise price of the options was equal to the market value of the underlying stock on the date of grant. Mr. Andrews received a grant of 1,047 options, which vestsvested in one-third increments on each of December 31, 2010, 2011 and 2012, with vesting based solely upon continued services being provided as a director.
(b)The options were granted on May 1, 2002. The exercise price of the options was equal to the market value of the underlying stock on the date of grant. Mr. Butler received a grant of 17,000 options, which vest in 25% increments on each of December 31, 2006, 2007, 2008 and 2009, with vesting based solely upon continued services being provided as a director on the vesting dates.
(c)The options were granted on January 3, 2008. The exercise price of the options was equal to the market value of the underlying stock on the date of grant. The applicable director received a grant of 1,302 options, which vestsvested in one-third increments on each of December 31, 2010, 2011 and 2012, with vesting based solely upon continued services being provided as a director.
(d)

The options were granted on December 1, 2011. The exercise price of the options was equal to the market value of the underlying stock on the date of grant. Mr. Eckert received a grant of 2,035 options, which vests in fifty-

46

 percent increments on each of December 31, 2015 and 2016, with vesting based solely upon continued services being provided as a director.
(d)(e)These restricted share units were granted on December 1, 2011. They vest in fifty percent increments on each of December 31, 2013 and 2014, with vesting based solely upon continued services being provided as a director.
(f)The options were granted on December 1, 2008. The exercise price of the options was equal to the market value of the underlying stock on the date of grant. The applicable director received a grant of 1,592 options, which vestsvested in one-third increments on each of December 31, 2010, 2011 and 2012, with vesting based solely upon continued services being provided as a director.
(e)(g)TheThese options were granted on May 3, 2001.December 1, 2012. The exercise price of the options was equal to the market value of the underlying stock on the date of grant. The applicable directorMr. Martinez received a grant of 17,0001,688 options, which vestvests in 25%fifty-percent increments on each of December 31, 2006, 2007, 20082016 and 2009,2017, with vesting based solely based upon continued services being provided as a directordirector.
(h)These restricted share units were granted on theDecember 1, 2012. They vest in fifty percent increments on each of December 31, 2014 and 2015, with vesting dates.based solely upon continued services being provided as a director.

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Stock Holding Requirements

To linkfurther align the interests of our Board of Directors with our shareholders, we adopted stock ownership guidelines for directors in 2000. These guidelines require the members of our Board of Directors to acquire and continuously hold a specified minimum level of our shares for so long as they serve as directors. Under our holding requirements, Board members must acquire and hold shares with a total fair market value equal to five times the annual boardBoard retainer fee, which is $130,000 for all of the Board members, with the exception of Mr. Johnson whose holding requirement is $180,000 due to his higher annual board retainer. Board members must satisfy the holding requirement within three years of first becoming subject to the holding requirements, and at a minimum, have satisfied one-third of the requirement after one year, and two-thirds of the requirement after two years. All members of our Board of Directors are in compliance with our stock ownership guidelines.

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47

APPROVALOF INDEPENDENT AUDITORS

Approval of Independent Auditors
(Proposal 2)

At the Annual Meeting, our Board of Directors will recommend shareholder ratification of the appointment of KPMG LLP as our independent auditor for the year 2010.2013. KPMG LLP served as our independent auditor for the year 2009.2012. If the appointment is not ratified, the Board will consider whether it should select another independent auditor. Representatives of KPMG LLP are expected to be present at the meeting to respond to shareholders’ questions and will have an opportunity to make a statement if they so desire.

Required Vote

The number of votes cast for the proposal must exceed the number of votes cast against the proposal for approval of the proposal.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING“FOR” THE APPROVAL OF KPMG LLP
AS NVR’S INDEPENDENT AUDITORSAUDITOR FOR 2010.2013.

DISCLOSURE OF FEES PAID OR INCURRED FOR KPMG LLP DURING THE YEARS ENDED DECEMBER 31:

         
  2009  2008 
Audit fees:        
Integrated audit of financial statements, Internal controls over financial reporting and quarterly reviews $570,000  $621,397 
Comfort letters and consent  —   56,000 
SEC comment letter  2,600   — 
Adoption of SFAS No. 167  15,000   — 
Reimbursable expenses  3,150   6,704 
       
Total audit fees  590,750   684,101 
         
Audit-related fees:        
Employee benefit plan audit  37,653   37,653 
Tax fees  —   — 
All other fees  —   15,560 
       
         
Total fees $628,403  $737,314 
       

   2012   2011 

Audit fees:

    

Integrated audit of financial statements, internal controls over financial reporting and quarterly reviews

  $650,100    $605,000  

Comfort letters and consents

   50,000     —    

Reimbursable expenses

   1,500     5,150  
  

 

 

   

 

 

 

Total audit fees

   701,600     610,150  

Audit-related fees:

    

Employee benefit plan audit

   40,000     40,000  

Tax fees

   —       —    

All other fees

   —       —    
  

 

 

   

 

 

 

Total fees

  $741,600    $650,150  
  

 

 

   

 

 

 

The Audit Committee annually evaluates what types of audit and non-audit services (permitted by law) that, subject to certain limits, can be entered into with pre-approval authority granted by the Audit Committee and will grant that authority, if applicable, pursuant to an Audit Committee resolution. For the years 20092012 and 2008,2011, under separate authorizations applicable to each respective year, the Audit Committee delegated to our Chairman of the Audit Committee (the “Chairman”), CEO and CFO, together or separately, in our name and on our behalf, the authority, subject to individual cost limits, to engage KPMG LLP to perform 1) accounting guidance and technical assistance for the implementation of newly issued accounting pronouncements and standards, 2) accounting guidance and technical assistance related to the application of existing accounting pronouncements and standards to our transactions, and 3) SEC registration statement comfort letters and consents, together in an aggregate amount for all services not to exceed 50% of the

47

annual audit fee, provided that the Chairman, the CEO and CFO reported any such audit-related or non-audit services to the full Audit Committee at its next regularly scheduled meeting. During 2012, $50,000 of fees related to a comfort letter and consent were paid pursuant to the delegated authority granted by the Audit Committee. All fees incurred during 2009 and 20082011 were approved directly by our Audit Committee.

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ADVISORY VOTE ON EXECUTIVE COMPENSATION

(Proposal 3)

Pursuant to the requirements of the Wall Street Reform and Consumer Protection Act, we are providing our shareholders an opportunity to indicate whether they support our named executive officer compensation as described in this proxy statement. This advisory vote, commonly referred to as “say on pay,” is not intended to address any specific item of compensation, but instead relates to the compensation paid to the named executive officers as disclosed in this proxy statement, including the Compensation Discussion and Analysis, the tabular disclosures regarding named executive officer compensation, and the narrative disclosure accompanying the tabular presentations. These disclosures allow you to view the trends in our executive compensation program and the application of our compensation philosophies for the years presented. We are currently holding “say on pay” advisory votes on an annual basis. The 2008next shareholder advisory vote will be held at the Annual Shareholders Meeting in May 2014.

We actively monitor our executive compensation practices in light of the industries in which we operate and the marketplace for talent in which we compete. We are focused on compensating our executive officers fairly and in a manner that incentivizes high levels of performance while providing us the tools to attract and retain the best talent. As discussed in the Compensation Discussion and Analysis included in this proxy statement, we believe that our executive compensation program properly links executive compensation to our performance and aligns the interests of our executive officers with those of our shareholders. For example:

We pay cash compensation to our named executive officers in amounts that we believe to be lower than cash compensation paid to comparable positions in other publicly traded companies within our industry.

We cap the annual cash bonus opportunity of our named executive officers at 100% of their base salary, and have not provided any opportunity to exceed that amount for “all other fees” relates to costs incurred for certain litigation support.

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MANAGEMENT PROPOSAL TO AMEND THE ARTICLES OF
INCORPORATION AND BYLAWS TO DECLASSIFY THE BOARD OF
DIRECTORS AND ESTABLISH ANNUAL ELECTIONS
(Proposal 3)
General Information
     The Board of Directors,short-term quarterly or annual performance in its continuing review of corporate governance matters, and after careful consideration and upon recommendation by Management, has adopted and now recommends shareholder approval of a proposal to amend Article 7, paragraph (a)excess of our Restated Articlesbusiness plan.

We place a substantial portion of Incorporation,total direct compensation to our executive officers at risk in the form of stock-based awards that vest over a long-term period.

Our named executive officers must achieve and maintain a designated level of ownership in NVR stock.

Accordingly, the Board unanimously recommends that shareholders vote in favor of the following resolution:

“Resolved, that the compensation paid to NVR’s named executive officers as amended (the “Articles”)disclosed in this proxy statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Section 3, paragraphs 3.02Analysis, the compensation tables and 3.04, of our Bylaws, to eliminate the classificationrelated footnotes and narrative disclosures, is hereby APPROVED.”

Although this vote is advisory and is not binding on NVR, the Compensation Committee of the Board of Directors. The Articles and Bylaws currently provide thatwill take into account the Board of Directors shall be divided into three classes, with the directors in each class standing for election at every third annual meeting of shareholders. The Board of Directors has determined that those provisions should be amended to provide instead for the annual election of all directors. The Board has unanimously adopted a resolution approving a declassification amendment to the Articles and Bylaws, which will provide for the annual election of all directors, and is recommending that our shareholders approve that amendment.

     If the proposed amendments are approved, all directors would be elected to one-year terms commencing at the 2011 Annual Meeting. In order to facilitate the transition from classified three-year terms to non-classified one-year terms, each director whose term would not otherwise expire at the 2011 Annual Meeting has agreed to tender his or her resignation effective immediately prior to the 2011 Annual Meeting. The Board has set the current number of directors at 11, which the Proposal would not change. The Board will, however, retain the authority to change that number and to appoint directors to fill any Board vacancies, including any that result from an increase in the sizeoutcome of the Board.
Required Vote
     The affirmative vote ofwhen considering future executive compensation decisions. For the holders of a majority of the outstanding shares of common stock is required for approval of the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE“FOR” THE PROPOSAL TO
AMEND THE RESTATED ARTICLES OF INCORPORATION AND BYLAWS TO PROVIDE
FOR THE ANNUAL ELECTION OF ALL DIRECTORS.
Background of Proposal
     Classified boards have been widely adopted and have a long history in corporate law. Proponents of classified boards believe that they provide continuity and stability to the board, facilitate a long-term outlook by the board and enhance the independence of non-employee directors. On the other hand, an increasing number of investors have come to believe that classified boards reduce accountability of directors because they limit the ability of shareholders to evaluate and elect all directors on an annual basis.
     The Board is committed to sound corporate governance principles and practices. Accordingly, the Board has on several occasions considered the advantages and disadvantages of

49

maintaining a classified Board, and in the past has concluded that it was in the best interests of NVR and its shareholders to maintain a classified Board. This year, upon the recommendation of Management, the Board again considered the various positions for and against a classified Board, particularly in light of evolving corporate governance practices and investor sentiment. The Board believes that the election of directors is a primary means for shareholders to influence corporate governance policies and hold management accountable for implementing those policies. The Board recognizes that annual elections are in line with current best practices in the area of corporate governance, as it provides shareholders the opportunity to register their views on the performance of the entire Board each year. Based upon our reconsideration, the Board has determined that adopting aadvisory resolution approving amendments to the Articles and Bylaws, which will provide for the annual election of all directors, is in the best interests of NVR and its shareholders at this time.
Amendment to Restated Articles of Incorporation and Bylaws
     If the amendment to Article 7, paragraph (a) of the Articles is adopted pursuant to this Proposal, that section would read as follows:
     The number of directors of the Corporation shall be no less than seven and no more than thirteen, as determined from time to time by the Board of Directors by resolution. Beginning with the annual meeting of shareholders to be held in 2011, each director shall hold office for a term expiring atapproved, the next annual meeting of shareholders following such director’s election and until such director’s successor is elected and qualified.Any reduction of the authorized number of directors will not have the effect of removing any director prior to the expiration of such director’s term. The existence of a vacancy on the board of directors shall not affect the validity of any action taken by the board of directors during the pendency of such vacancy.
     Appendix B shows the changes to the relevant portions of Article 7, paragraph (a) of the Articles resulting from the proposed amendment, with deletions indicated by strike-outs and additions indicated by underlining. If approved, this amendment to the Articles will become effective upon the filing of a Certificate of Amendment to the Articles with the Secretary of State of the State of Virginia. We intend to make such a filing promptly if approval of the Proposal is obtained at the 2010 Annual Meeting.
     If the amendment to Section 3, paragraphs 3.02 and 3.04, of our Bylaws is adopted pursuant to this Proposal, those sections would read as follows:
3.02 Composition of the Board of Directors.
     The Board of Directors shall consist of no less than seven directors and no more than thirteen directors, as determined by the Board of Directors from time to time by resolution. The majority of the directors shall be independent directors. For purposes of these Bylaws, “independent director” shall mean a director who is “independent” under the listing standards of any national securities exchange upon which the corporation’s shares are listed (but not the listing standards relating to the independence of the members of audit committees). The Board, acting in good faith, shall determine whether a director is an independent director, and shall have the exclusive right and power to interpret and apply the provisions of this Section 3.02. The validity of any action taken by the Board shall not be affected by the failure to have a majority of independent directors or by the existence of a vacancy at the time such action was taken.

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3.04 Election and Term of Office.
     Except as provided in the Articles of Incorporation and Section 3.05 of these Bylaws, directors shall be elected at the annual meeting of shareholders (or at any special meeting in lieu thereof). The terms of all directors shall expire at the next annual meeting of shareholders following their election, or upon their earlier death, resignation or removal. Despite the expiration of a director’s term, the director shall continue to hold office until a successor is elected and qualifies or until there is a decrease in the number of directors. A decrease in the number of directors shall not shorten an incumbent director's term. No individual shall be named or elected as a director without his prior consent.
     Appendix C shows the changes to the relevant portions of Section 3, paragraphs 3.02 and 3.04 of the Bylaws resulting from the proposed amendment, with deletions indicated by strike-outs and additions indicated by underlining. If approved, this amendment to the Bylaws will become effective immediately upon shareholder approval at the 2010 Annual Meeting.

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MANAGEMENT PROPOSAL TO ADOPT THE 2010 EQUITY
INCENTIVE PLAN
(Proposal 4)
     We are asking that our shareholders approve the 2010 Equity Incentive Plan (the “2010 Equity Plan”), which was approved by the Board on February 22, 2010. Under the 2010 Equity Plan, awards of non-qualified stock options (“Options”) and restricted share units to acquire up to 700,000 shares of our Common Stock (“Shares”) may be granted to our key management employees, including executive officers, and our Board members (“Participants”).
Required Vote
     Assuming the presence of a quorum, the affirmative vote of the holders of a majority of the votes cast in person or by proxy at the Annual Meeting of Shareholders is required for approval of the 2010 Equity Plan. In addition, NYSE rules require that the total number of votes cast on“FOR” the 2010 Equity Plan proposal (includingresolution must exceed the votes for or against and abstentions) represent over 50% of all votes entitled to be cast with respect to“AGAINST” the proposal.
resolution.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING“FOR”
THE PROPOSAL FOR ADOPTION OF THE 2010 EQUITY INCENTIVE
PLANFORGOING RESOLUTION.

Purpose and Importance of Plan
     We have a long-running record of producing a high level of operating and financial performance. That performance is evidenced by the following:
•Despite operating in the worst economic climate since the Great Depression, we were the only homebuilder of the 12 homebuilders on a national level to operate profitably for the 2009 and 2008 fiscal years, and for 2007, we were one of only three profitable homebuilders among the top 12.
•Our market capitalization leads the industry at December 31, 2009, having risen 950% over the ten-year period ending December 31, 2009, despite having 35% fewer outstanding shares as compared to the beginning of the measurement period.
•Our total shareholder return for the ten year period ending December 31, 2009 is a gain of 1,388.4%. The total shareholder return for the S&P 500 over that same period is a loss of 9.1%.
     NVR’s historical operating success is primarily attributable to the efforts of our employees. Retaining a loyal and experienced management team has been our number one operating strategy. That strategy and its successful implementation provide us a sizable competitive advantage because we typically seat our operating management teams in the same geographic markets throughout their careers. This enables them to become experts in the local market conditions and demographic trends for that region for marketing our homes effectively, allows them to establish long-term relationships with the best land developers and subcontractors in the area, and ensures that they have a thorough understanding of all local government homebuilding laws, rules and regulations. Our top five homebuilding senior managers average over 22 years with us, and our profit center homebuilding managers average 18.5 years of service with us. This employee retention focus also extends to our corporate leadership: our top eight corporate

52

49

SHAREHOLDER PROPOSALS

officials average over 17 years of employment, and Mr. Saville, our CEO, and Mr. Seremet, our CFO, have served NVR for approximately 29 years and 22 years, respectively. Simply put, we view our employees as are our most important asset.
     Our prior stock option plans have significantly aided us in the long term retention of our key management employees. We do not issue stock option grants annually. Rather, we have historically issued grants every three to four years, and our granting strategy has employed a “layered” approach by granting options such that there is one grant actively vesting over a four-year period, with another grant in a four to five year pre-vesting period (in essence, two plans outstanding at any given time but vesting occurs sequentially). We believe this structure ensures that our executives are focused on driving shareholder value over a long-term period and it has been a highly successful retention vehicle for us.
     However, as of present, none of our key managers or executive officers is tied to a long-term incentive plan after December 31, 2010. This condition is a result of the termination of the 2005 Stock Option Plan (“2005 Plan”) that our shareholders approved at the 2005 Annual Meeting. For the 2005 Plan, we revised our option program to require both performance and service-based vesting conditions. Under this 2005 Plan, no option would have become exercisable unless a performance target based on growth in diluted earnings per share (the “EPS Target”) was met. The EPS Target was set at a level that reflected a growth rate in diluted earnings per share of 10% per year for four years, based on our 2004 diluted earnings per share of $66.42, amounting to aggregate EPS of $339.00 per share over the four-year period ending December 31, 2008. Because of the downturn in the homebuilding industry and the general economy that began in the latter half of 2005, we failed to meet the 4-year aggregate performance measure. Therefore, the grants made to all plan participants, including the grants made to the named executive officers, expired unexercised on December 31, 2008. Further, because the EPS Target was a condition of the 2005 Plan itself, the 2005 Plan has expired and no further stock options grants may be made under it. Had the EPS Target been attained as the first condition of vesting, the stock option grants issued under the 2005 Plan would have vested in 25% increments on December 31, 2010, 2011, 2012 and 2013 based on continued employment.
     Thus, we are faced with having no long-term incentive plan post-December 31, 2010 for our named executive officers and other key managers. In addition to our belief that an effective long term incentive plan is essential to the long-term retention of our named executive officers and key managers as discussed above, we are faced with certain immediate employee retention issues. First, as general market conditions begin to improve, we are more vulnerable than we were in 2007 and 2008 to employee turnover as our competitors begin to expand under the improved conditions. In addition, our success during the downturn has led to more of our competitors moving towards the “asset lite” business model that we have successfully employed (see the operating and financial statistics cited above). This increases the risk that our competitors will attempt to hire away our key managers who are expertly versed in our “asset lite” model. We are also faced with the risk that we could lose a certain demographic segment of our key management group to retirement before certain succession candidates are adequately trained and experienced.
     Further, it is equally important to provide stock option grants to new managers as we continue to grow our business coming out of the over four-year economic downturn. We must have the ability to attract and competitively compensate high-quality personnel to assist us in our growth objectives. The length of the vesting period (through 2014) of the proposed 2010 Equity Plan is uniquely suited to assist us in providing long term incentives for new management to accomplish our various business objectives.
     By placing a large portion of compensation at risk through equity compensation plans, the future economic interests of key members of management are linked directly to those of our shareholders. Since the first stock option plan was adopted by shareholders in 1993, our market value per share has risen dramatically. From the period December 31, 1993 to December 31, 2009, NVR’s market value per share has grown from $9.75 per share to $710.71 per share. To further solidify the direct link between management and our shareholders, the Board has taken additional steps by mandating NVR Share ownership guidelines. Under the Stock Ownership Guidelines (the “Guidelines”) adopted by the Board in 2000, the Chief Executive Officer, Executive Officers and certain other key management personnel must acquire and hold Shares with a total fair market value ranging from one (1) to eight (8) times their annual base salaries depending upon their respective level of responsibility. The 2010 Equity Plan will assist our management in complying with the ownership guideline requirements.
     To combat the retention risks noted above, if approved, we are altering our historical approach and intend to issue half of the total award value in time-vested restricted share units that will vest in 2011 and 2012, and half of the award value in fixed-price stock options that will vest in 2013 and 2014. The restricted share units aid in bridging the impact caused by the termination of the 2005 Option Plan so that we can return to our preferred method of solely issuing fixed-price stock options. The Compensation Committee discussed the advisability of using a performance metric to earn the restricted share units; however, after fully vetting the matter, it was determined to be inappropriate due to the current unstable business climate. We have performed macro-level calculations to determine the 700,000 share size for which we are seeking approval, which is intended to provide grants to both current and future employees as we hire for future growth. However, we have not yet specifically set grant awards for any of the intended current participants, including for the named executive officers.

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     We recognize that the number of equity grants proposed for the 2010 Equity Plan, combined with the number of options outstanding under existing plans, exceeds the current dilution thresholds for employee equity compensation plans recommended by certain organizations. However, we feel that we have effectively managed any potential dilution from our stock option plans. Since 1993 we have repurchased approximately 20.8 million shares of our common stock, which is almost 2.5 times the total number of equity granted to employees and directors over the same time period.
     We believe that it is in the best interest of NVR and its shareholders to approve the 2010 Equity Plan for the reasons described above. The Board of Directors approved and adopted the 2010 Equity Plan on February 22, 2010, subject to shareholder approval. Shareholder approval of the 2010 Equity Plan is required by the New York Stock Exchange listing rules, and so that the Options may qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code.
Additional Equity Plan Information:
     As of March 5, 2010 (the record date), there were 837,813 stock options outstanding with a weighted average exercise price of $377.00 and a weighted average remaining life of 4.24 years. The following table sets forth additional information regarding stock options outstanding as of the record date:
             
      Weighted Weighted Average
  Options Average Remaining Years of
  Outstanding Exercise Price Contractual Life
Substantially in-the-money options outstanding in excess of six years  373,154  $209.16   1.36 
Options outstanding in excess of six years not continuously in the money since vest date  57,800  $453.74   3.38 
Options outstanding in excess of six years not vested  22,402  $353.82   3.01 
All options outstanding less than six years  384,457  $529.71   7.25 
Totals  837,813  $377.00   4.24 
     For purposes of RiskMetrics Group’s Stock Option Carve Out Policy, “substantially in-the-money options outstanding in excess of six years” is defined as the in-the-money options outstanding in excess of six years that have been continuously in-the-money after they were vested. Additional information regarding these options is as follows:
                 
     Remaining     Number of
Grant Date Vesting Schedule of Original Grant Contractual Life Exercise price Options
 08/02/2000  33 1/3% on 12/31/03, 04 and 05  0.41  $62.13   336 
 09/05/2000  33 1/3% on 12/31/00, 01 and 02  0.50  $72.00   7,000 
 05/03/2001  25% on 12/31/06, 07, 08 and 09  1.16  $189.00   322,203 
 11/01/2001  25% on 12/31/06, 07, 08 and 09  1.66  $158.30   1,125 
 12/01/2001  25% on 12/31/06, 07, 08 and 09  1.74  $181.50   675 
 01/21/2002  25% on 12/31/06, 07, 08 and 09  1.88  $202.05   625 
 05/01/2002  25% on 12/31/06, 07, 08 and 09  2.16  $369.75   4,250 
 07/29/2002  25% on 12/31/06, 07, 08 and 09  2.40  $278.00   6,750 
 08/01/2002  25% on 12/31/06, 07, 08 and 09  2.41  $288.50   1,100 
 08/05/2002  25% on 12/31/06, 07, 08 and 09  2.42  $269.35   375 
 09/01/2002  25% on 12/31/06, 07, 08 and 09  2.49  $296.50   925 
 10/25/2002  25% on 12/31/07, 08, 09 and 10  2.64  $338.00   1,875 
 11/11/2002  25% on 12/31/07, 08, 09 and 10  2.69  $313.12   750 
 12/02/2002  20% on 12/31/07, 08, 09, 10 and 11  2.75  $331.00   500 
 12/02/2002  10.5% on 12/31/06, 07, 08 and 09 and 29% on 12/31/10 and 11.  2.75  $331.00   1,000 
 01/21/2003  25% on 12/31/06, 07, 08 and 09  2.88  $348.00   4,625 
 04/14/2003  20% on 12/31/06, 07, 08, 09 and 10  3.11  $357.75   1,200 
 06/06/2003  25% on 12/31/07, 08, 09 and 10  3.25  $424.65   375 
 07/01/2003  25% on 12/31/06, 07, 08 and 09  3.32  $411.00   375 
 07/17/2003  25% on 12/31/06, 07, 08 and 09  3.37  $417.00   300 
 08/01/2003  25% on 12/31/06, 07, 08 and 09  3.41  $409.00   375 
 10/20/2003  25% on 12/31/06, 07, 08 and 09  3.63  $500.00   12,500 
 01/01/2004  25% on 12/31/06, 07, 08 and 09  3.83  $466.00   1,167 
 01/01/2004  25% on 12/31/07, 08, 09 and 10  3.83  $466.00   1,311 
 02/06/2004  25% on 12/31/07, 08, 09 and 10  3.93  $460.00   1,437 
Totals    1.36  $209.16   373,154 
Concentration Ratio for Fiscal Year 2009:
     The concentration ratio is defined by RiskMetrics Group as the total equity grants to the top five executives divided by the total equity grants to employees and directors. NVR did not grant any options to the top five executive officers during 2009.

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     A summary description of the principal terms and purpose of the 2010 Equity Plan is set forth below. This summary is qualified in its entirety by the detailed provisions of the 2010 Equity Plan, a copy of which is attached as Appendix D to this proxy statement.
General
     The aggregate number of Shares which may be covered by fixed-price stock options (“option”) or time-vested restricted share units (“restricted share units”) granted pursuant to the 2010 Equity Plan is 700,000 Shares. Of the 700,000 aggregate Shares, up to 40%, or 280,000, may be granted in the form of time-vested restricted share units. Approximately one hundred and seventy (170) of our employees, including our named executive officers, and Board Members, will be eligible to participate in the 2010 Equity Plan. Unexercised options or restricted share units that terminate prior to the expiration of the 2010 Equity Plan will again be available for grant under the 2010 Equity Plan. The maximum number of Shares that can be granted under the 2010 Equity Plan to any executive officer or other employee of the Company is 100,000 in any calendar year. The total limit on Shares that may be covered by options and restricted shares granted under the 2010 Equity Plan and the individual limit on grants are subject to adjustment in the event of stock dividends, stock splits, recapitalizations or a similar change in outstanding Shares. Because participation and the types of awards under the 2010 Equity Plan are subject to the discretion of the Compensation Committee of the Board of Directors, the benefits or amounts that will be received by any participant or groups of participants if the 2010 Equity Plan is approved are not currently determinable.
     The 2010 Equity Plan will be administered by the Compensation Committee which is comprised of six independent members of the Board. The Compensation Committee has the authority to make grants and to interpret the 2010 Equity Plan. The Compensation Committee has the authority to delegate to the Chief Executive Officer and the Senior Vice President of Human Resources, jointly, the authority to approve Option grants to participants other than to members of the Board and to our executive officers. Options granted pursuant to the 2010 Equity Plan are not intended to qualify as “incentive stock options” under Section 422 of the Internal Revenue Code. See “Federal Income Tax Consequences.”
     An option may be exercised to the extent that Shares have vested under the option (as described below), in whole or in part, and at any time prior to expiration or termination of the option. Payment may be made in immediately available funds or by the assignment and delivery of Shares that are not subject to restriction and have a fair market value equal to the applicable Option Price less any portion paid in cash. The Committee may also authorize the use of broker-assisted cashless exercise. Shares will be issued in satisfaction of restricted share units as soon as administratively practicable after the vesting dates, but in no event later than March 15th of the year immediately succeeding a vesting date.
     Options will be granted at an option price equal to the fair market value of the underlying Shares at the time the option is granted. Restricted share units are issued at a $0 exercise price. Fair market value of our Shares is generally determined by the closing price of the underlying Shares as reported by a national or regional stock exchange or other established securities market for publicly traded stock on the date immediately preceding the date of grant. The closing price of our Shares on March 5, 2010, as reported by the New York Stock Exchange, was $740.12 per share. Shareholder approval is required for any material amendment to the 2010 Equity Plan, including repricing option grants.
     Each option shall be granted for a term of ten (10) years from the date of grant, subject to the limitations below; however, no option shall commence vesting, in whole or in part, prior to 2013,

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except upon certain change of control events (as described below). Options granted pursuant to Option Agreements under the 2010 Equity Plan will become exercisable, in whole or in part, as to fifty percent of the underlying Shares on each of December 31, 2013 and 2014, respectively, subject to the limitations set forth below, or later, depending upon date of grant. Restricted share units will vest as to fifty-percent of the underlying Shares on each of December 31, 2011 and 2012, or later, depending upon date of grant. To date, there have been no grants of options or restricted share units under the 2010 Equity Plan.
     An option or restricted share unit will terminate immediately and may no longer be exercised if the participant ceases to be an employee of NVR as a result of a termination for “cause” as defined in the 2010 Equity Plan, and, except as otherwise provided at the grant date, options may be exercised for a period of up to three months (one year in the case of death or disability) following a termination of employment other than for cause. In the event of an involuntary termination of employment, death, disability or retirement, the participant will be given additional pro rata vesting for the portion of the year prior to termination for determining exercisability. Any limitation on the exercise of an option contained in any Option Agreement may be rescinded, modified or waived by the Compensation Committee, in its sole discretion, at any time after the date of grant of such option. Notwithstanding the forgoing, no rescission, modification, or waiver to an Option Agreement shall materially improve a Participant’s benefits under the 2010 Equity Plan from those benefits approved by the shareholders. Options and restricted share units are non-transferable during the Optionee’s lifetime.
     If we experience a change of control (as defined in the 2010 Equity Plan) and the equity awards are not assumed in the transaction, vesting of previously unvested options and restricted share units will be accelerated to the date of the change of control. NVR may provide that options that are not exercised prior to the change in control will terminate as long as vesting in the options were fully accelerated at the time of the transaction.
     No amendment may increase the aggregate number of Shares subject to the 2010 Equity Plan, extend the term of the 2010 Equity Plan, or accelerate vesting of option or restricted share unit grants, except upon a change of control. Further,Shareholder approval is required to re-price any Options at an Option price less than the Option price specified at an original date of grant or to exchange any Options which have a price greater than the fair market value of Company stock at the time of the exchange for restricted share units. The Board may from time to time suspend or at any time terminate the 2010 Equity Plan.
     Section 162(m) of the Internal Revenue Code limits publicly-held companies such as NVR to an annual deduction for federal income tax purposes of $1 million for compensation paid to their covered employees. However, performance-based compensation is excluded from this limitation. In the case of compensation attributable to the stock options, the stock options will be deemed to be performance-based if the options are granted by the compensation committee; the plan under which the option is granted states the maximum number of shares with respect to which options may be granted during a specified period to an employee; and under the terms of the option, the amount of compensation is based solely on an increase in the value of the common stock after the date of grant. The 2010 Equity Plan is designed so that the Options will qualify as performance-based for purposes of Section 162(m). However, the time-vested restricted shares will not qualify as performance-based even though shareholder approved, and will be subject to the 162(m) limit.

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Federal Income Tax Consequences
     The grant of a non-qualified option under the 2010 Equity Plan will result in no Federal income tax consequences to us or the Optionee at the grant date. Upon the exercise of an option granted under the 2010 Equity Plan, an Optionee will recognize ordinary income (subject to withholding taxes) in an amount equal to the difference between the exercise price and the fair market value of the Shares on the date of exercise. If we comply with applicable reporting requirements, we will be entitled to a business expense deduction in the same amount and at the same time as the Optionee recognizes ordinary income. Upon a subsequent sale or exchange of Shares acquired pursuant to the exercise of an option, the Optionee will have a taxable gain or loss, measured by the difference between the amount realized on the disposition and the tax basis of the shares (generally, the amount paid for the Shares plus the amount treated as ordinary income at the time the option was exercised).
     If an Optionee surrenders Shares in payment of part or all of the exercise price for an option, no gain or loss will be recognized with respect to the Shares surrendered and the Optionee will be treated as receiving an equivalent number of Shares pursuant to the exercise of the option in a nontaxable exchange. The basis of the Shares surrendered will be treated as the substituted tax basis for an equivalent number of Option Shares received, and the new Shares will be treated as having been held for the same holding period as had expired with respect to the transferred Shares. The difference between the aggregate option exercise price and the aggregate fair market value of the Shares received pursuant to the exercise of the option will be taxed as ordinary income.
     The grant of a restricted share unit under the 2010 Equity Plan will result in no Federal income tax consequences to us or the participant at the grant date. Upon the receipt of a Share in satisfaction of a restricted share unit award granted under the 2010 Equity Plan, a grantee will recognize ordinary income (subject to withholding taxes) in an amount equal to the fair market value of the Shares on the date of receipt. If we comply with applicable reporting requirements, we will be entitled to a business expense deduction for the year in which the restricted share units vested in the same amount as the participant recognizes ordinary income. Restricted share units will be subject to the 162(m) limitation as discussed above.

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Shareholder Proposals
Shareholder proposals that are intended by a shareholder to be included in our proxy statement for our next annual meeting of shareholders pursuant to Rule 14a-8 of the Securities and Exchange CommissionSEC must be received in the office of NVR’s Secretary no later than November 22, 2010.25, 2013. Shareholder proposals that are not submitted for inclusion in our proxy statement pursuant to Rule 14a-8, but that one or more shareholders intend to propose for consideration at our next annual meeting, must be submitted to the office of NVR’s Secretary no earlier than November 22, 201025, 2013 and no later than December 22, 201025, 2013 and must otherwise comply with the conditions set forth in Section 2.04 of our bylaws (or, the case of director nominations, Section 3.03 of our bylaws)Bylaws). Any shareholder proposal that is not submitted within the applicable time frame will not be eligible for presentation or consideration at the next annual meeting.

Other MattersOTHER MATTERS

Management knows of no other business to be presented for action at the Annual Meeting, other than those items listed in the notice of the Annual Meeting referred to herein. If any other business should properly come before the Annual Meeting, or any adjournment thereof, it is intended that the proxies will be voted in accordance with the best judgment of the persons acting thereunder.

Our Annual Report on Form 10-K for 2009,2012, including consolidated financial statements and other information, accompanies this Proxy Statement but does not form a part of the proxy soliciting material. A complete list of the shareholders of record entitled to vote at our Annual Meeting will be open and available for examination by any shareholder, for any purpose germane to the Annual Meeting, between 9:00 a.m. and 5:00 p.m. at our offices at 11700 Plaza America Drive, Suite 500, Reston, Virginia 20190, from April 20, 201022, 2013 through May 3, 20106, 2013 and at the time and place of the Annual Meeting.

Copies of our most recent Annual Report onForm 10-K,, including the financial statements and schedules thereto, which we are required to file with the SEC will be provided in print without charge upon the written request of any shareholder. Such requests may be sent to Investor Relations, NVR, Inc., 11700 Plaza America Drive, Suite 500, Reston, Virginia, 20190. Our SEC filings are also available to the public from our website at http://www.nvrinc.com, and the SEC’s website at http://www.sec.gov.

By Order of the Board of Directors,
(SIGNATURE LOGO)  

LOGO

James M. Sack
Secretary and General Counsel

Reston, Virginia

March 22, 2010

25, 2013

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Appendix A

NVR, Inc.INC.

Nominating Committee Policies and Procedures for the Consideration of

Board of Director Candidates

The following amended and restated policies and procedures were adopted by the NVR, Inc. (the “Company”) Nominating Committee (the “Committee”) on November 1, 2005:

February 19, 2013:

I.Policy Regarding Director Candidates Recommended by Security Holders.
A.The Company will consider all director candidates recommended by shareholders owning at least 5% of the Company’s outstanding shares at all times during the preceding year that meet the qualifications established by the Board of Directors (the “Board”).

A. The Company will consider all director candidates recommended by shareholders owning at least 5% of the Company’s outstanding shares at all times during the preceding year that meet the qualifications established by the Board of Directors (the “Board”).

II.Director Minimum Qualifications.

 A.Each director nominee is evaluated in the context of the full Board’s qualifications as a whole, with the objective of establishing a Board that can best perpetuate the success of the Company’s business and represent shareholder interests through the exercise of sound judgment. Each director nominee will be evaluated considering the relevance to the Company of the director nominee’s respective skills and experience, which must be complementary to the skills and experience of the other members of the Board;

 B.A substantial majority of the Board shall be independent as defined by the applicable exchange on which the Company’s shares are listed. The Audit, Compensation, Corporate Governance, Nominating and Qualified Legal Compliance Committees will be comprised solely of independent directors;directors who shall satisfy any independence requirements applicable to members of such committees under federal securities laws and the rules of the exchange on which the Company’s securities are listed;

 C.Director nominees must possess a general understanding of marketing, finance and other elements relevant to the success of a large publicly-traded company in today’s business environment, and an understanding of the Company’s business on an operational level;

 D.Each director may be assigned committee responsibilities. A director nominee’s educational and professional backgrounds must be consistent with the director nominee’s committee assignment (e.g., director nominees who will be assigned to the audit committeeAudit Committee must be financially literate as defined within the Company’s Audit Committee Charter);

 E.Director nominees must demonstrate a willingness to devote the appropriate time to fulfilling Board duties;

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 F.Director nominees shall not represent a special interest or special interest group whose agenda is inconsistent with the Company’s goals and objectives or whose approach and methods are inconsistent with what the Board believes is in the best interest of the Company’s shareholders; and

A-1

 G.Director nominees shall not be a distraction to the Board, nor shall a director nominee be disruptive to the achievement of the Company’s business mission, goals and objectives.

III.Procedures for Consideration of Security Holder Nominations.

 A.

Security holder nominations must includeALLof the information described in paragraphs C. through H. below and must be received in its entirety by the 120th calendar day before the date of the company’s proxy statement released to security holders in connection with the previous year’s annual meeting to be considered for the next scheduled annual meeting of shareholders;

 B.Security holder nominations must be in writing and submitted via registered mail or overnight delivery service to the Nominating Committee Chairman at the Company’s corporate headquarters’ address;

 C.Supporting documentation must be submitted that allows the Nominating Committee to verify ownership of not less than 5% of the Company’s outstanding shares at all times during the immediately preceding year;

 D.The shareholder must submit an affidavit from the director nominee stating that if elected, the director nominee is willing and able to serve on the Company’s Board for the full term to which the director nominee would be elected. The affidavit must also acknowledge that the director nominee is aware of, has read and understands the Company’s Code of Ethics, Standards of Business Conduct, Corporate Governance Guidelines, and Board of Director Committee Charters (collectively, the “Corporate Governance Documents”), and further that the director nominee acknowledges that, if elected, the director nominee is subject to and will abide by the Corporate Governance Documents;

 E.The director nominee must submit a signed independence questionnaire. This questionnaire shall be distributed to the director nominee upon receipt of a properly delivered security holder director nomination request, and must be returned within five days of receipt via registered mail or overnight delivery service to the Company’s Corporate Secretary and Nominating Committee Chairman, or designee;

 F.The shareholder must submit documentation as to the director nominee’s qualifications, which at a minimum must include:

 1.A complete biography;

2

 2.Full employment history, including current primary occupation;

 3.A signed consent form and waiver authorizing the Company to perform a full background investigation of the director nominee, including criminal and credit history, from a security firm acceptable to the Company in its sole discretion, an original report of which must be sent directly from the security firm to the Company’s Corporate Secretary and Nominating Committee Chairman, or designee;

A-2

 4.Documentation of educational levels attained, complete with official transcripts issued directly by the educational institution and sent directly from the educational institution to the Company’s Corporate Secretary and Nominating Committee Chairman, or designee. The Nominating Committee may waive this requirement if the security firm performing the background investigation verifies that the director nominee completed the educational levels indicated by the director nominee;

 5.Disclosure of all special interests and all political and organizational affiliations; and

 6.A complete list of clients if the director nominee is a consultant, attorney or other professional service provider;

 G.The shareholder must submit any additional information required to be included in the Company’s proxy statement for director nominees which determination will be made by the Company in its sole and absolute discretion (including, without limitation, information regarding business experience, involvement in legal proceedings, security ownership and transactions with the Company or management); and

 H.The information submitted by the security holder must include relevant contact information (e.g., address, phone numbers) for the submitting shareholder and the director nominee.

IV.Identification and Evaluation of Director Candidates.

 A.For directors standing for reelection, the Nominating Committee may consider:

 1.The general qualifications as noted above;

 2.The director’s attendance at Board and Committee meetings; and

 3.The director’s participation and contributions to Board activities.

3

 B.The Nominating Committee may consider the following when identifying and evaluating an individual who is not currently a Company director:

 1.Use of outside executive search firms or referrals, as appropriate; and

 2.Consideration of the Company’s minimum director qualifications as noted above in light of the specific qualifications possessed by the individual being considered; and

 C.Regardless of the source of the nomination, individuals being considered for nomination to the Company’s Board, who are not currently directors, must provide to the Company the information described in Section III, paragraphs D —– H.

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A-3

LOGO

Appendix NVR

IMPORTANT ANNUAL MEETING INFORMATION 000004

ENDORSEMENT LINE SACKPACK

MR A SAMPLE

DESIGNATION (IF ANY)

ADD 1

ADD 2

ADD 3

ADD 4

ADD 5

ADD 6

C123456789

000000000.000000 ext 000000000.000000 ext

000000000.000000 ext 000000000.000000 ext

000000000.000000 ext 000000000.000000 ext

Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. X

Annual Meeting Proxy Card

PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.

A Proposals — The Board of Directors recommends a vote FOR Proposals 1, 2, and 3.

1. Election of Directors: For Against Abstain For Against Abstain For Against Abstain

01 - C. E. Andrews 06 - Ed Grier 10 - David A. Preiser

02 - Robert C. Butler 07 - Manuel H. Johnson 11 - W. Grady Rosier

03 - Timothy M. Donahue 08 - Mel Martinez 12 - Dwight C. Schar

04 - Thomas D. Eckert 09 - William A. Moran 13 - Paul W. Whetsell

05 - Alfred E. Festa

For Against Abstain

2. Ratification of appointment of KPMG LLP as independent auditors for the year ending December 31, 2013.

3. Say on Pay – An advisory vote on the approval of executive compensation.

B

RESTATED ARTICLES Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below

Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.

Date (mm/dd/yyyy) – Please print date below Signature 1 – Please keep signature within the box. Signature 2 – Please signature within the box.

C 1234567890 JNT

1 U P X 1 5 3 6 3 2 1

MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE

140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND

MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND

MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND

01KSDB

LOGO

PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.

Proxy — NVR, Inc.

Proxy for the Annual Meeting of Shareholders — May 7, 2013

Important Notice Regarding the Availability of Proxy Materials for Shareholder Meeting to Be Held on May 7, 2013:

• The Proxy Statement and 2012 Annual Report are available at the following website address: www.edocumentview.com/nvr

THIS PROXY IS SOLICITED ON BEHALF OF INCORPORATION
THE BOARD OF
NVR, INC.

     1. Name. DIRECTORS

The nameundersigned hereby appoints James M. Sack, Daniel D. Malzahn and Eugene J. Bredow, or any of them, as proxies (and if the corporationundersigned is a proxy, as substitute proxies), each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side, all shares of common stock of NVR, Inc. (herein calledheld of record by the “Corporation”).

     2. Purposes.The purposeundersigned on March 8, 2013 at the Annual Meeting of Shareholders to be held at NVR’s Corporate Headquarters, 11700 Plaza America Drive, Suite 500, Reston, Virginia, 20190, on Tuesday, May 7, 2013 at 11:30 A.M. and at any adjournments or purposespostponements thereof.

If there are shares allocated to the undersigned in the NVR, Inc. Profit Sharing Trust Plan or the Employee Stock Ownership Plan, the undersigned hereby directs the Trustee to vote all full and fractional shares as indicated on the reverse of this card. Shares for which no voting instructions are received by May 2, 2013 will be voted by the Trustee in the same proportion as all other shares for which the CorporationTrustee has received voting instructions.

This proxy when properly executed will be voted as directed. If no direction is organized aregiven with respect to transact any or all lawful businessa particular proposal, this proxy will be voted FOR the election of thirteen nominees for which corporations may be incorporated underdirector, FOR the Virginia Stock Corporation Act.

     3. Registered Officeratification of appointment of KPMG LLP as independent auditors for the year ending December 31, 2013 and Agent.The post office addressFOR the advisory vote on the approval of the registered office of the Corporation is 8270 Greensboro Drive, Suite 810, McLean, Virginia 22102. executive compensation.

The name of the county in which the registered office is located is the County of Fairfax. The name of the registered agent of the Corporation is James M. Sack, who is Secretary of the Corporation and a member of the Virginia State Bar, and whose business office is the same as the registered office of the Corporation.

     4. Capital Stock.
          (a) The aggregate number of shares of all classes of stock which the Corporation shall have authority to issue is seventy-five million (75,000,000) shares, with a par value of one cent ($.01) per share, of which 60,000,000 shall be Common Stock and 15,000,000 shares shall be preferred stock, which shall have such designations and such preferences, limitations, and relative rights as may be established by one or more amendments of these Articles of Incorporation adopted by the Board of Directors orknows of no other business that will be presented at the shareholdersmeeting. If, however, other matters are properly presented, the designated proxies will vote the shares represented thereby in accordance with the Virginia Stock Corporation Act.
          (b) The Corporation shall not issue any nonvoting equity securitiesprovided thatthis provision, which is included in these Articles of Incorporation in compliance with section 1123(a)(6)recommendation of the United States Bankruptcy Code of 1978,Board as amended, shall haveto such matters, or if no force or effect beyond that required by such section 1123(a)(6) and shall be effective only for so long as such section 1123(a)(6)recommendation is in effect and applicable to the Corporation.
     5. Reserved.
     6.No Preemptive Rights.No shareholder of the Corporation shall have any preemptive rights to purchase, subscribe for or otherwise acquire any stock or other securities of the Corporation, whether now or hereafter authorized, and any and all preemptive rights are hereby denied.
     7. Directors.

1

          (a) The number of directors of the Corporation shall be no less than seven and no more than thirteen, as determined from time to timemade by the Board, of Directors by resolution. The Board of Directors of the Corporation shall be divided into three classes that are as equal in number as possible. The initial directors of the first class (Class I) Beginning with the annual meeting of shareholders to be held in 2011, each director shall hold office for a term expiring at the 1994 annual meeting of shareholders; the initial directors of the second class (Class II) shall hold office for a term expiring at the 1995 annual meeting of shareholders; and the initial directors of the third class (Class III) shall hold office for a term expiring at the 1996 annual meeting of shareholders. At each annual meeting of shareholders after 1994, the successors to the class of directors whose terms then shall expire shall be identified as being of the same class as the directors they succeed and elected to hold office for a term expiring at the third succeeding annual meeting of shareholdersnext annual meeting of shareholders following such director’s election and until such director’s successor is elected and qualified. Any reduction of the authorized number of directors will not have the effect of removing any director prior to the expiration of such director’s term. The existence of a vacancy on the board of directors shall not affect the validity of any action taken by the board of directors during the pendency of such vacancy.
          (b) Directors shall be removed only for cause and only by the affirmative vote of holders of shares of the Corporation having a majority of the votes entitled to be cast in the election of directors in accordance with procedures set forth in the bylaws, not inconsistent with these Articles of Incorporation. For purposes of this Article 7, “cause” shall mean, with regard to any director, (i) a director’s continuing, willful failure, or physical inability, to perform the duties required of his or her position, (ii) gross negligence or breach of fiduciary duty by a director in the performance of his or her duties as a director, (iii) the conviction or plea ofnolo contendereto a crime by a director that constitutes a felony under the laws of the United States, or any state thereof, which results or was intended to result directly or indirectly in gain or personal enrichment by such director at the expense of the Corporation or involves moral turpitude, or (iv) material breaches (following notice and an opportunity to cure) of any covenants by the director contained in any agreement between the director and the Corporation or any subsidiary.
          (c) Except with respect to the filling of vacancies as provided in the Corporation’s Bylaws, and unless otherwise required by law, each director shall be elected by a majority of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present; provided that if the number of nominees exceeds the number of directors to be elected, each director shall be elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present. For purposes of this Article 7I, a majority of the votes cast means that the number of shares voted “for” a director must exceed the number of shares voted “against” that director.
     8. Indemnification.
          (a) The Corporation shall to the fullest extent permitted by the laws of

2

the Commonwealth of Virginia, as presently in effect or as the same hereafter may be amended and supplemented, indemnify an individual who is or was a director or officer of the Corporation or any constituent corporation or other business entity absorbed by the Corporation in a merger or consolidation, or, at the request of the Corporation or such other corporation or business entity, any other corporation or business entity and who was, is, or is threatened to be made a named defendant or respondent in any threatened, pending or completed action, suit, or proceeding, whether civil, criminal, administrative or investigative and whether formal or informal (collectively, a “proceeding”) by reason of the fact that such individual is or was a director or officer of the Corporation, against any obligation to pay a judgment, settlement, penalty, fine (including any excise tax assessed with respect to any employee benefit plan) or other liability and reasonable expenses (including counsel fees) incurred with respect to such a proceeding, except such liabilities and expenses as are incurred because of such director’s or officer’s willful misconduct or knowing violation of the criminal law. The Corporation is authorized to contract in advance to indemnify and make advances and reimbursements for expenses to any of its directors or officers to the same extent provided in this Article 8. The Corporation also shall have the authority to indemnify any of its employees or agents, upon a determination of the board of directors that such indemnification is appropriate, to the same extent as the indemnification of its directors and officers permitted in this Article 8.
          (b) Unless a determination has been made that indemnification is not permissible, the Corporation shall make advances and reimbursements for expenses reasonably incurred by a director or officer in a proceeding as described above upon receipt of an undertaking from such director or officer to repay the same if it is ultimately determined that such director or officer is not entitled to indemnification. Such undertaking shall be an unlimited, unsecured general obligation of the director or officer and shall be accepted without reference to such director’s or officer’s ability to make repayment.
          (c) The determination that indemnification under this Article is permissible, the authorization of such indemnification (if applicable), and the evaluation as to the reasonableness of expenses in a specific case shall be made as provided by law. The termination of a proceeding by judgement, order, settlement, conviction, or upon a plea ofnolo contendereor its equivalent shall not of itself create a presumption that a director or officer acted in such a manner as to make him ineligible for indemnification.
          (d) For the purposes of this Article 8, every reference to a director or officer shall include, without limitation, (i) every director or officer of the Corporation, (ii) an individual who, while a director or officer, is or was serving at the Corporation’s request as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, (iii) an individual who formerly was a director or officer of the Corporation or occupied any of the other positions referred to in clause (ii) of this sentence, and (iv) the estate, personal representative, heirs, executors and administrators of a director or officer of the Corporation or other person referred to herein. Service as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan or other enterprise controlled by the Corporation shall be deemed service at the request of the Corporation. A

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director or officer shall be deemed to be serving an employee benefit plan at the Corporation’s request if such person’s duties to the Corporation also impose duties on, or otherwise involve services by, such person to the plan or to participants in or beneficiaries of the plan.
          (e) Indemnification pursuant to this Article 8 shall not be exclusive of any other right of indemnification to which any person may be entitled, including indemnification pursuant to a valid contract, indemnification by legal entities other than the Corporation and indemnification under policies of insurance purchased and maintained by the Corporation or others. No person shall be entitled to indemnification by the Corporation, however, to the extent such person is actually indemnified by another entity, including an insurer. In addition to any insurance which may be maintained on behalf of any director, officer, or other person, the Corporation is authorized to purchase and maintain insurance against any liability it may have under this Article 8 to protect any of the persons named above against any liability arising from their service to the Corporation or any other entity at the Corporation’s request, regardless of the Corporation’s power to indemnify against such liability. The provisions of this Article 8 shall not be deemed to preclude the Corporation from entering into contracts otherwise permitted by law with any individuals or entitles other than those named in this Article 8.
          (f) The provisions of this Article 8 shall be applicable from and after its adoption even though some or all of the underlying conduct or events relating to a proceeding may have occurred before such adoption. No amendment, modification or repeal of this Article 8 shall diminish the rights provided hereunder to any person arising from conduct or events occurring before the adoption of such amendment, modification or repeal. If any provision of this Article 8 or its application to any person or circumstance is held invalid by a court of competent jurisdiction, the invalidity shall not affect other provisions or applications of this Article 8, and to this end the provisions of this Article 8 are severable.
     9. Limitation of Liability of Officers and Directors.Except as otherwise provided by the laws of the Commonwealth of Virginia, as presently in effect or as the same hereafter may be amended and supplemented, no damages shall be assessed against an officer or director in any proceeding brought by or in the right of the Corporation or brought by or on behalf of shareholders of the Corporation. The liability of an officer or director shall not be eliminated as provided in this Article 9 if the officer or director engaged in willful misconduct or a knowing violation of the criminal law or any federal or state securities law, including, without limitation, any laws prohibiting insider trading or manipulation of the market for any security. The provisions of this Article 9 shall be applicable from and after its adoption even though some or all of the underlying conduct or events relating to a proceeding may have occurred before such adoption.
     10. Amendment.These articles or incorporation may be amended by the affirmative vote of a majority of the entire board of directors, to the extent permitted by the Virginia Stock Corporation Act, or by the affirmative vote of holders of a majority of the outstanding shares of the Corporation, or, if more than one voting group is entitled to vote separately on such amendment, a majority of the outstanding shares in such voting group, at a meeting at which a quorum is present with respect to each voting group eligible to vote

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separately on such amendment;provided thatthe provisions of Article 7 shall not be amended prior to May 1, 1995 unless the amendment shall have been approved and recommended to the shareholders by all directors then in office.
     11. Perpetual Existence.The duration of the Corporation shall be perpetual.
     12. Certain Transactions.The Corporation shall not be subject to Article 14 (Affiliate Transactions) or Article 14.1 (Control Share Acquisitions) of the Virginia Stock Corporation Act.

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Appendix C
NVR, INC.
BYLAWS
Adopted
as of
September 30, 1993
(and amended as ofMay 4, 2007[    ], 2010)

TABLE OF CONTENTS
       
    Page 
       
ARTICLE I CORPORATE OFFICE  1 
1.01 Registered Office  1 
1.02 Other Offices  1 
ARTICLE II MEETING OF SHAREHOLDERS  1 
2.01 Annual Meetings  1 
2.02 Place  1 
2.03 Notice  1 
2.04 Matters to be Considered at Annual Meeting  2 
2.05 Special Meetings  3 
2.06 Quorum  3 
2.07 Voting  3 
2.08 Proxies  4 
2.09 Fixing Record Date  5 
2.10 Conduct of Meetings  5 
2.11 Action Without Meeting  5 
2.12 Shareholders’ List for Meeting  5 
ARTICLE III DIRECTORS  6 
3.01 Powers  6 
3.02 Composition of the Board of Directors  6 
3.03 Director Nominations  6 
3.04 Election and Term of Office  7 
3.05 Vacancies  8 
3.06 Resignation and Removal of Directors  8 
3.07 Place of Meetings  8 
3.08 Regular Meetings  8 
3.09 Special Meetings — Call and Notice  8 
3.10 Meetings by Telephone  9 
3.11 Quorum; Vote  9 
3.12 Presumption of Assent  10 
3.13 Board Action Without a Meeting  10 
3.14 Advisors  10 
3.15 Compensation  10 
ARTICLE IV COMMITTEES  10 
4.01 Standing Committees  10 
4.02 Other Committees  11 
4.03 Committee Authority  11 
4.04 Conduct of Meetings  11 
ARTICLE V OFFICERS  12 
5.01 Required Officers; Other Officers  12 
5.02 Appointment and Term of Office  12 
5.03 Resignation and Removal of Officers  12 

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    Page 
       
5.04 Compensation of Officers  12 
ARTICLE VI SHARE PROVISIONS  12 
6.01 Issuance of Shares  12 
6.02 Liability for Shares Issued before Payment  13 
6.03 Certificates Evidencing Shares  13 
6.04 Transfers of Stock  13 
6.05 Regulations  13 
6.06 Lost, Stolen, Destroyed, or Mutilated Certificates  13 
ARTICLE VII MISCELLANEOUS  14 
7.01 Corporate Records  14 
7.02 Corporate Seal  14 
7.03 Fiscal Year  14 
7.04 Contracts, Checks, Notes and Drafts  14 
7.05 Transactions with Affiliates  14 
ARTICLE VIII AMENDMENT OF BYLAWS  15 

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BYLAWS
OF
NVR, INC.
ARTICLE I
CORPORATE OFFICE
1.01 Registered Office.
     The address of the registered office of the corporation shall be 8270 Greensboro Drive, Suite 810, McLean, Virginia 22102 and the registered agent at such address shall be James M. Sack.
1.02 Other Offices.
     The corporation may also have other offices at such locations both within and without the Commonwealth of Virginia as the Board of Directors may from time to time determine or as the business of the corporation may require.
ARTICLE II
MEETING OF SHAREHOLDERS
2.01 Annual Meetings.
     Annual meetings of shareholders shall be held within five months after the end of the corporation’s fiscal year, or such other time as may be determined by the Board of Directors, at such plans, date and hour as shall be designated from time to time by the Board of Directors and stated in a notice of the meeting or a duly executed waiver of notice thereof.
2.02 Place.
     All meetings of shareholders shall be held in the County of Fairfax, in the Commonwealth of Virginia or at such other place within or without Virginia as may be designated for that purpose from time to time by the Board of Directors and stated in the notice of the meeting or a duly executed waiver of notice thereof.
2.03 Notice.
     (a) The corporation shall notify shareholders of the date, time and place of each annual and special shareholders’ meeting. Such notice shall be given no less than ten (10) or more than sixty (60) days before the meeting date, except that notice of a shareholders’ meeting to act on an amendment of the Articles of Incorporation, a plan of merger or share exchange, a proposed sale of assets which must be approved by the shareholders, or the dissolution of the corporation shall be given not less than twenty-five (25) nor more than sixty (60) days before the meeting date. Unless otherwise required by the Articles of Incorporation or by law, the corporation is required to give notice only to shareholders entitled to vote at the meeting.

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     (b) Unless otherwise required by the Articles of Incorporation or by law, notice of an annual meeting need not state the purpose or purposes for which the meeting is called. Notice of a special meeting shall state the purpose or purposes for which the meeting is called.
     (c) If an annual or special meeting is adjourned to a different date, time or place, notice need not be given if the new date, time or place is announced at the meeting before adjournment. If a new record date for the adjourned meeting is fixed as specified in Section 2.09 of these Bylaws or by law, however, notice of the adjourned meeting shall be given to persons who are shareholders as of the new record date.
     (d) Notwithstanding the foregoing, no notice of a shareholders’ meeting need be given to a shareholder if (i) an annual report and proxy statements for two consecutive annual meetings of shareholders or (ii) all, and at least two, checks in payment of dividends or interest on securities during a twelve-month period, have been sent by first-class United States mail, addressed to the shareholder at his or her address as it appears on the share transfer books of the corporation, and returned undeliverable. The obligation of the corporation to give notice of shareholders’ meetings to any such shareholder shall be reinstated once the corporation has received a new address for such shareholder for entry on its share transfer books.
2.04 Matters to be Considered at Annual Meeting.
     (a) At an annual meeting of shareholders, only such business shall be conducted as shall have been properly brought before the annual meeting (i)best judgment pursuant to the notice of meeting delivered to shareholders in accordance with Section 2.03 of this Article II, (ii) by, or at the direction of, the Board of Directors or (iii) by any shareholder of the corporation who was a shareholder of record both at the time of giving notice provided for in this Section 2.04 and at the time of the annual meeting, who is entitled to vote at the annual meeting and who complied with the notice procedures set forth in this Section 2.04. For business (other than nomination of a candidate for director, which shall be governed by Section 3.03 of these Bylaws) to be properly brought before an annual meeting by a shareholder pursuant to clause (iii) of the preceding sentence, the shareholder must have given timely notice thereof in writing to the Secretary of the corporation. To be timely, a shareholder’s notice must be given, either by personal delivery or by United States certified mail, postage prepaid, and received at the principal executive offices of the corporation not earlier than the close of business on the 120th day prior to the first anniversary of the date of mailing of the notice for the preceding year’s annual meeting and not later than the close of business on the 90th day prior to the first anniversary of the date of mailing of the notice for the preceding year’s annual meeting; provided, however, thatauthority granted in the event that no annual meeting was held in the preceding year or the dateproxy.

C Non-Voting Items

Change of the mailing of the notice for the current year’s annual meeting is advanced or delayed by more than 30 days from the first anniversary of the date of mailing of the notice for the preceding year’s annual meeting, notice by the shareholder, to be timely, must be so delivered not earlier than the close of business on the 120th day prior to the date of mailing of the notice for such annual meeting and not later than the close of business on the later of the 90th day prior to the date of mailing of the notice for such annual meeting or the 10th day following the day on which public announcement of the date of mailing of the notice for such meeting is first made by the corporation. The public announcement of a postponement or adjournment of an annual meeting shall not commence aAddress — Please print new time period for the giving of a shareholder’s notice as described above.

     (b) A shareholder’s notice must contain, as of the date of its delivery to the Secretary of the corporation: (i) the name and address of the shareholder delivering the notice, as they appear on the corporation’s stock transfer books, and the name and address (if different) of any beneficial owner(s) on whose behalf the proposal is made; (ii) the class and number of shares of stock of the corporation that are owned beneficially and of record by the shareholder and any such beneficial owner; (iii) a representation that the shareholder is a shareholder of record and intends to appear in person or by proxy at the annual

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below.

PLEASE MARK, DATE, SIGN, AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED ENVELOPE.

meeting to introduce the business specified in the notice; and (iv) a description in reasonable detail of the business proposed to be brought before the annual meeting, including the complete text of any resolutions to be presented at the annual meeting, the reasons for conducting the proposed business at the annual meeting, and any material interest in the proposed business of the shareholder and any beneficial owner, including any anticipated benefit to the shareholder or beneficial owner.
     (c) The presiding officer of the annual meeting shall have the discretion to declare at the annual meeting that any business proposed by a shareholder to be considered at the annual meeting is out of order and shall not be transacted at the annual meeting if the presiding officer concludes that (i) the matter has been proposed in a manner inconsistent with this Section 2.04; or (ii) the subject matter of the proposed business is inappropriate for consideration at the annual meeting.
     (d) For purposes of this Section 2.04, (i) the “date of mailing of the notice” means the date of the proxy statement for the solicitation of proxies for election of directors and (ii) “public announcement” means disclosure either (1) in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service, or in a press release transmitted to the principal securities exchange on which the corporation’s common stock is traded, or (2) in a document filed by the corporation with the United States Securities and Exchange Commission.
     (e) Notwithstanding the foregoing provisions of this Section 2.04, a shareholder shall also comply with all applicable requirements of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules and regulations thereunder with respect to matters set forth in this Section 2.04. Nothing in this Section 2.04 shall affect any rights of shareholders to request inclusion of proposals in the corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.
2.05 Special Meetings.
     Special meetings of shareholders may be called by a majority of the entire Board of Directors. No other person shall be entitled to call a special meeting. Only business within the purpose or purposes described in the meeting notice may be conducted at a special shareholders’ meeting.
2.06 Quorum.
     Action may be taken at a meeting of shareholders with respect to any matter only if a quorum exists with respect to each voting group entitled to vote separately with respect to such matter. Unless more than one voting group is entitled to vote separately with respect to a matter, and unless provided otherwise by the Articles of Incorporation or by law, presence in person or by proxy of the holders of record of shares representing a majority of the votes entitled to be cast on such matter shall constitute a quorum with respect to such matter. If more than one voting group is entitled to vote separately on such matter, unless provided otherwise by the Articles of Incorporation or by law, presence in person or by proxy of the holders of record of shares representing a majority of the votes entitled to be cast on the matter by each voting group constitutes a quorum of that voting group for action on that matter. Once a share is represented for any purpose at a meeting, it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or shall be set for the adjourned meeting. Holders of shares representing less than a quorum may adjourn a meeting.
2.07 Voting.
     (a) Unless provided otherwise by the Articles of Incorporation or by law, each outstanding share, regardless of class, is entitled to one vote on each matter voted on at a shareholders’ meeting. Unless the Articles of Incorporation provide otherwise, in the election of directors each outstanding share,

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regardless of class, is entitled to one vote for as many persons as there are directors to be elected at that time and for whose election the shareholder has a right to vote.
     (b) If the name signed on a vote, consent, waiver or proxy appointment corresponds to the name of a shareholder of record, the corporation, if acting in good faith, is entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the shareholder. If the name signed on a vote, consent, waiver or proxy appointment does not correspond to the name of a shareholder of record, the corporation, if acting in good faith, is nevertheless entitled, but is not required, to accept the vote, consent, waiver or proxy appointment and give it effect as the act of the shareholder to the full extent permitted by law. The corporation is entitled to reject a vote, consent, waiver or proxy appointment if the Secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory’s authority to sign for the shareholder.
     (c) If a quorum exists, action on a matter, other than the election of directors or amendment of these Bylaws in accordance with Article VIII, by any voting group is approved if the votes cast within such voting group favoring the action exceed the votes cast within such voting group opposing the action, unless a greater number of affirmative votes is required by law, the Articles of Incorporation or these Bylaws. If the Articles of Incorporation or law provides for voting only by a single voting group on a matter, action on that matter is taken when voted upon by that voting group as provided in this Section 2.07 or by law or these Bylaws. If the Articles of Incorporation or law provides for voting by two or more voting groups on a matter, action on that matter is taken only when voted upon by each of those voting groups counted separately as provided in this Section 2.07 or by law. Action may be taken by one voting group on a matter even though no action is taken by another voting group entitled to vote on the matter.
     (d) As provided in the Articles of Incorporation, each director shall be elected by a majority of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present; provided that if the number of nominees exceeds the number of directors to be elected, each director shall be elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present. For purposes of this Section 2.07(d), a majority of the votes cast means that the number of shares voted “for” a director must exceed the number of shares voted “against” that director.
2.08 Proxies.
     A shareholder may vote the shares held in person or by proxy. A shareholder may appoint a proxy to vote or otherwise act for him by signing an appointment form, either personally or by his attorney-in-fact. An appointment of a proxy is effective when received by the Secretary or other officer or agent authorized to tabulate votes. An appointment is valid for eleven (11) months unless a longer period is expressly provided in the appointment form. An appointment of a proxy is revocable by the shareholder unless the appointment form conspicuously states that it is irrevocable and the appointment is coupled with an interest. An irrevocable appointment is revoked when the interest with which it is coupled is extinguished. The death or incapacity of the shareholder appointing a proxy does not affect the right of the corporation to accept the proxy’s authority unless notice of the death or incapacity is received by the Secretary or other officer or agent authorized to tabulate votes before the proxy exercises his authority under the appointment. Subject to any express limitation on the proxy’s authority appearing on the face of the appointment form and other limitations provide by law, the corporation is entitled to accept the proxy’s vote or other action as that of the shareholder making the appointment.

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2.09 Fixing Record Date.
     The Board of Directors may fix a future date as the record date for one or more voting groups in order to make a determination of shareholders for any purpose. The record date may not be more than 70 days before the meeting or action requiring a determination of shareholders. A determination of shareholders entitled to notices of or to vote at a shareholders’ meeting is effective for any adjournment of the meeting unless the Board of Directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting.
2.10 Conduct of Meetings.
     The Chairman of the Board, if any, shall preside over all meetings of the shareholders as chairman of the meeting. In the absence of the Chairman of the Board, the Vice Chairman of the Board, if any, or in his absence the Chief Executive Officer or, in his absence the President, or in his absence a Vice President, or in the absence of any such officer a person designated by the Board of Directors, or in the absence of any such person a chairman chosen at the meeting shall preside over the meeting. The Secretary of the corporation shall act as secretary of all the meetings if he is present. If the Secretary is not present, the chairman shall appoint a secretary of the meeting. The chairman of the meeting may appoint one or more inspectors of election to determine the qualification of voters, the validity of proxies, and the results of ballots.
2.11 Action Without Meeting.
     Action required or permitted to be taken at a shareholders’ meeting may be taken without a meeting and without action by the Board of Directors if the action is taken by all the shareholders entitled to vote on the action in the manner provided in the Virginia Stock Corporation Act.
2.12 Shareholders’ List for Meeting.
     (a) The officer or agent having charge of the share transfer records of the corporation shall make, at least ten (10) days before each meeting of shareholders, a complete list of the shareholders entitled to vote at such meeting or any adjournment thereof, with the address of and the number of shares held by each. The list shall be arranged by voting group and within each voting group by class or series of shares. For a period of ten (10) days prior to the meeting, the list of shareholders shall be kept on file at the registered office of the corporation or at its principal office or at the office of its transfer agent or registrar and shall be subject to inspection by any shareholder at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any shareholder during the whole time of the meeting for the purposes thereof. The original share transfer records shall be prima facie evidence as to who are the shareholders entitled to examine such list or transfer records or to vote at any meeting of shareholders.
     (b) If the requirements of this action have not been substantially complied with, the meeting shall, on the demand of any shareholder in person or by proxy, be adjourned until the requirements are complied with. Refusal or failure to prepare or make available the shareholders’ list does not affect the validity of action taken at the meeting prior to the making of any such demand, but any action taken by the shareholders after the making of any such demand shall be invalid and of no effect.

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ARTICLE III
DIRECTORS
3.01 Powers.
     All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation managed under the direction of, the Board of Directors, subject to any limitation set forth in the Articles of Incorporation.
3.02 Composition of the Board of Directors.
     The Board of Directors shall consist of no less than seven directors and no more than thirteen directors, as determined by the Board of Directors from time to time by resolution. The Board of Directors shall consist of three classes that are as equal in number as possible, as set forth in the Articles of Incorporation. The majority of the directors shall be independent directors. For purposes of these Bylaws, “independent director” shall mean a director who is “independent” under the listing standards of any national securities exchange upon which the corporation’s shares are listed (but not the listing standards relating to the independence of the members of audit committees). The Board, acting in good faith, shall determine whether a director is an independent director, and shall have the exclusive right and power to interpret and apply the provisions of this Section 3.02. The validity of any action taken by the Board shall not be affected by the failure to have a majority of independent directors or by the existence of a vacancy at the time such action was taken.
3.03 Director Nominations.
     (a) Nomination of candidates for election as directors of the corporation at any annual or special meeting of shareholders may be made (i) pursuant to the corporation’s notice of meeting, (ii) by, or at the direction of, the Board of Directors or (iii) by any shareholder of the corporation who was a shareholder of record both at the time of giving notice provided for in this Section 3.03 and at the time of the applicable meeting, who is entitled to vote at the applicable meeting and who complied with the notice procedures set forth in this Section 3.03 (and, in the case of a special meeting, provided that the Board of Directors has determined that directors shall be elected at such special meeting). Only persons nominated in accordance with the procedures set forth in this Section 3.03 shall be eligible for election as directors at an annual or special meeting of shareholders. Nominations other than those made by, or at the direction of, the Board of Directors shall be made pursuant to timely notice in writing to the Secretary of the corporation as set forth in this Section 3.03. The public announcement of a postponement or adjournment of an annual or special meeting to a later date or time shall not commence a new time period for the giving of a shareholder’s notice as described below.
     (b) With respect to an annual meeting, to be timely, a shareholder’s notice must be given, either by personal delivery or by United States certified mail, postage prepaid, and received at the principal executive offices of the corporation not earlier than the close of business on the 120th day prior to the first anniversary of the date of mailing of the notice for the preceding year’s annual meeting and not later than the close of business on the 90th day prior to the first anniversary of the date of mailing of the notice for the preceding year’s annual meeting; provided, however, that in the event that no annual meeting was held in the preceding year or the date of the mailing of the notice for the current year’s annual meeting is advanced or delayed by more than 30 days from the first anniversary of the date of mailing of the notice for the preceding year’s annual meeting, notice by the shareholder, to be timely, must be so delivered not earlier than the close of business on the 120th day prior to the date of mailing of the notice for the annual meeting and not later than the close of business on the later of the 90th day prior to the date of mailing of the notice for the annual meeting or the 10th day following the day on which public announcement of the date of mailing of the notice for the meeting is first made by the corporation.

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     (c) With respect to a special meeting, to be timely, a shareholder’s notice must be given, either by personal delivery or by United States certified mail, postage prepaid, and received at the principal executive offices of the corporation not earlier than the close of business on the 120th day prior to such special meeting and not later than the close of business on the later of the 90th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and the nominees proposed by the Board of Directors to be elected at such meeting.
     (d) The shareholder’s notice required by this Section 3.03 shall set forth, as of the date of delivery of the notice to the Secretary of the corporation (i) as to each person whom the shareholder proposes to nominate for election or re-election as a director: (1) the nominee’s name, age, business address and residence address; (2) the nominee’s principal occupation or employment; (3) the class and number of shares of the corporation’s stock owned beneficially or of record by the nominee on the date of the shareholder’s notice; (4) any other information relating to the nominee that would be required to be disclosed in a proxy statement soliciting proxies to elect the nominee pursuant to Regulation 14A under the Exchange Act, or any successor provision, and the nominee’s written consent to be named in the proxy statement as a nominee and to serve as a director if elected; and (5) a statement whether such person intends to comply with the Board’s corporate governance policies with respect to director resignations; and (ii) as to the shareholder giving the notice and each beneficial owner, if any, on whose behalf the nomination is made: (1) the name and address of the shareholder, as they appear on the corporation’s stock transfer books, and name and address, if different, of such beneficial owner; (2) the class and number of shares of stock of the corporation that are owned beneficially or of record by the shareholder or beneficial owner; (3) a representation that the shareholder is a shareholder of record and intends to appear in person or by proxy at the meeting to nominate the person of persons specified in the notice; and (4) a description of all arrangements or understandings between the shareholder or beneficial owner and each nominee pursuant to which the nomination or nominations are to be made by the shareholder.
     (e) For purposes of this Section 3.03, (i) the “date of mailing of the notice” means the date of the proxy statement for the solicitation of proxies for election of directors and (ii) “public announcement” means disclosure either (1) in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service, or in a press release transmitted to the principal securities exchange on which the corporation’s common stock is traded, or (2) in a document filed by the corporation with the United States Securities and Exchange Commission.
3.04 Election and Term of Office.
     Except as provided in the Articles of Incorporation and Section 3.05 of these Bylaws, directors in a particular class shall be elected at the annual meeting of shareholders (or at any special meeting in lieu thereof) at which the terms of the directors in such class expires. The terms of all directors, other than the initial directors, whose terms shall expire as provided in the Articles of Incorporation, shall expire at the thirdnext annual meeting of shareholders following their election, or upon their earlier death, resignation or removal. Despite the expiration of a director’s term, the director shall continue to hold office until a successor is elected and qualifies or until there is a decrease in the number of directors. A decrease in the number of directors shall not shorten an incumbent director’s term. No individual shall be named or elected as a director without his prior consent.
3.05 Vacancies.

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     Unless the Articles of Incorporation provide otherwise, if a vacancy occurs on the Board of Directors, including a vacancy resulting from an increase in the number of directors, the shareholders may fill the vacancy, or a majority of the entire Board of Directors then in office, upon recommendation of the Nominating Committee, may fill the vacancy, or if the directors remaining in office constitute fewer than a quorum, they may fill the vacancy by the affirmative vote of a majority of directors remaining in office. Unless the Articles of Incorporation provide otherwise, if the vacant office was held by a director elected by a voting group of shareholders, only the holders of that voting group are entitled to vote to fill the vacancy if it is to be filled by the shareholders. A vacancy that will occur at a specific later date may be filled before the vacancy occurs but the new director may not take office until the vacancy occurs.
3.06 Resignation and Removal of Directors.
     (a) A director may resign at any time by delivering written notice to the Board of Directors, the Chairman, the Chief Executive Officer, the President, or the Secretary. A resignation is effective when the notice is delivered unless the notice specifies a later effective date. If a resignation is made effective at a later date, the Board of Directors may fill the pending vacancy before the effective date if the Board of Directors provides that the successor will not take office until the effective date of the resignation.
     (b) A director may be removed only for cause, as defined in the Articles of Incorporation, by the shareholders at a meeting (which may be an annual meeting or a special meeting) of the shareholders held in accordance with these Bylaws. The notice for such meeting must state that the purpose, or one of the purposes of the meeting is the removal of such director, specify the alleged grounds for such removal, and include any statement that such director provides in response to such allegations. If a director has been elected by a voting group of shareholders, only the shareholders of that voting group may participate in the vote to remove him. Unless the Articles of Incorporation require a greater vote, a director may be removed if the number of votes cast to remove him constitutes a majority of the votes entitled to be cast at an election of directors of the voting group or voting groups by which such director was elected.
3.07 Place of Meetings.
     The Board of Directors may hold regular or special meetings in or out of the Commonwealth of Virginia.
3.08 Regular Meetings
     Unless the Articles of Incorporation provide otherwise, regular meetings of the Board of Directors may be held, without notice of the date, time, place, or purpose of the meeting, as may be designated from time to time by resolution of the Board.
3.09 Special Meetings — Call and Notice.
     (a) Special meetings of the Board of Directors may be called at any time by the Chairman of the Board or, if the Chairman is absent or unable or unwilling to act, the Chief Executive Officer, or if the Chief Executive Officer is absent or unwilling or unable to act, the President (if the President is a director) or the Secretary or three or more directors. Notice of any special meeting shall be given to each director at least 24 hours prior thereto either personally or by telephone, telegram or facsimile transmission, at least 48 hours prior to the meeting by overnight air courier, or at least five days prior thereto by mail, addressed to such director at his address as it appears in the records of the corporation. Such notice shall be deemed to be delivered when sent by facsimile transmission to the facsimile number of a director appearing in the corporation’s records, or when delivered to the telegraph company if sent by telegram, or when given to the air courier company, or when deposited in the United States mail so

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addressed, with postage thereon prepaid. The notice need not describe the purpose of the special meeting unless required by the Articles of Incorporation.
     (b) A director may waive any notice required by these Bylaws, the Articles of Incorporation, or law before or after the date and time stated in the notice for a meeting, and such waiver shall be equivalent to the giving of such notice. Except as provided in the next sentence, the waiver shall be in writing, signed by the director entitled to notice, and filed with the minutes or corporate records. A director’s attendance at or participation in a meeting waives any required notice to such director of the meeting, unless the director at the beginning of the meeting or promptly upon his arrival objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting.
3.10 Meetings by Telephone.
     Unless the Articles of Incorporation provide otherwise, the Board of Directors may permit any or all directors to participate in a regular or special meeting by, or conduct the meeting through the use of any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting.
3.11 Quorum; Vote.
     (a) Unless the Articles of Incorporation or these Bylaws require a greater number for the transaction of all business or any particular business, a quorum of a Board of Directors consists of a majority of the number of directors prescribed by the Articles of Incorporation or these Bylaws as constituting the size of the Board of Directors. If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the Board of Directors unless the Articles of Incorporation require the vote of a greater number of directors.
     (b) Notwithstanding the provisions of Section 3.11(a), the affirmative vote of a majority of the entire Board of Directors shall be required to: (i) amend the Articles of Incorporation or these Bylaws; (ii) adopt a plan of liquidation or dissolution of the corporation; (iii) approve any merger, consolidation or other business combination of the corporation or any of its subsidiaries with any person (other than a wholly owned subsidiary of the corporation), or any acquisition or disposition by the corporation or any of its subsidiaries of assets or businesses (in one transaction or a series of transactions) which assets or businesses have an aggregate market value equal to 10% or more of either (A) the aggregate market value of all the corporation’s assets prior to the consummation of the proposed transaction determined on a consolidated basis, or (B) 10% of the aggregate market value of all the outstanding capital stock of the corporation, (iv) issue any shares of capital stock or other securities of the corporation or options, warrants or other rights to acquire capital stock or securities convertible into or exchangeable for capital stock of the corporation (other than as approved by the Compensation Committee); and (v) engage in any line of business from which the corporation would derive material revenue or make a material investment or incur material liabilities other than (A) businesses in which the corporation is engaged on the effective date of the plan of reorganization of NVR L.P. and (B) other homebuilding or related financial services businesses, including any financial services businesses related to mortgage origination, mortgage servicing or residential real estate financing. Approval by the corporation, as shareholder, of any action taken by a subsidiary of the corporation of the type described in clause (iii) shall require prior approval by a majority of the entire Board of Directors.
3.12 Presumption of Assent.

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     A director who is present at a meeting of the Board of Directors when corporate action is taken is deemed to have assented to the action taken unless (i) he objects at the beginning of the meeting, or promptly upon his arrival, to holding it or transacting specified business at the meeting, or (ii) he votes against, or abstains from, the action taken.
3.13 Board Action Without a Meeting.
     Unless the Articles of Incorporation provide otherwise, action required or permitted by law to be taken at a meeting of the Board of Directors may be taken without a meeting if the action is taken by all members of the Board. The action shall be evidenced by one or more written consents stating the action taken, signed by each director either before or after the action taken, and included in the minutes or filed with the corporate records reflecting the action taken. Action taken under this Section 3.13 is effective when the last director signs the consent unless the consent specifies a different effective date, in which event the action taken is effective as of the date specified therein provided the consent states the date of execution by each director. A consent signed under this Section 3.13 has the effect of a meeting vote and may be described as such in any document.
3.14 Advisors.
     The Board of Directors may designate, from time to time, individuals who will be retained by the corporation as advisors to the Board of Directors. Advisors to the Board of Directors will have such duties and compensation as may be determined by the Board of Directors and set forth in separate advisory agreements. Advisors to the Board of Directors shall be subject to the same policies regarding corporation opportunities, conflicts of interest, confidentiality, securities trading and affiliate transactions as applicable to directors, and advisors shall be entitled to the same indemnification from the corporation as directors.
3.15 Compensation.
     Unless the Articles of Incorporation provide otherwise, the Board of Directors may fix the compensation of directors, advisors and members of committees and may provide for reimbursements for expenses. No such compensation shall preclude any director or advisor from serving the corporation in any other capacity and receiving compensation therefor.
ARTICLE IV
COMMITTEES
4.01 Standing Committees.
     (a) The Board of Directors shall have four standing committees: an Audit Committee, a Compensation Committee, a Nominating Committee and an Executive Committee. Each standing committee shall have not less than four members, who will be appointed by a majority of the entire Board of Directors. Each member of the Audit, Compensation and Nominating Committees shall be an independent director.

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     (b) Compensation Committee.
          The Compensation Committee shall have such powers, authority and responsibilities as may be determined by a majority of the entire Board of Directors.
     (c) Nominating Committee.
          The Nominating Committee shall have such powers, authority and responsibilities as may be determined by a majority of the entire Board of Directors.
     (d) Executive Committee.
          The Executive Committee shall have such powers, authority and responsibilities as may be determined by a majority of the entire Board of Directors.
4.02 Other Committees.
     Unless the Articles of Incorporation provide otherwise, the Board of Directors may create other committees and appoint members of the Board of Directors to serve on them. Each such other committee shall have three or more members, who will be appointed by a majority of the entire Board of Directors.
4.03 Committee Authority.
     (a) The creation of a committee, the appointment of its members and the determination of its functions and duties shall be approved by a majority of the entire Board of Directors. Board or committee members shall have the right to request and receive such information, reports and/or backup data from employees of the corporation or the corporation’s auditors, as the case may be, as they deem necessary to assist them in the conduct of their duties, and any committee shall have the right upon the affirmative vote of the majority of the entire Board of Directors to retain such advisors and consultants as it deems necessary or appropriate to assist the members in carrying out the committee’s responsibilities.
     (b) To the extent specified by the Board of Directors or in the Articles of Incorporation, each committee may exercise the authority of the Board of Directors, except that a committee may not: (i) approve or recommend to shareholders action that is required by law to be approved by shareholders; (ii) fill vacancies on the Board or on any of its committees; (iii) amend the Articles of Incorporation; (iv) adopt, amend, or appeal these Bylaws; (v) approve a plan of merger not requiring shareholder approval; (vi) authorize or approve a distribution or dividend; (vii) authorize or approve the issuance or sale or contract for sale of shares, or determine the designation and relative rights, preferences, and limitations of a class or series of shares, except that the Board of Directors may authorize a committee, or a senior executive officer of the corporation, to do so within limits specifically prescribed by the Board of Directors; or (viii) take any other action that is not permitted to be taken by a committee under applicable law.
4.04 Conduct of Meetings.
     Each committee referred to or provided for in these Bylaws shall have authority, except as may otherwise be required by law or by resolutions of the Board of Directors, to fix its own rules of procedure and to meet where and as provided by such rules;provided,however, not less than a majority in number of the designated members of any committee shall be required to constitute a quorum for any committee meeting, and where a quorum is present, the affirmative vote of a majority of the directors present at any committee meeting shall be required to approve any action taken by the committee.

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ARTICLE V
OFFICERS
5.01 Required Officers; Other Officers.
     The corporation shall have a President and a Secretary and may have such other officers as are appointed by the Board of Directors or by other officers authorized by the Board to appoint additional officers. Each officer shall perform the duties prescribed by the Board of Directors or by direction of an officer authorized by the Board of Directors to prescribe the duties of other officers. The Board may appoint a Chairman of the Board and, if the Board so designates, the Chairman of the Board may be an officer of the corporation. The same individual may simultaneously hold more than one office.
5.02 Appointment and Term of Office.
     Each officer of the corporation shall be appointed by the Board of Directors, or by another officer authorized by the Board to appoint additional officers, and shall serve at the pleasure of the Board of Directors or such other officer and until his successor shall have been chosen and qualified, or until his earlier death, resignation or removal. Appointment of an officer shall not of itself create any contractual rights of the officer or the corporation.
5.03 Resignation and Removal of Officers.
     An officer may resign at any time by delivering notice to the corporation. A resignation is effective when the notice is delivered unless the notice specifies a later effective date. If a resignation is made effective at a later date and the corporation accepts the future date, the Board of Directors may fill the pending vacancy before the effective date if the successor does not take office until the effective date. The Board of Directors may remove any officer at any time with or without cause and any officer or assistant officer, if appointed by another officer, may likewise be removed by such officer.
5.04 Compensation of Officers.
     The Compensation Committee may fix the compensation of officers and provide for reimbursement of expenses.
ARTICLE VI
SHARE PROVISIONS
6.01 Issuance of Shares.
     Any issuances of shares must be authorized by the Board of Directors. Shares may be issued for consideration consisting of any tangible or intangible property or benefit to the corporation, including cash, promissory notes, services performed, contracts for services to be performed, or other securities of the corporation. A good faith determination by the Board of Directors that the consideration received or to be received for the shares to be issued is adequate is conclusive insofar as the adequacy of consideration relates to whether the shares are validly issued, fully paid and nonassessable. When the Board of Directors has made such a determination and the corporation has received the consideration, the shares issued therefore are fully paid and nonassessable. Where it cannot be determined that outstanding shares are fully paid and nonassessable, there shall be a conclusive presumption that such shares are fully paid and nonassessable if the Board of Directors makes a good faith determination that there is no substantial evidence that the full consideration for such shares has not been paid.

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6.02 Liability for Shares Issued before Payment.
     A purchaser of shares from the corporation is not liable to the corporation with respect to the shares except to pay the consideration for which the shares were authorized to be issued as provided in Section 6.01.
6.03 Certificates Evidencing Shares.
     Every owner of stock of the corporation shall be entitled to have a certificate or certificates, to be in such form as the Board shall prescribe consistent with these Bylaws and applicable law, certifying the number and class or series of shares of the stock of the corporation owned by such person. Each share certificate shall state on its face (i) the name of the corporation and that the corporation is organized under the law of the Commonwealth of Virginia, (ii) the name of the person to whom such shares are issued, and (iii) the number and class of shares and the designation of the series, if any, that the certificate represents. If the corporation is authorized to issue different classes of shares or different series within a class, the designations, relative rights, preferences, and limitations applicable to each class and the variations and rights, preferences, and limitations determined for each series (and the authority of the Board of Directors to determine variations for future series) shall be summarized on the front or back of each certificate for shares of such class or series. Alternatively, each certificate may state conspicuously on its front or back that the corporation will furnish the shareholder this information on request in writing and without charge. Each share certificate shall be signed (i) by the Treasurer or Assistant Treasurer and (ii) by the Secretary or Assistant Secretary and may bear the corporate seal or its facsimile. The signatures on any certificates may be by facsimile.
6.04 Transfers of Stock.
     Transfers of shares of stock of the corporation shall be made only on the books of the corporation by the registered holder thereof, or by such holder’s attorney authorized to make such transfer by a power of attorney duly executed and filed with the Secretary, or with the transfer agent appointed as provided in Section 6.05 hereof, and upon surrender of the certificate or certificates for such shares properly endorsed and payment of all taxes thereon. The person in whose name shares of stock stand on the books of the corporation shall be deemed the owner thereof for all purposes as regards the corporation. Whenever any transfer of shares shall be made for collateral security, and not absolutely, such fact shall be so expressed in the entry of transfer if, when the certificate or certificates shall be presented to the corporation for transfer, both the transferor and the transferee request the corporation to do so.
6.05 Regulations.
     The Board may make such rules and regulations as it may deem expedient, not inconsistent with these Bylaws or applicable law, concerning the issue, transfer, and registration of certificates for shares of the stock of the corporation. It may appoint, or authorize any officer or officers to appoint, one or more transfer agents and one or more registrars, and may require all certificates for stock to bear the signature or signatures of any of them.
6.06 Lost, Stolen, Destroyed, or Mutilated Certificates.
     In any case of loss, theft, destruction, or mutilation of any certificate of stock, another may be issued in its place, upon the making of an affidavit of that fact by the person claiming the certificates for shares to be lost, stolen, destroyed, or mutilated and upon the giving of a bond of indemnity to the corporation in such form and amount as the Board, or any officer or agent authorized by the Board, may direct. A new certificate may be issued without requiring any bond when, in the judgment of the Board or such officer or agent, it is proper to do so.

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ARTICLE VII
MISCELLANEOUS
7.01 Corporate Records.
     The corporation shall keep as permanent records minutes of all meetings of the shareholders and the Board of Directors, a record of all actions taken by the shareholders or the Board of Directors without a meeting and a record of all actions taken by a committee of the Board of the Directors in place of the Board of Directors on behalf of the corporation. The corporation shall maintain appropriate accounting records. The corporation or its agent shall maintain a record of the shareholders, in a form that permits preparation of a list of names and addresses of all shareholders, in alphabetical order by class and series, if any, of shares showing the number and class and series, if any, of shares held by each. The corporation also shall keep a copy of those additional records required by Section 13.1-770 of the Virginia Stock Corporation Act.
7.02 Corporate Seal.
     The corporation may elect to have a corporate seal. The seal of the corporation, if any, shall have inscribed thereon the name of the corporation, the year of its organization, and the words “Corporate Seal” and “Virginia,” and shall be in such form as shall be approved from time to time by the Board of Directors. The seal, or a facsimile of it, may be used by impressing or affixing it or in any other manner reproducing it.
7.03 Fiscal Year.
     The fiscal year of the corporation shall be fixed by resolution of the Board of Directors.
7.04 Contracts, Checks, Notes and Drafts.
     The Board, except as may be otherwise provided in these Bylaws, may authorize any officer or officers, or agent or agents, to enter into any contract or execute any instrument in the name and on behalf of the corporation. Such authority may be general or confirmed to specific instances. Checks, notes, drafts, and other orders for the payment of money shall be signed by such person or persons as the Board of Directors may from time to time designate. The signature of any such person or persons may be a facsimile when authorized by the Board of Directors.
7.05 Transactions with Affiliates.
     The corporation shall not enter into any contract or other transaction with any director, officer, holder of 5% or more of the voting stock of the corporation or any of its subsidiaries, or any business entity (other than direct or indirect wholly owned subsidiaries of the corporation) in which any such person is a director, officer, or holder of 10% or more of the equity interests, unless the contract or other transaction is approved or ratified by a majority of the directors of the corporation who do not have any personal interest in the transaction after disclosure of such relationship or interest.

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ARTICLE VIII
AMENDMENT OF BYLAWS
     These Bylaws may be amended or repealed or new Bylaws may be adopted (a) by the shareholders at any annual or special meeting, if the notice thereof states that amendment or repeal or the adoption of new Bylaws is one of the purposes of such meeting, or (b) by the affirmative vote of a majority of the entire Board of Directors, provided that the affirmative vote of holders of a majority of the outstanding shares of the corporation will be necessary to amend Sections 3.02, 3.11, 4.01, 7.05 and this Article VIII of these Bylaws.
Adopted by the Board of Directors on
September 30, 1993, amended by the
shareholders and the Board of Directors on
November 2, 2005, and further amended by the
Board of Directors on May 4, 2007.

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Appendix D
NVR, INC.
2010 EQUITY INCENTIVE PLAN

TABLE OF CONTENTS
       
    Page 
 
1.    PURPOSE  1 
2.    DEFINITIONS  1 
3.    ADMINISTRATION OF THE PLAN  4 
3.1. Board  4 
3.2. Committee  4 
3.3. Terms of Awards  5 
3.4. No Repricing  6 
3.5. No Liability  6 
3.6. Share Issuance/Book-Entry  6 
4.    STOCK SUBJECT TO THE PLAN  6 
4.1. Number of Shares Available for Awards  6 
4.2. Share Usage  6 
5.    EFFECTIVE DATE, DURATION AND AMENDMENTS  7 
5.1. Effective Date  7 
5.2. Term  7 
5.3. Amendment and Termination of the Plan  7 
6.    AWARD ELIGIBILITY AND LIMITATIONS  7 
6.1. Service Providers and Other Persons  7 
6.2. Limitation on Shares Subject to Stock Option Awards  7 
6.3. Successive Awards  7 
7.    AWARD AGREEMENT  8 
8.    TERMS AND CONDITIONS OF OPTIONS  8 
8.1. Option Price  8 
8.2. Vesting  8 
8.3. Term  8 
8.4. Termination of Service  8 
8.5. Limitations on Exercise of Option  8 
8.6. Method of Exercise  9 
8.7. Rights of Holders of Options  9 
8.8. Delivery of Stock Certificates  9 
8.9. Transferability of Options  9 
9.    TERMS AND CONDITIONS OF RESTRICTED SHARE UNITS  9 
9.1. Grant of Restricted Share Units  9 
9.2. Restrictions  9 
9.3. Rights of Holders of Restricted Share Units  10 
  9.3.1.   No Stockholder Rights  10 
  9.3.2.   Creditor’s Rights  10 
9.4. Termination of Service  10 
9.5. Delivery of Stock  10 
10.    FORM OF PAYMENT FOR OPTIONS  10 
10.1. General Rule  10 
10.2. Surrender of Stock  11 

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    Page 
 
10.3. Cashless Exercise  11 
10.4. Other Forms of Payment  11 
11.    PARACHUTE LIMITATIONS  11 
12.    REQUIREMENTS OF LAW  12 
12.1. General  12 
12.2. Rule 16b-3  12 
13.    EFFECT OF CHANGES IN CAPITALIZATION  13 
13.1. Changes in Stock  13 
13.2. Reorganization in Which the Company Is the Surviving Entity Which does not Constitute a Corporate Transaction  13 
13.3. Corporate Transaction in which Awards are not Assumed  14 
13.4. Corporation Transaction in which Awards are Assumed  14 
13.5. Adjustments  14 
13.6. No Limitations on Company  15 
14.    GENERAL PROVISIONS  15 
14.1. Disclaimer of Rights  15 
14.2. Nonexclusivity of the Plan  15 
14.3. Withholding Taxes  15 
14.4. Captions  16 
14.5. Other Provisions  16 
14.6. Number and Gender  16 
14.7. Severability  16 
14.8. Governing Law  16 
14.9. Code Section 409A  16 

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NVR, INC.
2010 EQUITY INCENTIVE PLAN
     NVR, Inc., a Virginia corporation, sets forth herein the terms of its 2010 Equity Incentive Plan, as follows:
1. PURPOSE
     The Plan is intended to enhance the Company’s and its Affiliates’ (as defined herein) ability to attract and retain highly qualified officers, directors, and key employees and to motivate such persons to serve the Company and its Affiliates and to expend maximum effort to improve the business results and earnings of the Company, by providing to such persons an opportunity to acquire or increase a direct proprietary interest in the operations and future success of the Company. To this end, the Plan provides for the grant of stock options and restricted share units. Any of these awards may, but need not, be made as performance incentives to reward attainment of long-term performance goals in accordance with the terms hereof. Stock options granted under the Plan will be non-qualified stock options, as provided herein.
2. DEFINITIONS
     For purposes of interpreting the Plan and related documents (including Award Agreements), the following definitions shall apply:
     2.1“Affiliate”means, with respect to the Company, any company or other trade or business that controls, is controlled by or is under common control with the Company within the meaning of Rule 405 of Regulation C under the Securities Act, including, without limitation, any Subsidiary. For purposes of granting stock options, an entity may not be considered an Affiliate unless the Company holds a “controlling interest” in such entity, where the term “controlling interest” has the same meaning as provided in Treasury Regulation Section 1.414(c)-2(b)(2)(i), provided that the language “at least 50 percent” is used instead of “at least 80 percent” and, provided further, that where granting of stock options is based upon a legitimate business criteria, the language “at least 20 percent” is used instead of “at least 80 percent” each place it appears in Treasury Regulation Section 1.414(c)-2(b)(2)(i).
     2.2“Applicable Laws”means the legal requirements relating to the Plan and the Awards under applicable provisions of the corporate, securities, tax and other laws, rules, regulations and government orders, and the rules of any applicable stock exchange or national market system, of any jurisdiction applicable to Awards granted to residents therein.
     2.3“Award”means a grant of an Option or Restricted Share Units under the Plan.
     2.4“Award Agreement”means the agreement between the Company and a Grantee that evidences and sets out the terms and conditions of an Award.

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     2.5“Benefit Arrangement”shall have the meaning set forth inSection 11hereof
     2.6“Board”means the Board of Directors of the Company.
     2.7“Cause”means, as determined by the Board and unless otherwise provided in an applicable agreement with the Company or any Affiliate, (i) conviction of a felony, violation of any federal or state securities law, or other crime involving moral turpitude; (ii) gross misconduct in connection with the performance of such Grantee’s duties (which shall include a breach of such Grantee’s fiduciary duty of loyalty); or (iii) a material breach of any covenants by the Grantee contained in any agreement between Grantee and the Company or its affiliates.
     2.8“Code”means the Internal Revenue Code of 1986, as now in effect or as hereafter amended.
     2.9“Committee”means the Compensation Committee of the Board which shall consist of two or more Outside Directors of the Company who (a) meet such other requirements as may be established from time to time by the Securities and Exchange Commission for plans intended to qualify for exemption under Rule 16b-3 (or its successor) under the Exchange Act and who (b) comply with the independence requirements of the stock exchange on which the Common Stock is listed.
     2.10“Company”means NVR, Inc., a Virginia corporation.
     2.11“Corporate Transaction”means (i) the dissolution or liquidation of the Company or a merger, consolidation, or reorganization of the Company with one or more other entities in which the Company is not the surviving entity, (ii) a sale of substantially all of the assets of the Company to another person or entity, or (iii) any transaction or series of transaction (including without limitation a merger or reorganization in which the Company is the surviving entity) which results in any person or entity (other than persons who are stockholders or affiliates immediately prior to the transaction) owning 50% or more of the combined voting power of all classes of stock of the Company.
     2.12“Disability”means the Grantee is unable to perform each of the essential duties of such Grantee’s position by reason of a medically determinable physical or mental impairment which is potentially permanent in character or which can be expected to last for a continuous period of not less than 12 months.
     2.13“Effective Date”means the date the Plan was approved by the stockholders.
     2.14“Exchange Act”means the Securities Exchange Act of 1934, as now in effect or as hereafter amended.
     2.15“Fair Market Value”means the value of a share of Stock, determined as follows: if on the Grant Date the shares of Stock are listed on an established national or regional stock exchange, or are publicly traded on an established securities market, the Fair Market Value of a share of Stock shall be the closing price of the Stock on such exchange or in such market (if there is more than one such exchange or market the

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Committee shall determine the appropriate exchange or market) on the last trading day immediately preceding the date of grant. If there is no such reported closing price on the applicable date as specified in the immediately preceding sentence, the Fair Market Value shall be the mean between the highest bid and lowest asked prices or between the high and low sale prices on the applicable date as specified in the immediately preceding sentence. If on the Grant Date the Stock is not listed on such an exchange or traded on such a market, Fair Market Value shall be the value of the Stock as determined by the Committee by the reasonable application of a reasonable valuation method, in a manner consistent with Code Section 409A. For purposes of determining taxable income and the amount of the related tax withholding obligation underSection 14.3, notwithstanding thisSection 2.14orSection 14.3, for any shares of Stock that are sold on the same day that such shares are first legally saleable pursuant to the terms of the applicable award agreement (which for an option is the date of exercise), Fair Market Value shall be determined based upon the sale price of such shares so long as the grantee has provided the Company with advance written notice of such sale.
     2.16“Grant Date”means, as determined by the Committee, the latest to occur of (i) the date as of which the Company completes the corporate action constituting the Award, (ii) the date on which the recipient of an Award first becomes eligible to receive an Award underSection 6hereof, or (iii) such other date as may be specified by the Committee.
     2.17“Grantee”means a person who receives or holds an Award under the Plan.
     2.18“Non-qualified Stock Option”means an Option that is not an incentive stock option within the meaning of Code Section 422.
     2.19“Option”means an option to purchase one or more shares of Stock pursuant to the Plan.
     2.20“Option Price”means the exercise price for each share of Stock subject to an Option.
     2.21“Other Agreement”shall have the meaning set forth inSection 11hereof.
     2.22“Outside Director”means a member of the Board who is not an officer or employee of the Company.
     2.23“Plan”means this NVR, Inc. 2010 Equity Incentive Plan.
     2.24“Reporting Person”means a person who is required to file reports under Section 16(a) of the Exchange Act.
     2.25“Securities Act”means the Securities Act of 1933, as now in effect or as hereafter amended.
     2.26“Service”means service as a Service Provider to the Company or any Affiliate. Unless otherwise stated in the applicable Award Agreement, a Grantee’s change in position or duties shall not result in interrupted or terminated Service, so long as such Grantee continues to be a Service Provider to the Company or any Affiliate. Subject to the preceding sentence, whether a termination of Service shall have occurred for purposes of

3

the Plan shall be determined by the Committee, which determination shall be final, binding and conclusive.
     2.27“Service Provider”means an employee, officer or director of the Company or any Affiliate, currently providing services to the Company or any Affiliate.
     2.28“Stock”means the shares of common stock, par value $0.01 per share, of the Company.
     2.29“Restricted Share Units”means a bookkeeping entry representing the equivalent of one share of Stock awarded to a Grantee pursuant toSection 9hereof.
     2.30“Subsidiary”means any “subsidiary corporation” of the Company within the meaning of Code Section 424(f).
3. ADMINISTRATION OFCONTINUED AND TO BE SIGNED ON THE PLAN
3.1. Board.
     The Board shall have such powers and authorities related to the administration of the Plan as are consistent with the Company’s certificate of incorporation and by-laws and Applicable Laws. The Board shall have full power and authority to take all actions and to make all determinations required or provided for under the Plan, any Award or any Award Agreement, and shall have full power and authority to take all such other actions and make all such other determinations not inconsistent with the specific terms and provisions of the Plan that the Board deems to be necessary or appropriate to the administration of the Plan, any Award or any Award Agreement. All such actions and determinations shall be by the affirmative vote of a majority of the members of the Board present at a meeting or by unanimous consent of the Board executed in writing in accordance with the Company’s certificate of incorporation and by-laws and Applicable Laws. The interpretation and construction by the Board of any provision of the Plan, any Award or any Award Agreement shall be final, binding and conclusive.
3.2. Committee.
     The Board hereby delegates to the Committee such powers and authorities related to the administration and implementation of the Plan, as set forth inSection 3.1above and other applicable provisions, as the Board shall determine, consistent with the certificate of incorporation and by-laws of the Company and Applicable Laws. The Board or Committee may also appoint one or more separate committees of the Board, each composed of one or more directors of the Company who need not be Outside Directors, or a committee composed of one or more officers of the Company who are not directors, who may administer the Plan with respect to employees or other Service Providers who are not executive officers (as defined under Rule 3b-7 of the Exchange Act) or directors of the Company, may grant Awards under the Plan to such employees or other Service Providers, and may determine all terms of such Awards, subject to the requirements of Rule 16b-3 and the rules of the New York Stock Exchange.
     In the event that the Plan, any Award or any Award Agreement entered into hereunder provides for any action to be taken by or determination to be made by the Board,

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such action may be taken or such determination may be made by the Committee. Unless otherwise expressly determined by the Board, any such action or determination by the Committee shall be final, binding and conclusive. To the extent permitted by law, the Committee may delegate its authority under the Plan to a member of the Board.
3.3. Terms of Awards.
     Subject to the other terms and conditions of the Plan, the Committee or the committee designated pursuant to Section 3.2(ii), shall have full and final authority to:
     (i) designate Grantees,
     (ii) determine the type or types of Awards to be made to a Grantee,
     (iii) determine the number of shares of Stock to be subject to an Award,
     (iv) establish the terms and conditions of each Award (including, but not limited to, the nature and duration of any restriction or condition (or provision for lapse thereof) relating to the vesting, exercise, transfer, or forfeiture of an Award or the shares of Stock subject thereto,
     (v) prescribe the form of each Award Agreement evidencing an Award, and
     (vi) amend, modify, or supplement the terms of any outstanding Award. Such authority specifically includes the authority, in order to effectuate the purposes of the Plan but without amending the Plan. Notwithstanding the foregoing, no amendment, modification or supplement of any Award shall, without the consent of the Grantee, impair the Grantee’s rights under such Award.
     The Committee may retain the right in an Award Agreement to cause a forfeiture of the gain realized by a Grantee on account of actions taken by the Grantee in violation or breach of or in conflict with any non-competition agreement, any agreement prohibiting solicitation of employees of the Company or any Affiliate thereof or any confidentiality obligation with respect to the Company or any Affiliate thereof, to the extent specified in such Award Agreement applicable to the Grantee. Furthermore, the Company may annul an Award if the Grantee is an employee of the Company or any Affiliate thereof and is terminated for Cause as defined in the applicable Award Agreement or the Plan or any other agreement with the Grantee, as applicable.
     Furthermore, if the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 and any Grantee who knowingly engaged in the misconduct, was grossly negligent in engaging in the misconduct, knowingly failed to prevent the misconduct or was grossly negligent in failing to prevent the misconduct, shall reimburse the Company the amount of any payment in settlement of an Award earned or accrued during the twelve (12) month period following the first public issuance or filing with the United States Securities and Exchange Commission (whichever first occurred) of the financial document that contained such material noncompliance.

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3.4. No Repricing.
     Notwithstanding anything in this Plan to the contrary, the Committee shall not have the authority, without stockholder approval, (A) to cancel, exchange, substitute, buyout or surrender such outstanding Options in exchange for cash, other Awards or Options with an Option Price that is less than the Option Price of the original Option, (B) to reduce the exercise price of any outstanding Option, or (C) to take any other action that would be treated as a repricing under the rules of the stock exchange on which the Stock is listed; provided, that appropriate adjustments shall be made to outstanding Options pursuant toSection 13.
3.5. No Liability.
     No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Award or Award Agreement.
3.6. Share Issuance/Book-Entry.
     Notwithstanding any provision of this Plan to the contrary, the issuance of the Stock under the Plan may be evidenced in such a manner as the Committee, in its discretion, deems appropriate, including, without limitation, book-entry registration or issuance of one or more Stock certificates.
4. STOCK SUBJECT TO THE PLAN
4.1. Number of Shares Available for Awards.
     Subject to adjustment as provided inSection 13hereof, the number of shares of Stock available for issuance under the Plan shall be seven hundred thousand (700,000), of which no more than two hundred forty thousand (240,000) can be issued as Restricted Share Units. Stock issued or to be issued under the Plan shall be authorized but unissued shares; or, to the extent permitted by Applicable Laws, issued shares that have been reacquired by the Company.
4.2. Share Usage.
     Shares covered by an Award shall be counted as used as of the Grant Date. Any shares of Stock that are subject to Options or Restricted Share Units shall be counted against the limit set forth inSection 4.1as one (1) share for every one (1) share subject to an Award. If any shares covered by an Award granted under the Plan are not purchased or are forfeited or expire, or if an Award otherwise terminates without delivery of any Stock subject thereto, then the number of shares of Stock counted against the aggregate number of shares available under the Plan with respect to such Award shall, to the extent of any such forfeiture, termination or expiration, again be available for making Awards under the Plan in the same amount as such shares were counted against the limit set forth inSection 4.1. The number of shares of Stock available for issuance under the Plan shall not be increased by any shares of Stock purchased by the Company with proceeds from option exercises.

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5. EFFECTIVE DATE, DURATION AND AMENDMENTS
5.1. Effective Date.
     The Plan shall be effective as of the Effective Date, subject to approval of the Plan by the Company’s stockholders.
5.2. Term.
     The Plan shall terminate automatically ten (10) years after the Effective Date and may be terminated on any earlier date as provided inSection 5.3.
5.3. Amendment and Termination of the Plan.
     The Committee may, at any time and from time to time, amend, suspend, or terminate the Plan as to any shares of Stock as to which Awards have not been made. An amendment shall be contingent on approval of the Company’s stockholders to the extent stated by the Committee, required by Applicable Laws or required by applicable stock exchange listing requirements. No amendment will be made to the no-repricing provisions ofSection 3.4or the option pricing provisions ofSection 8.1without the approval of the Company’s stockholders. No amendment, suspension, or termination of the Plan shall, without the consent of the Grantee, impair rights or obligations under any Award theretofore awarded under the Plan.
6. AWARD ELIGIBILITY AND LIMITATIONS
6.1. Service Providers and Other Persons.
     Subject to thisSection 6, Awards may be made under the Plan to any Service Provider, as the Committee shall determine and designate from time to time.
6.2. Limitation on Shares Subject to Stock Option Awards.
     The maximum number of shares of Stock subject to Options that can be awarded under the Plan to any person eligible for an Award underSection 6hereof is one hundred shares (100,000) per calendar year.
6.3. Successive Awards.
     An eligible person may receive more than one Award, subject to such restrictions as are provided herein.
7. AWARD AGREEMENT
     Each Award granted pursuant to the Plan shall be evidenced by an Award Agreement, in such form or forms as the Committee shall from time to time determine. Award Agreements granted from time to time or at the same time need not contain similar

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provisions but shall be consistent with the terms of the Plan. Each Award Agreement evidencing an Award of Options shall specify that such Options are intended to be Non-qualified Stock Options.
8. TERMS AND CONDITIONS OF OPTIONS
8.1. Option Price.
     The Option Price of each Option shall be fixed as the Fair Market Value on the date of grant and stated in the Award Agreement evidencing such Option.
8.2. Vesting.
     Subject toSections 8.3 and 13.3hereof, each Option granted under the Plan shall become exercisable at such times and under such conditions as shall be determined by the Committee and stated in the Award Agreement provided no option can vest prior to December 31, 2013 except in connection with a death, Disability or Corporate Transaction. For purposes of thisSection 8.2, fractional numbers of shares of Stock subject to an Option shall be rounded down to the next nearest whole number.
8.3. Term.
     Each Option granted under the Plan shall terminate, and all rights to purchase shares of Stock thereunder shall cease, upon the expiration of ten years from the date such Option is granted, or under such circumstances and on such date prior thereto as is set forth in the Plan or as may be fixed by the Committee and stated in the Award Agreement relating to such Option.
8.4. Termination of Service.
     Each Award Agreement shall set forth the extent to which the Grantee shall have the right to exercise the Option following termination of the Grantee’s Service. Such provisions shall be determined in the sole discretion of the Committee, need not be uniform among all Options issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of Service.
8.5. Limitations on Exercise of Option.
     Notwithstanding any other provision of the Plan, in no event may any Option be exercised, in whole or in part, prior to the date the Plan is approved by the stockholders of the Company as provided herein or after the occurrence of an event referred to inSection 13hereof which results in termination of the Option.
8.6. Method of Exercise.
     Subject to the terms ofSection 10andSection 13.3, an Option that is exercisable may be exercised by the Grantee’s delivery to the Company of notice of exercise on any business day, at the Company’s principal office, on the form specified by the Company and in accordance with any additional procedures specified by the Committee. Such notice shall specify the number of shares of Stock with respect to which the Option is being exercised and

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shall be accompanied by payment in full of the Option Price of the shares of Stock for which the Option is being exercised plus the amount (if any) of federal and/or other taxes which the Company may, in its judgment, be required to withhold with respect to an Award.
8.7. Rights of Holders of Options.
     Unless otherwise stated in the applicable Award Agreement, an individual holding or entity exercising an Option shall have none of the rights of a stockholder (for example, the right to receive cash or dividend payments or distributions attributable to the subject shares of Stock or to direct the voting of the subject shares of Stock) until the shares of Stock covered thereby are fully paid and issued to him. Except as provided inSection 13hereof, no adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date of such issuance.
8.8. Delivery of Stock Certificates.
     Promptly after the exercise of an Option by a Grantee and the payment in full of the Option Price, such Grantee shall be entitled to the issuance of a stock certificate or certificates evidencing his or her ownership of the shares of Stock subject to the Option.
8.9. Transferability of Options.
     During the lifetime of a Grantee, only the Grantee (or, in the event of legal incapacity or incompetency, the Grantee’s guardian or legal representative) may exercise an Option. No Option shall be assignable or transferable by the Grantee to whom it is granted, other than by will or the laws of descent and distribution.
9. TERMS AND CONDITIONS OF RESTRICTED SHARE UNITS
9.1. Grant of Restricted Share Units
     Awards of Restricted Share Units may be made for no consideration (other than par value of the shares which is deemed paid by Services already rendered).
9.2. Restrictions
     At the time a grant of Restricted Share Units is made, the Committee may, in its sole discretion, establish a period of time (a “restricted period”) applicable to such Restricted Share Units. Each Award of Restricted Share Units may be subject to a different restricted period, provided, however, that no Restricted Share Unit can vest prior to December 31, 2011. The Committee may in its sole discretion, at the time a grant of Restricted Share Units is made, prescribe restrictions in addition to or other than the expiration of the restricted period, including the satisfaction of corporate or individual performance objectives, which may be applicable to all or any portion of the Restricted Share Units. No Restricted Share Units may be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the restricted period or prior to the satisfaction of any other restrictions prescribed by the Committee with respect to such Restricted Share Units.

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9.3. Rights of Holders of Restricted Share Units
9.3.1. No Stockholder Rights
          Holders of Restricted Share Units shall have no rights as stockholders of the Company.
9.3.2. Creditor’s Rights
          A holder of Restricted Share Units shall have no rights other than those of a general creditor of the Company. Restricted Share Units represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Award Agreement.
9.4. Termination of Service
     Unless the Committee otherwise provides in an Award Agreement or in writing after the Award Agreement is issued, upon the termination of a Grantee’s Service, any Restricted Share Units held by such Grantee that have not vested, or with respect to which all applicable restrictions and conditions have not lapsed, shall immediately be deemed forfeited. Upon forfeiture of Restricted Share Units, the Grantee shall have no further rights with respect to such Award.
9.5. Delivery of Stock
     Upon the expiration or termination of any restricted period and the satisfaction of any other conditions prescribed by the Committee, the restrictions applicable to Restricted Share Units settled in Stock shall lapse, and, unless otherwise provided in the Award Agreement, a stock certificate for such shares shall be delivered, free of all such restrictions, to the Grantee or the Grantee’s beneficiary or estate, as the case may be. Neither the Grantee, nor the Grantee’s beneficiary or estate, shall have any further rights with regard to a Restricted Share Unit once the share of Stock represented by the Restricted Share Unit has been delivered.
10. FORM OF PAYMENT FOR OPTIONS
10.1. General Rule.
     Payment of the Option Price for the shares purchased pursuant to the exercise of an Option shall be made in cash or in cash equivalents acceptable to the Company.
10.2. Surrender of Stock.
     To the extent the Award Agreement so provides, payment of the Option Price for shares purchased pursuant to the exercise of an Option may be made all or in part through the tender or attestation to the Company of shares of Stock, which shall be valued, for purposes of determining the extent to which the Option Price has been paid thereby, at their Fair Market Value on the date of exercise or surrender.

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10.3. Cashless Exercise.
     With respect to an Option only, to the extent permitted by law and to the extent the Award Agreement so provides, payment of the Option Price for shares purchased pursuant to the exercise of an Option may be made all or in part by delivery (on a form acceptable to the Committee) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell shares of Stock and to deliver all or part of the sales proceeds to the Company in payment of the Option Price and any withholding taxes described inSection 14.3, or, with the consent of the Company, by issuing the number of shares equal in value to the difference between the Option Price and the Fair Market Value of the shares subject to the portion of the Option being exercised.
10.4. Other Forms of Payment.
     To the extent the Award Agreement so provides and/or unless otherwise specified in an Award Agreement, payment of the Option Price for shares purchased pursuant to exercise of an Option may be made in any other form that is consistent with Applicable Laws, regulations and rules, including, without limitation, Service.
11. PARACHUTE LIMITATIONS
     If the Grantee is a “disqualified individual,” as defined in Code Section 280G(c), then, notwithstanding any other provision of this Plan or of any other agreement, contract, or understanding heretofore or hereafter entered into by a Grantee with an Applicable Entity, except an agreement, contract, or understanding that expressly addresses Code Section 280G or Code Section 4999 (an “Other Agreement”), and notwithstanding any formal or informal plan or other arrangement for the direct or indirect provision of compensation to the Grantee (including groups or classes of Grantees or beneficiaries of which the Grantee is a member), whether or not such compensation is deferred, is in cash, or is in the form of a benefit to or for the Grantee (a“Benefit Arrangement”), any right to exercise, vesting, payment or benefit to the Grantee under this Plan shall be reduced or eliminated:
     (i) to the extent that such right to exercise, vesting, payment, or benefit, taking into account all other rights, payments, or benefits to or for the Grantee under this Plan, all Other Agreements, and all Benefit Arrangements, would cause any exercise, vesting, payment or benefit to the Grantee under this Plan to be considered a “parachute payment” within the meaning of Code Section 280G(b)(2) as then in effect (a “Parachute Payment”); and
     (ii) if, as a result of receiving such Parachute Payment, the aggregate after-tax amounts received by the Grantee from the Company under this Plan, all Other Agreements, and all Benefit Arrangements would be less than the maximum after-tax amount that could be received by the Grantee without causing any such payment or benefit to be considered a Parachute Payment.
     The Company shall accomplish such reduction by first reducing or eliminating any cash payments (with the payments to be made furthest in the future being reduced first), then by reducing or eliminating any accelerated vesting of Options, then by reducing or

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eliminating any accelerated vesting of Restricted Stock, then by reducing or eliminating any other remaining Parachute Payments.
12. REQUIREMENTS OF LAW
12.1. General.
     The Company shall not be required to sell or issue any shares of Stock under any Award if the sale or issuance of such shares of Stock would constitute a violation by the Grantee, any other individual or entity exercising an Option, or the Company or an Affiliate of any provision of any law or regulation of any governmental authority, including without limitation any federal or state securities laws or regulations. If at any time the Company shall determine, in its discretion, that the listing, registration or qualification of any shares of Stock subject to an Award upon any securities exchange or under any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the issuance or purchase of shares of Stock hereunder, no shares of Stock may be issued or sold to the Grantee or any other individual or entity exercising an Option pursuant to such Award unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Company, and any delay caused thereby shall in no way affect the date of termination of the Award. Without limiting the generality of the foregoing, in connection with the Securities Act, upon the exercise of any Option or the delivery of any shares of Stock underlying an Award, unless a registration statement under such Act is in effect with respect to the shares of Stock covered by such Award, the Company shall not be required to sell or issue such shares of Stock unless the Committee has received evidence satisfactory to it that the Grantee or any other individual or entity exercising an Option may acquire such shares of Stock pursuant to an exemption from registration under the Securities Act. Any determination in this connection by the Committee shall be final, binding, and conclusive. The Company may, but shall in no event be obligated to, register any securities covered hereby pursuant to the Securities Act. The Company shall not be obligated to take any affirmative action in order to cause the exercise of an Option or the issuance of shares of Stock pursuant to the Plan to comply with any law or regulation of any governmental authority. As to any jurisdiction that expressly imposes the requirement that an Option shall not be exercisable until the shares of Stock covered by such Option are registered or are exempt from registration, the exercise of such Option under circumstances in which the laws of such jurisdiction apply shall be deemed conditioned upon the effectiveness of such registration or the availability of such an exemption.
12.2. Rule 16b-3.
     During any time when the Company has a class of equity security registered under Section 12 of the Exchange Act, it is the intent of the Company that Awards pursuant to the Plan and the exercise of Options granted hereunder that would otherwise be subject to Section 16(b) of the Exchange Act will qualify for the exemption provided by Rule 16b-3 under the Exchange Act. To the extent that any provision of the Plan or action by the Committee does not comply with the requirements of Rule 16b-3, it shall be deemed inoperative with respect to such Awards to the extent permitted by law and deemed advisable by the Committee, and shall not affect the validity of the Plan. In the event that Rule 16b-3 is revised or replaced, the Committee may exercise its discretion to modify this Plan in any

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respect necessary to satisfy the requirements of, or to take advantage of any features of, the revised exemption or its replacement.
13. EFFECT OF CHANGES IN CAPITALIZATION
13.1. Changes in Stock.
     If the number of outstanding shares of Stock is increased or decreased or the shares of Stock are changed into or exchanged for a different number or kind of stock or other securities of the Company on account of any recapitalization, reclassification, stock split, reverse split, combination of stock, exchange of stock, stock dividend or other distribution payable in capital stock, or other increase or decrease in such stock effected without receipt of consideration by the Company occurring after the Effective Date, the number and kinds of shares of stock for which grants of Options and Restricted Share Units may be made under the Plan shall be adjusted proportionately and accordingly by the Company. In addition, the number and kind of shares for which Awards are outstanding shall be adjusted proportionately and accordingly so that the proportionate interest of the Grantee immediately following such event shall, to the extent practicable, be the same as immediately before such event. Any such adjustment in outstanding Options shall not change the aggregate Option Price payable with respect to shares that are subject to the unexercised portion of an outstanding Option, but shall include a corresponding proportionate adjustment in the Option Price per share. The conversion of any convertible securities of the Company shall not be treated as an increase in shares effected without receipt of consideration. Notwithstanding the foregoing, in the event of any distribution to the Company’s stockholders of securities of any other entity or other assets (including an extraordinary dividend but excluding a non-extraordinary dividend of the Company) without receipt of consideration by the Company, the Company shall, in such manner as the Company deems appropriate, adjust (i) the number and kind of shares subject to outstanding Awards and/or (ii) the exercise price of outstanding Options to reflect such distribution.

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13.2.Reorganization in Which the Company Is the Surviving Entity Which does not Constitute a Corporate Transaction.
     Subject toSection 13.3hereof, if the Company shall be the surviving entity in any reorganization, merger, or consolidation of the Company with one or more other entities which does not constitute a Corporate Transaction, any Option theretofore granted pursuant to the Plan shall pertain to and apply to the securities to which a holder of the number of shares of Stock subject to such Option would have been entitled immediately following such reorganization, merger, or consolidation, with a corresponding proportionate adjustment of the Option Price per share so that the aggregate Option Price thereafter shall be the same as the aggregate Option Price of the shares of Stock remaining subject to the Option immediately prior to such reorganization, merger, or consolidation. Subject to any contrary language in an Award Agreement evidencing an Award, any restrictions applicable to such Award shall apply as well to any replacement shares received by the Grantee as a result of the reorganization, merger or consolidation.
13.3. Corporate Transaction in which Awards are not Assumed.
     Upon the occurrence of a Corporate Transaction in which outstanding Options and Restricted Share Units are not being assumed or continued:
          (i) all outstanding shares of Restricted Share Units shall be deemed to have vested immediately prior to the occurrence of such Corporate Transaction, and (ii) fifteen days prior to the scheduled consummation of a Corporate Transaction, all Options outstanding hereunder shall become immediately exercisable and shall remain exercisable for a period of fifteen days.
          With respect to the period during which Options can be exercised, (i) any exercise of an Option during such fifteen-day period shall be conditioned upon the consummation of the event and shall be effective only immediately before the consummation of the event, and (ii) upon consummation of any Corporate Transaction, the Plan and all outstanding but unexercised Options shall terminate. The Committee shall send notice of an event that will result in such a termination to all individuals who hold Options not later than the time at which the Company gives notice thereof to its stockholders.
13.4. Corporation Transaction in which Awards are Assumed.
     The Plan, Options, and Restricted Share Units theretofore granted shall continue in the manner and under the terms so provided in the event of any Corporate Transaction to the extent that provision is made in writing in connection with such Corporate Transaction for the assumption or continuation of the Options and Restricted Share Units theretofore granted, or for the substitution for such Options and Restricted Share Units for new common stock options and Restricted Share Units relating to the stock of a successor entity, or a parent or subsidiary thereof, with appropriate adjustments as to the number of shares (disregarding any consideration that is not common stock) and option exercise prices in order to provide equivalent value to the Awards. In the event a Grantee’s Award is assumed, continued or substituted upon the consummation of any Corporate Transaction and his employment is terminated without Cause within one year following the consummation of such Corporate Transaction, the Grantee’s Award will be fully vested and may be exercised in

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full, to the extent applicable, beginning on the date of such termination and for the one-year period immediately following such termination.
13.5. Adjustments.
     Adjustments under thisSection 13related to shares of Stock or securities of the Company shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive. No fractional shares or other securities shall be issued pursuant to any such adjustment, and any fractions resulting from any such adjustment shall be eliminated in each case by rounding downward to the nearest whole share. ThisSection 13.5does not limit the Company’s ability to provide for alternative treatment of Awards outstanding under the Plan in the event of change of control events that are not Corporate Transactions.
13.6. No Limitations on Company.
     The making of Awards pursuant to the Plan shall not affect or limit in any way the right or power of the Company to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure or to merge, consolidate, dissolve, or liquidate, or to sell or transfer all or any part of its business or assets.
14. GENERAL PROVISIONS
14.1. Disclaimer of Rights.
     No provision in the Plan or in any Award or Award Agreement shall be construed to confer upon any individual or entity the right to remain in the employ or service of the Company or any Affiliate, or to interfere in any way with any contractual or other right or authority of the Company or any Affiliate either to increase or decrease the compensation or other payments to any individual or entity at any time, or to terminate any employment or other relationship between any individual or entity and the Company or any Affiliate. In addition, notwithstanding anything contained in the Plan to the contrary, unless otherwise stated in the applicable Award Agreement, no Award granted under the Plan shall be affected by any change of duties or position of the Grantee, so long as such Grantee continues to be provide Service. The obligation of the Company to pay any benefits pursuant to this Plan shall be interpreted as a contractual obligation to pay only those amounts described herein, in the manner and under the conditions prescribed herein. The Plan and Awards shall in no way be interpreted to require the Company to transfer any amounts to a third party trustee or otherwise hold any amounts in trust or escrow for payment to any Grantee or beneficiary under the terms of the Plan.
14.2. Nonexclusivity of the Plan.
     Neither the adoption of the Plan nor the submission of the Plan to the stockholders of the Company for approval shall be construed as creating any limitations upon the right and authority of the Committee to adopt such other incentive compensation arrangements (which arrangements may be applicable either generally to a class or classes of individuals or specifically to a particular individual or particular individuals) as the Committee in its

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discretion determines desirable, including, without limitation, the granting of stock options otherwise than under the Plan.
14.3. Withholding Taxes.
     The Company or an Affiliate, as the case may be, shall have the right to deduct from payments of any kind otherwise due to a Grantee any federal, state, or local taxes of any kind required by law to be withheld with respect to the vesting applicable to an Award or upon the issuance of any shares of Stock upon the exercise of an Option or pursuant to an Award. At the time of such vesting or exercise, the Grantee shall pay in cash to the Company or an Affiliate, as the case may be, any amount that the Company or an Affiliate may reasonably determine to be necessary to satisfy such withholding obligation;provided,however, that if there is a same day sale, the Grantee shall pay such withholding obligation on the day that the same day sale is completed. For purposes of determining taxable income and the amount of the related tax withholding obligation under thisSection 14.3, notwithstandingSection 2.14or thisSection 14.3, for any Shares that are sold on the same day that such Shares are first legally saleable pursuant to the terms of the applicable award agreement, Fair Market Value shall be determined based upon the sale price for such Shares so long as the grantee has provided the Company with advance written notice of such sale.
14.4. Captions.
     The use of captions in this Plan or any Award Agreement is for the convenience of reference only and shall not affect the meaning of any provision of the Plan or such Award Agreement.
14.5. Other Provisions.
     Each Award granted under the Plan may contain such other terms and conditions not inconsistent with the Plan as may be determined by the Committee, in its sole discretion.
14.6. Number and Gender.
     With respect to words used in this Plan, the singular form shall include the plural form, the masculine gender shall include the feminine gender, etc., as the context requires.
14.7. Severability.
     If any provision of the Plan or any Award Agreement shall be determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof shall be severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other jurisdiction.
14.8. Governing Law.
     The validity and construction of this Plan and the instruments evidencing the Awards hereunder shall be governed by the laws of the State of Virginia, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Plan and the instruments evidencing the Awards granted hereunder to the substantive laws of any other jurisdiction.

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14.9. Code Section 409A.
     The Company intends to comply with Code Section 409A, or an exemption to Code Section 409A, with regard to Awards hereunder that constitute nonqualified deferred compensation within the meaning of Code Section 409A. To the extent that the Company determines that a Grantee would be subject to the additional 20% tax imposed on certain nonqualified deferred compensation plans pursuant to Code Section 409A as a result of any provision of any Award granted under this Plan, such provision shall be deemed amended to the minimum extent necessary to avoid application of such additional tax. The nature of any such amendment shall be determined by the Committee.
* * *

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     To record adoption of the Plan by the Board as of [                    ], and approval of the Plan by the stockholders on [                    ], the Company has caused its authorized officer to execute the Plan.
NVR, INC.
By:  
Title: 

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(PROXY)
NVR C123456789 000004 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. Annual Meeting Proxy Card PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. A Proposals - The Board of Directors recommends a vote FOR Proposals 1, 2, 3 and 4. 1. Election of Directors: 01 - Manuel H. Johnson 02 - David A. Preiser 03 - John M. Toups 04 - Paul W. Whetsell For Against Abstain 2. Ratification of appointment of KPMG LLP as independent auditors for the year ending December 31, 2010. 3. Management proposal to amend our Restated Articles of Incorporation and Bylaws to declassify the Board of Directors and establish annual elections for all Directors. 4. Management proposal to adopt the NVR, Inc. 2010 Equity Incentive Plan, which authorizes us to grant options and restricted share units to our employees to acquire an aggregate of 700,000 shares of NVR common stock. B Authorized Signatures - This section must be completed for your vote to be counted. - Date and Sign Below Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) - Please print date below. Signature 1 - Please keep signature within the box. Signature 2 - Please keep signature within the box. C 1234567890 J N T 1 U P X 0 2 4 6 5 5 1 MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND <STOCK#> 0158SH

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PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. Proxy - NVR, Inc. Proxy for the Annual Meeting of Shareholders May 4, 2010 Important Notice Regarding the Availability of Proxy Materials for Shareholder Meeting to Be Held on May 4, 2010: o The Proxy Statement and 2009 Annual Report are available at the following website address: www.edocumentview.com/nvr THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints James M. Sack, Dennis M. Seremet and Robert W. Henley, or any of them, as proxies (and if the undersigned is a proxy, as substitute proxies), each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side, all shares of common stock of NVR, Inc. held of record by the undersigned on March 5, 2010 at the Annual Meeting of Shareholders to be held at NVR’s Corporate Headquarters, 11700 Plaza America Drive, Suite 500, Reston, Virginia, 20190, on Tuesday, May 4, 2010at 11:30 A.M. and at any adjournments or postponements thereof. If there are shares allocated to the undersigned in the NVR, Inc. Profit Sharing Trust Plan or the Employee Stock Ownership Plan, the undersigned hereby directs the Trustee to vote all full and fractional shares as indicated on the reverse of this card. Shares for which no voting instructions are received by April 29, 2010 will be voted by the Trustee in the same proportion as all other shares which have been voted. This proxy when properly executed will be voted as directed. If no direction is given with respect to a particular proposal, this proxy will be voted FOR the election of the four nominees for director, FOR the ratification of appointment of KPMG LLP as independent auditors for the year ending December 31, 2010, FOR the management proposal to amend our Restated Articles of Incorporation and Bylaws to declassify the Board of Directors and establish annual elections for all Directors, and FOR the management proposal to adopt the NVR, Inc. 2010 Equity Incentive Plan, which authorizes us to grant options and restricted share units to our employees to acquire an aggregate of 700,000 shares of NVR common stock. The Board of Directors knows of no other business that will be presented at the meeting. If, however, other matters are properly presented, the designated proxies will vote the shares represented thereby in accordance with the recommendation of the Board as to such matters, or if no recommendation is made by the Board, then in accordance with such person’s best judgment pursuant to the authority granted in the proxy. PLEASE MARK, DATE, SIGN, AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED ENVELOPE. CONTINUED AND TO BE SIGNED ON THE REVERSE C Non-Voting Items Change of Address -Please print your new address below. IF VOTING BY MAIL, YOU MUST COMPLETE SECTIONS A - C ON BOTH SIDES OF THIS CARD.