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SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Filed by the Registrantþ | ||
Filed by a Party other than the Registranto | ||
Check the appropriate box: | ||
o Preliminary Proxy Statement | o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
þ Definitive Proxy Statement | ||
o Definitive Additional Materials | ||
o Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 |
NVR, Inc.
Payment of Filing Fee (Check the appropriate box):
þ No fee required.
o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): |
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
o | Fee paid previously with preliminary materials. | |
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. |
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11700 Plaza America Drive
Reston, VA 20190
11:30 A.M. Eastern Standard Time
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11700 Plaza America Drive
Suite 500
Reston, VA 20190
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Timothy M. Donahue
William A. Moran
FOREGOING NOMINEES AS DIRECTORS OF NVR.
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Year First Elected or Appointed/ | ||||||||
Name | Age | Term Expires | ||||||
Dwight C. Schar(3*) | 64 | 1993/2008 | ||||||
C. Scott Bartlett, Jr.(1) (4) (6) | 73 | 1993/2006 | ||||||
Robert C. Butler(* *) (1) (4 )(5*) (6) | 75 | 2002/2008 | ||||||
Timothy M. Donahue(2) (4) | 57 | 2006/2006 | ||||||
Manuel H. Johnson(1*) (2) (5) (6*) | 57 | 1993/2007 | ||||||
William A. Moran(3) | 59 | 1993/2006 | ||||||
David A. Preiser(2) (4*) (5) | 49 | 1993/2007 | ||||||
George E. Slye(1) (3) (6) | 75 | 1993/2008 | ||||||
John M. Toups(2*)(3) (5) | 80 | 1993/2007 |
(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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Name and Address of Holder | Number of Shares(1) | Percent of Class | ||||||
Barclays Global Investors, N.A. | 926,066 | 16.4 | % | |||||
45 Fremont Street | ||||||||
San Francisco, CA 94105 | ||||||||
Putnam, LLC | 653,764 | 11.5 | % | |||||
One Post Office Square | ||||||||
Boston, MA 02109 |
(1) | Based solely upon information contained within Schedule 13G’s filed by such entities dated January 26, 2006 and February 10, 2006 respectively. |
Name | Number of Shares | Percent of Class | ||||||
Dwight C. Schar | 478,400 | (1) | 8.4 | % | ||||
C. Scott Bartlett, Jr. | 9,400 | (2) | * | |||||
Robert C. Butler | 300 | * | ||||||
Timothy M. Donahue | 200 | * | ||||||
Manuel H. Johnson | 32,965 | (3) | * | |||||
William A. Moran | 20,500 | (4) | * | |||||
David A. Preiser | 4,050 | (4) | * | |||||
George E. Slye | 3,125 | * | ||||||
John M. Toups | 14,468 | (5) | * | |||||
William J. Inman | 126,386 | (6) | 2.2 | % | ||||
Paul C. Saville | 275,229 | (7) | 4.8 | % | ||||
Dennis M. Seremet | 66,447 | (8) | 1.2 | % | ||||
Robert W. Henley | 3,742 | (9) | * | |||||
All directors, director nominees and executive officers as a group (13 persons) | 1,035,212 | 17.8 | % |
* | Less than 1%. | |
(1) | Includes 3,209 vested shares held by the NVR, Inc. Employee Stock Ownership Plan in trust, 242,950 vested shares held in a Deferred Compensation Rabbi Trust and 31,714 shares held as a discretionary investment in the NVR, Inc. Profit Sharing Plan. | |
(2) | Includes 7,875 vested options issued under the 1998 Directors’ Long Term Stock Option Plan and 1,025 shares owned by his wife. | |
(3) | Includes 10,000 vested options issued under the 1996 Directors’ Long Term Stock Option Plan, 12,500 vested options issued under the 1998 Directors’ Long Term Stock Option Plan and 65 shares owned by his son. | |
(4) | Includes 3,125 vested options issued under the 1998 Directors’ Long Term Stock Option Plan. | |
(5) | Includes 12,500 vested options issued under the 1998 Directors’ Long Term Stock Option Plan and 43 shares owned by his wife. |
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(6) | Includes 6,667 vested options issued under the 1998 Management Long Term Stock Option Plan, 86,384 vested shares held in a Deferred Compensation Rabbi Trust and 3,117 vested shares held by the NVR, Inc. Employee Stock Ownership Plan in trust. | |
(7) | Includes 87,500 vested options issued under the 1998 Management Long Term Stock Option Plan, 3,209 vested shares held by the NVR, Inc. Employee Stock Ownership Plan in trust, 4,150 shares held as a discretionary investment in the NVR, Inc. Profit Sharing Plan, 60,000 shares held in a family LLC, 105,883 vested shares held in a Deferred Compensation Rabbi Trust and 2,000 shares owned by his children. | |
(8) | Includes 20,000 vested options issued under the 1998 Management Long Term Stock Option Plan, 3,065 vested shares held by the NVR, Inc. Employee Stock Ownership Plan in trust, 1,905 shares held as a discretionary investment in the NVR, Inc. Profit Sharing Plan, 40,527 vested shares held in a Deferred Compensation Rabbi Trust and 600 shares owned by his children. | |
(9) | Includes 2,500 vested options issued under the 1996 Management Long Term Stock Option Plan, 1,076 vested shares held by the NVR, Inc. Employee Stock Ownership Plan in trust and 166 shares held as a discretionary investment in the NVR, Inc. Profit Sharing Plan. |
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Term Description | 1996 Plan | 1998 Plan | 2000 Plan | 2005 Plan | ||||
Exercise price | Market value on | Market value on | Market value on | Market value on | ||||
date of grant | date of grant | date of grant | date of grant | |||||
Repricing requires | No | Yes | Yes | Yes | ||||
shareholder approval | ||||||||
Date options were granted to executive | May 30, 1996 | May 26, 1999 | May 3, 2001 | May 26, 2005 | ||||
officers | ||||||||
Vesting Determination | Continued employment at | Continued employment at | Continued employment at | Attainment of EPS Target (defined | ||||
vesting dates | vesting dates | vesting dates | below), then continued employment at vesting dates | |||||
Vesting period for | One-third on each of | One-third on each | One-quarter on each | One-quarter on each | ||||
executive officers | December 31, 2000, | of December 31, | of December 31, | of December 31, | ||||
2001 and 2002 | 2003, 2004 and | 2006, 2007, 2008 | 2010, 2011, 2012, | |||||
2005 | and 2009 | and 2013 | ||||||
Period from grant | Six years and | Six years and seven | Eight years and | Eight years and | ||||
date to full vesting | seven months | months | eight months | seven months |
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Annual Compensation | Long-Term Compensation | |||||||||||||||||||||||||||
Name and | Incentive | Other Annual | Stock | LTIP | All Other | |||||||||||||||||||||||
Principal Position | Year | Salary | Compensation(1) | Compensation | Options(2) | Payouts | Compensation(3) | |||||||||||||||||||||
Dwight C. Schar | 2005 | $ | 2,000,000 | $ | 2,000,000 | $ | — | 25,000 | $ | — | $ | 11,000 | ||||||||||||||||
Chairman of the | 2004 | 1,700,000 | 1,700,000 | — | — | — | 10,500 | |||||||||||||||||||||
Board(4) | 2003 | 1,620,000 | 1,620,000 | — | — | — | 10,500 | |||||||||||||||||||||
Paul C. Saville | 2005 | $ | 600,000 | $ | 600,000 | $ | — | 25,000 | $ | — | $ | 11,000 | ||||||||||||||||
Chief Executive Officer | 2004 | 470,000 | 470,000 | — | — | — | 10,500 | |||||||||||||||||||||
and President(4) | 2003 | 450,000 | 450,000 | — | — | — | 10,500 | |||||||||||||||||||||
William J. Inman | 2005 | $ | 390,000 | $ | 327,768 | $ | — | 10,000 | $ | — | $ | 10,500 | ||||||||||||||||
President of NVR | 2004 | 375,000 | 169,707 | — | — | — | 10,000 | |||||||||||||||||||||
Mortgage Finance, Inc. | 2003 | 360,000 | 360,000 | — | — | — | 10,000 | |||||||||||||||||||||
Dennis M. Seremet | 2005 | $ | 350,000 | $ | 350,000 | $ | — | 11,835 | $ | — | $ | 11,000 | ||||||||||||||||
Chief Financial Officer | 2004 | 235,000 | 235,000 | — | — | — | 10,500 | |||||||||||||||||||||
and Treasurer(4) | 2003 | 225,000 | 225,000 | — | — | — | 10,500 | |||||||||||||||||||||
Robert W. Henley | 2005 | $ | 157,700 | $ | 123,030 | $ | — | 2,835 | $ | — | $ | 10,500 | ||||||||||||||||
Vice President and | ||||||||||||||||||||||||||||
Controller(4) |
(1) | Incentive compensation is reflected in the year earned. All incentive compensation earned for the periods presented was paid in March of the subsequent calendar year, with the exception of Messrs. Schar and Saville who elected to defer receipt of their respective 2005 payments pursuant to the Deferred Compensation Plan. | |
(2) | If the EPS Target is met, 25% of the options issued from the 2005 Stock Option Plan vest on each of December 31, 2010, 2011, 2012 and 2013 with vesting contingent upon continued employment. The options expire immediately if the EPS Target is not attained (see the section above captionedCompensation Committee Report on Executive Compensationfor a more detailed description of the 2005 Stock Option Plan and the EPS Target). See the following table captionedOption Grants in 2005for further information. | |
(3) | Amount contributed to the Employee Stock Ownership Plan for the respective plan years. | |
(4) | Effective July 1, 2005, NVR affected changes to its executive officer roles. Mr. Schar remained the Company’s Chairman, but ceded the Chief Executive Officer role to Mr. Saville, formerly NVR’s Chief Financial Officer. Mr. Seremet, formerly NVR’s Controller, was named the Chief Financial Officer. Mr. Henley, who was not previously an executive officer, was named the Controller to succeed Mr. Seremet. Because Mr. Henley was not an executive officer prior to July 1, 2005, only 2005 compensation is reported. |
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Percent of | ||||||||||||||||||||
Total Options | ||||||||||||||||||||
Granted to | Option | |||||||||||||||||||
Stock | Employees | Exercise | Potential Realizable Value | |||||||||||||||||
Options | for the | Price | Expiration | Using the Black-Scholes Option | ||||||||||||||||
Name | Granted (#) | Fiscal Year | ($/Share) | Date | Pricing Model(1) | |||||||||||||||
Dwight C. Schar | 25,000 | 6.0% | $ | 737.00 | 05/25/15 | $ | 9,071,250 | (2) | ||||||||||||
Paul C. Saville | 25,000 | 6.0% | 737.00 | 05/25/15 | 9,071,250 | (2) | ||||||||||||||
William J. Inman | 10,000 | 2.4% | 737.00 | 05/25/15 | 3,628,500 | (2) | ||||||||||||||
Dennis M. Seremet | 10,000 | 2.4% | 737.00 | 05/25/15 | 3,628,500 | (2) | ||||||||||||||
Dennis M. Seremet | 1,835 | 0.4% | 810.00 | 06/30/15 | 737,321 | (3) | ||||||||||||||
Robert W. Henley | 1,000 | 0.2% | 737.00 | 05/25/15 | 362,850 | (2) | ||||||||||||||
Robert W. Henley | 1,835 | 0.4% | 810.00 | 06/30/15 | 737,321 | (3) |
(1) | The exercise price of the grants was equal to the market value of the underlying stock on the date of the respective grants. The options vest in twenty-five percent increments in each of 2010, 2011, 2012 and 2013 if the EPS Target is achieved and contingent on continued employment. None of the options granted under the Stock Option Plan will become exercisable (other than in the case of a change in control) unless NVR satisfies a performance target based on growth in diluted earnings per share (the “EPS Target”). The EPS Target is set at a level that reflects a growth rate in diluted earnings per share of ten percent (10%) per year for four years, based on our 2004 diluted earnings per share of $66.42. The aggregate EPS Target is $339.00 per share, measured in 2009 based on the sum of the actual diluted earnings per share results for the four annual periods ending December 31, 2005 through 2008. The diluted earnings per share for the EPS Target will be calculated based on generally accepted accounting principles in effect at the end of each of the respective four years. The EPS Target will not be adjusted for accounting rule changes that subsequently become effective. | |
(2) | The fair value per share was calculated under the following assumptions: i) the tranche-weighted estimated option life is equal to 8.8 years, ii) the risk free interest rate was 4.0% (based on a U.S. Treasury Strip due in a number of years equal to the estimated option life), iii) the expected volatility equals 34%, and iv) the estimated dividend yield is equal to 0%. | |
(3) | The fair value per share was calculated under the following assumptions: i) the tranche-weighted estimated option life is equal to 8.8 years, ii) the risk free interest rate was 4.1% (based on a U.S. Treasury Strip due in a number of years equal to the estimated option life), iii) the expected volatility equals 34%, and iv) the estimated dividend yield is equal to 0%. |
Number of Unexercised Stock | Value of UnexercisedIn-the- | |||||||||||||||||||||||
Shares Acquired on | Options at Year-End | Money Options at Year-End | ||||||||||||||||||||||
Name | Exercise | Value Realized | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
Dwight C. Schar | 83,333 | $ | 61,281,005 | 83,333 | 425,000 | $ | 54,531,032 | $ | 205,200,000 | |||||||||||||||
Paul C. Saville | 24,300 | 19,019,903 | 89,200 | 175,000 | 58,433,150 | 76,950,000 | ||||||||||||||||||
William J. Inman | 16,666 | 12,192,950 | 16,667 | 60,000 | 10,906,468 | 25,650,000 | ||||||||||||||||||
Dennis M. Seremet | — | — | 20,000 | 61,835 | 13,087,500 | 25,650,000 | ||||||||||||||||||
Robert W. Henley | 2,500 | 1,718,350 | 2,500 | 9,835 | 1,491,350 | 3,591,000 |
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(Proposal 2)
APPROVAL OF KPMG LLP AS NVR’S INDEPENDENT AUDITORS FOR 2006.
DURING THE YEARS ENDED DECEMBER 31:
2005 | 2004 | |||||||
Audit fees: | ||||||||
Audit fees and quarterly reviews | $ | 327,000 | $ | 261,500 | ||||
Section 404 internal control audit | 270,000 | 300,000 | ||||||
Comfort letter/Consents | 9,000 | 7,500 | ||||||
606,000 | 569,000 | |||||||
Audit-related fees: | ||||||||
Employee benefit plan audit | 28,000 | 17,000 | ||||||
Tax fees: | ||||||||
State tax appeal assistance | 11,794 | — | ||||||
All other fees: | — | — | ||||||
Total fees | $ | 645,794 | $ | 586,000 | ||||
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AUDIT COMMITTEE
OF NVR, INC. (“NVR” or the “Company”)
2. | Structure and Membership Requirements |
3. | Meetings |
4. | Duties and powers |
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Board of Director Candidates
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Policies and Procedures Regarding
Security Holder Communications with the NVR, Inc. Board of Directors
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o | Mark this box with an X if you have made changes to your name or address details above. |
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1. | Election of Directors for a term of three years, Nominees: |
For | Withhold | |||
01 — C. Scott Bartlett, Jr. | o | o | ||
02 — Timothy M. Donahue | o | o | ||
03 — William A. Moran | o | o |
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For | Against | Abstain | ||||||||
2. | Ratification of appointment of KPMG LLP as independent auditors for the year ending December 31, 2006. | o | o | o | ||||||
3. | In their discretion, the proxies are authorized to vote upon any other business that may properly come before the meeting. |
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Signature 1 — Please keep signature within the box | Signature 2 — Please keep signature within the box | Date (mm/dd/yyyy) |
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May 4, 2006