Company: SDHC
Filing Date: 2025-04-23
Form Type: DEF 14A
Source: 0001982518-25-000012
Chunk: 67

Company: Smith Douglas Homes Corp.
Filing Date: 2025-04-23
Form: DEF 14A
Chunk 67
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, effect a direct exchange by Smith Douglas Homes Corp. of cash, our Class A common stock, for such LLC Interests in lieu of such a redemption. Whether by redemption or exchange, we are obligated to ensure that at all times the number of LLC Interests that we own equals the number of our outstanding shares of Class A common stock (subject to certain exceptions for treasury shares and shares underlying certain convertible or exchangeable securities).

Amendments . In addition to certain other requirements, our consent, as manager, and the consent of members holding a majority of the LLC Interests then outstanding and entitled to vote (excluding LLC Interests held directly or indirectly by us) will generally be required to amend or modify the Smith Douglas LLC Agreement.

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#### Registration Rights Agreement
We entered into the Registration Rights Agreement with certain of the Continuing Equity Owners in connection with the IPO. The Registration Rights Agreement provides certain of the Continuing Equity Owners with certain “demand” registration rights whereby, at any time after 180 days following our IPO and the expiration of any related lock-up period, such Continuing Equity Owners can require us to register under the Securities Act the offer and sale of shares of Class A common stock issuable to them, at our election (determined solely by our independent directors (within the meaning of the NYSE rules) who are disinterested), upon redemption or exchange of their LLC Interests. The Registration Rights Agreement provides for customary “piggyback” registration rights for all parties to the agreement.

#### Certain Land Banking Arrangements
We enter into lot option agreements to procure lots for the construction of homes in the future. Pursuant to these option agreements, we generally provide a deposit to the seller as consideration for the right to purchase lots at different times in the future at predetermined prices. Such contracts enable us to defer acquiring portions of properties owned by third parties or unconsolidated entities until we have determined whether and when to exercise the option, which may serve to reduce our financial risks associated with long-term land holdings.

We have in the past entered into lot option agreements with a former member of the board of managers of Smith Douglas Holdings LLC. During the year ended December 31, 2023, we sold 62 finished lots at cost for approximately $3.7 million to the then member of the board of managers. Additionally, during the year ended December 31, 2023, we purchased 160 lots totaling $10.2 million, related to these lot option agreements. The member was