Company: HOVVB
Filing Date: 2025-02-07
Form Type: DEF 14A
Source: 0001140361-25-003579
Chunk: 54

Company: HOVNANIAN ENTERPRISES INC
Filing Date: 2025-02-07
Form: DEF 14A
Chunk 54
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 call premiums and related issuance costs and, for Hovnanian Enterprises, Inc., excluding: (1) expense/income recorded during the Performance Period from any phantom share based awards related to changes in the stock price above or below the stock price at the date of grant and (2) the impact of any items deemed by the Committee to be unusual or nonrecurring items. “Average Investment” shall mean the average for each of the five most recently completed consecutive fiscal quarters as of October 31, 2026 of the sum of the ending inventory, investment in unconsolidated joint ventures, investment in build-for-rent assets, definite life intangibles and goodwill balances from each company’s audited balance sheet, excluding capitalized interest and the impact of consolidated inventory not owned. “Net debt to capital” shall mean the quotient resulting from (A) the result of (1) Homebuilding Debt minus (2) cash divided by (B) the result of (1) Homebuilding Debt minus (2) cash plus (3) equity from the Company’s audited financial statements as of October 31, 2026. “Homebuilding Debt” is defined as public debt plus non-recourse financing from the Company’s audited financial statements as of October 31, 2026. 98 Achievement under the 2022 Long-Term Incentive Program In fiscal 2022, the Company adopted a Long-Term Incentive Program (the “2022 LTIP”) to further aid the Company in retaining key employees and to motivate them to exert their best efforts on behalf of the Company. Specifically, the 2022 LTIP was entirely performance-based and was intended to incentivize achievement of specified pre-tax profit goals as a measure of operational improvement and specified improvements in the Company’s annualized interest incurred based on outstanding homebuilding debt (“Annualized Interest Incurred”). The Committee chose these metrics to align and incentivize the NEOs to focus on gaining operating efficiencies and improving our bottom line. In particular, using annualized interest expense as a financial measure incentivizes management to work towards improvement of our balance sheet. Each of the NEOs was a participant in the 2022 LTIP, and their award payouts were determined based on actual performance for the full 36-month performance period and subject to holding requirements as described below. This performance period commenced on November 1, 2021 (the beginning of fiscal 2022) and ended on October 31, 2024 (that is, the performance period covered