Company: HOVVB
Filing Date: 2025-02-07
Form Type: DEF 14A
Source: 0001140361-25-003579
Chunk: 50

Company: HOVNANIAN ENTERPRISES INC
Filing Date: 2025-02-07
Form: DEF 14A
Chunk 50
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/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; (2) the impact of any items deemed by the Committee to be unusual or nonrecurring items; and (3) losses from land impairments and gains or losses from debt repurchases/debt retirement such as call premiums and related issuance costs. “Average Investment” shall mean the average 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 the Company’s balance sheet, excluding capitalized interest and the impact of consolidated inventory not owned, for each of the five consecutive fiscal quarters ending April 30, 2025. 94

| EBIT Return on Investment  
 for the 4 Quarters Ending  
 April 30, 2025             | Performance                                                                                                     
 Multiplier*                                                                                                     |
|:---------------------------|:----------------------------------------------------------------------------------------------------------------|
| More than 25% below target | 50%                                                                                                             |
| Target                     | 100%                                                                                                            |
| 25% or more above target   | 200%                                                                                                            |
|                            | *The applicable Performance Multiplier is interpolated on a linear basis between the points shown in the table. |

Achievement under the 2023 PSUs In fiscal 2023, the Committee granted PSUs to the NEOs because it believes PSUs provide a clear linkage to shareholder value creation and balance retention and performance objectives. Half of the fiscal 2023 PSUs were tied to absolute EBIT levels, while the other half of the PSUs were tied to EBIT Return on Investment rank relative to the Peer Group, each as further discussed below. The absolute EBIT metric was chosen because the Committee determined that it supports the Company’s strategic goal of improving profitability and interest coverage. The relative EBIT Return on Investment metric was chosen because the Committee determined that it measures pure operating performance compared to the Peer Group on a leverage neutral basis. Earned PSUs vest on the third anniversary of the grant date and are further subject to a mandatory two-year post-vesting delayed delivery such that the PSU awards will not be completely distributed until five years following the grant date, or June 9, 2028.

|                            | Target 2023 PSUs Tied to 
     Absolute EBIT Levels | Target 2023 PSUs Tied to Relative 
    EBIT Return on Investment Rank |
| Mr.