Exhibit 10.34
NVR, INC.
1998 DIRECTORS’ LONG-TERM STOCK OPTION PLAN
STOCK OPTION AGREEMENT
     THIS AGREEMENT is entered into as of                     , between NVR,
Inc., a Virginia corporation (hereinafter “NVR”), and
                                        , a non-employee director of NVR (the
“Optionee”).
Recitals:
     WHEREAS, NVR has adopted the NVR, Inc. 1998 Directors’ Long-Term Stock
Option Plan ( the “Plan”) providing for the grant under certain circumstances of
options (the “Options”) exercisable for the purchase of shares of NVR Common
Stock (the “Shares”);
     WHEREAS, NVR, under the terms and conditions set forth below, has offered
and committed to grant an Option under the Plan to the Optionee in connection
with the Optionee’s service as a non-employee director of NVR; and
     WHEREAS, in consideration of the grant of the Option and other benefits,
the Optionee is willing to accept the Option provided for in this Agreement and
is willing to abide by the obligations imposed on him or her under this
Agreement and the other responsibilities of his or her position.
Provisions:
     NOW, THEREFORE, in consideration of the mutual benefits hereinafter
provided, and each intending to be legally bound, NVR and the Optionee hereby
agree as follows:
     1. Acknowledgments of Optionee. The Option granted under this Agreement is
intended to provide to the Optionee an opportunity to purchase Shares. The
Optionee provides service to NVR in the capacity of a non-employee director. The
Optionee acknowledges that such position, the Option granted under this
Agreement and the other benefits of his or her service in that capacity are
being conferred upon the Optionee only because of and on the condition of the
willingness of the Optionee to commit his or her best efforts and loyalty to NVR
in the performance of the duties of that position.
     2. Effect of the Plan. The Option to be granted under this Agreement will
be subject to all of the terms and conditions of the Plan, which are
incorporated by reference and made part of this Agreement. The Optionee will
abide by, and the Option granted to the Optionee will be subject to, all of the
provisions of the Plan and of this Agreement, together with all rules and
determinations from time to time issued by the Committee established to
administer the Plan and by the Board of Directors of NVR (hereinafter “Board”)
pursuant to the Plan.
     3. Grants. The Optionee is hereby granted an option to purchase 1,302
Shares, with an Option Price of $                     per Share.
     4. Exercise; Conditions to Exercise.
          (a) Period of Exercise. Subject to Section 4(g) below, the Option may
be exercised in whole or in part with respect to vested grants at any time after
vesting. No Option may be exercised after ten years from the date of grant. The
Option may be exercised only with respect to whole Shares.

 

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          (b) Vesting of Option. On each of December 31, ___,
                     and ___,                      percent
(                    %) of the Options shall be exercisable in respect of the
number of Shares initially subject to the Option. Subject to Section 4(g), the
foregoing installments, to the extent not exercised, shall accumulate and be
exercisable, in whole or in part, at any time and from time to time, after
becoming exercisable and prior to the termination of the Option. For the
avoidance of doubt and by way of example, if additional vesting occurs on
December 31, 2010, the Options additionally vested on that date could not be
exercised until the first business day of 2011, at which time the Optionee would
not necessarily have to be a non-employee director in order to exercise the
Options, subject to the earlier termination of the Option pursuant to
Paragraph 5 of this Agreement.
          (c) Exercisability. In the event of a termination of the Optionee’s
service as a non-employee director other than for “Cause” (as defined in
Section 5), resulting from the Optionee’s involuntary termination without
“Cause” (as defined in Section 5), death, disability or retirement at normal
retirement age, the Option shall become exercisable at the date of termination
for an additional portion of the previously nonexercisable portion of the Option
which would have been eligible to be exercised at the end of the year in which
such termination occurs and the remaining unvested portion of the Option shall
immediately terminate. In addition, if the Optionee’s service is terminated
because the Optionee (i) does not stand for reelection as a director, (ii) is
asked not to stand for reelection as a director, or (iii) stands for reelection
but is not reelected as a director, the Option shall become exercisable at the
date of termination for an additional portion of the previously nonexercisable
portion of the Option which the Optionee would have been eligible to exercise if
the Optionee had continued to provide service to the company for the remainder
of the calendar year in which his or her termination occurs and for one
additional year thereafter and the remaining unvested portion of the Option
shall immediately terminate.
          (d) Who May Exercise. During the Optionee’s lifetime, the Option
rights may be exercised only by him or her.
          (e) Manner of Exercise. Option rights may be exercised by the delivery
of written notice from the Optionee to the Committee or the Committee’s designee
specifying the number of Shares then being exercised.
          (f) Payment of Exercise Price. To exercise the Option, the Optionee
must make full payment of the Option Price to NVR in any one or more of the
following ways:
     (i) in cash, including check, bank draft, or money order; and/or
     (ii) by the assignment and delivery to NVR of Shares owned by the Optionee
(or his estate) provided however, that such Shares have not been acquired
pursuant to the exercise of an option within the last six months (unless the
options were exercised following the death of the Optionee), are free and clear
of all liens and encumbrances and have a fair market value (as determined by the
closing price on the national securities exchange on which the Shares are listed
on the day preceding the day of exercise or by any other method acceptable to
the Committee in its absolute discretion) equal to the applicable Option Price
less than any portion thereof paid in cash.
     The Optionee also must reimburse NVR for the amount of all applicable
withholding taxes at the rate required to be paid by NVR.
          (g) Restrictions on Exercise - Regulatory Matters. The Option may not
be exercised if such exercise would constitute a violation of any applicable
Federal or state statute or regulation or if any required approval of a
governmental authority having jurisdiction shall not have been secured. NVR
agrees to use reasonable diligence to obtain all such requisite approvals or
consents.

 

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     5. Termination of Option. If the Optionee ceases to be a non-employee
director as a result of a termination for “Cause” (as defined in this
paragraph), the Option shall terminate. A termination shall be for “Cause” in
the event the Optionee ceases to be a non-employee director of NVR as a result
of (i) conviction of a felony, or other crime involving moral turpitude;
(ii) gross misconduct in connection with the performance of such Optionee’s
duties (which shall include a breach of such Optionee’s fiduciary duty of
loyalty); (iii) a willful violation of any criminal law involving a felony,
including federal or state securities laws; or (iv) material breaches (following
notice and an opportunity to cure) of any covenants by the Optionee contained in
any agreement between the Optionee and NVR, including violations of the
Company’s Code of Ethics. In the event of a termination for “Cause”, the
unexercised Option shall terminate immediately.
In no event may the Option be exercised by the Optionee if he or she has
violated any provision of this Agreement.
     6. Adjustment Upon Changes in Shares. Adjustments specified in Section 7
relating to Shares or securities of the Corporation shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive. No
fractional shares or units of 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 or unit.
     7. Effect Of Changes In Capitalization.
          (a) Changes in Shares. If the outstanding Shares are increased or
decreased or changed into or exchanged for a different number or kind of shares
or other securities of the Corporation by reason of any recapitalization,
reclassification, stock split-up, combination of stock, exchange of shares,
stock dividend or other distribution payable on capital stock, or other increase
or decrease in such shares effected without receipt of consideration by the
Corporation occurring after the date the Option is granted, the number and kind
of shares for which the Option is outstanding shall be adjusted proportionately
and appropriately , so that the proportionate interest of the Optionee
immediately following such event shall, to the extent practicable, be the same
as immediately prior to such event. Any such adjustment in the Option shall not
change the aggregate Option Price payable with respect to shares subject to the
unexercised portion of the Option but shall include a corresponding
proportionate adjustment in the Option Price per share.
          (b) Reorganization in Which the Corporation Is the Surviving Entity.
Subject to Section 7(c) of this Section, if the Corporation shall be the
surviving entity in any reorganization, merger or consolidation of the
Corporation with one or more other entities, the Option shall pertain to and
apply to the securities to which a holder of the number of shares subject to the
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 remaining subject to the
Option immediately prior to such reorganization, merger or consolidation.
          (c) Reorganization in Which the Corporation Is Not the Surviving
Corporation or Sale of Assets or Shares. Upon the dissolution or liquidation of
the Corporation, or upon a merger, consolidation or reorganization of the
Corporation with one or more other corporations in which the Corporation is not
the surviving corporation, or upon a sale of substantially all of the assets of
the Corporation to another corporation, or upon any transaction (including,
without limitation, a merger or reorganization in which the Corporation is the
surviving corporation) which results in any person or entity (or persons or
entities acting as a group or in concert) owning 20 percent or more of the
combined voting power of all classes of stock of the Corporation, or upon any
person commencing a tender or exchange offer or entering into an agreement or
receiving an option to acquire beneficial ownership of 20 percent or more of the
total number of voting shares of the Corporation, all Options outstanding
hereunder shall fully vest. In the event of any such change of control, sale of
assets or other corporate transaction (a “Transaction”), each individual holding
an Option shall have the right (i) immediately prior to the

 

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occurrence of such Transaction and (ii) during such period occurring prior to
such Transaction as the Administrator in its sole discretion shall designate, to
exercise such Option in whole or in part, whether or not such Option was
otherwise exercisable at the time such Transaction occurs and without regard to
any installment limitation on exercise imposed pursuant to Section 4(b) above,
but with regard to the limitation on exercise imposed pursuant to Section 4(g)
above. The Administrator shall send written notice of an event that will result
in such an exercise period to all individuals who hold Options not later than
the time at which the Corporation gives notice thereof to its stockholders.
     8. Nonassignability. The options may not be transferred in any manner
otherwise than by will or the laws of descent and distribution.
     9. Rights as a Holder of Shares. An Optionee or a transferee of an Option
shall have no rights as a Shareholder with respect to any Shares covered by his
or her Option until the date on which payment is made by him or her, and
accepted by the Company, for such Shares. No adjustment shall be made for
distributions for which the record date is prior to the date such payment is
made and accepted.
     10. Disclaimer of Rights. No provision in this Agreement shall be construed
to confer upon the Optionee the right to continue as a director of NVR.
     11. Notices. Notices regarding the exercise of Options must be in writing,
addressed and delivered or mailed to: NVR, Inc., Plaza America Tower I, 11700
Plaza America Drive, Suite 500, Reston, VA 20190, Attn: Assistant Treasurer. All
other notices to NVR must be in writing, addressed and delivered or mailed to:
NVR, Inc., Plaza America Tower I, 11700 Plaza America Drive, Suite 500, Reston,
VA 20190, Attn: Sr. Vice President, Human Resources. All notices to the Optionee
must be in writing addressed and delivered or mailed to him or her at the
address shown on the records of NVR.
     12. Governing Law. This Agreement and all determinations made and actions
taken pursuant thereto, shall be governed under the laws of the Commonwealth of
Virginia.
     13. Severability. If any part of this Agreement shall be determined to be
invalid or unenforceable, such part shall be ineffective only to the extent of
such invalidity or unenforceability, without affecting the remaining portions
hereof.
     14. Amendment, Suspension or Termination of Plan. The Company may from time
to time amend, suspend or, at any time, terminate the Plan or modify this option
agreement with the consent of the Optionee. An amendment, suspension or
termination of the Plan shall not without the consent of the Optionee, reduce or
impair any rights or obligations under this Agreement.
          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.

            NVR, INC.
      By:           Its:                  OPTIONEE