Exhibit 10.1
NVR, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
Originally Effective January 1, 1994
Amended and Restated Through January 1, 2002

 

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Execution Copy
TABLE OF CONTENTS

              Page
1. NAME AND EFFECTIVE DATE
    5  
1.1 Name of the Plan
    5  
1.2 Purpose of the Plan
    5  
1.3 Restatement of Plan
    6  
2. DEFINITIONS
    7  
2.1 Definitions
    7  
3. MEMBERSHIP
    15  
3.1 Eligibility
    15  
3.2 Notice
    15  
3.3 Reemployment
    15  
4. CONTRIBUTIONS
    16  
4.1 In General
    16  
4.2 Form and Time of Employer Contributions
    16  
4.3 Omission of Eligible Employee; Inclusion of Ineligible Employee
    17  
4.4 Member Contributions
    17  
5. INVESTMENT OF TRUST ASSETS; ACQUISITION LOANS
    18  
5.1 Investment of Trust Fund
    18  
5.2 Acquisition Loans
    18  
6. MEMBER’S ACCOUNTS
    20  
6.1 Maintenance of Member Accounts
    20  
6.2 Stock Accounts: Acquisition Loan Suspense Account
    20  
6.3 Other Investments Account
    20  
6.4 Allocations to Member Accounts
    21  
6.5 Maximum Benefit and Contribution Limitations — In General
    23  
6.6 Allocations after Nonrecognition Sale to ESOP
    26  
7. VOTING RIGHTS; EXPENSES; STOCK PURCHASE RIGHTS, ETC
    28  
7.1 Voting Rights
    28  
7.2 Expenses
    28  
7.3 Stock Purchase Rights, Warrants, and Options
    29  
8. DISTRIBUTION OF BENEFITS
    30  
8.1 Retirement; Form of Benefits
    30  
8.2 Disability Retirement
    32  
8.3 Vesting
    32  
8.4 Reemployment – Reinstatement of Forfeitures
    33  
8.5 Death Benefits
    34  
8.6 Discharge for Cause
    34  
8.7 Distributions Prior to Termination of Employment
    34  

 

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              Page
8.8 Distribution of Benefits after Termination of Employment
    34  
8.9 Distributions to Alternate Payees
    35  
8.10 Distribution for Minor Beneficiary
    36  
8.11 Proof of Death and Right of Beneficiary or Other Person
    37  
8.12 Designation of Beneficiary
    37  
8.13 Amendments and Modifications Relating to Vesting
    38  
8.14 Option To Require Employer To Purchase Stock
    38  
8.15 No Other Rights To Put or Call Stock
    39  
8.16 Distributions to Qualified Members
    39  
8.17 Distribution from Member Accounts of Cash Dividends on Stock
    40  
9. ACCOUNTS AND RECORDS OF THE PLAN
    40  
10. PROFIT SHARING COMMITTEE
    41  
10.1 Membership
    41  
10.2 Majority Vote
    41  
10.3 Chairman, Secretary, Signature
    41  
10.4 Regulations, Records
    41  
10.5 Powers and Duties
    42  
10.6 Appointment of Agents
    43  
10.7 Expenses
    43  
10.8 Member Not to Vote on Own Participation
    43  
10.9 Employer to Furnish Information
    43  
10.10 Indemnification
    43  
10.11 Claims Procedure
    44  
11. CONTROL AND MANAGEMENT OF ASSETS
    45  
11.1 Custody of Assets
    45  
11.2 Duties of Trustee
    45  
11.3 Delegation of Responsibilities of the Board of Directors
    45  
12. AMENDMENT AND TERMINATION
    47  
12.1 Future of Plan
    47  
12.2 Continued Qualification of Plan
    47  
12.3 Termination of Plan
    47  
12.4 Merger or Consolidation or Transfer
    47  
12.5 Additional Employers
    47  
13. TOP HEAVY PROVISIONS
    48  
13.1 Definitions
    48  
13.2 Top Heavy Plan Year Vesting
    50  
13.3 Top Heavy Plan Year Contribution
    50  
14. MISCELLANEOUS
    51  
14.1 Representations to Fiduciaries
    51  
14.2 Standard of Fiduciary Conduct
    51  
14.3 Limitation on Liability
    51  
14.4 Notice of Address
    51  
14.5 Fund To Be for the Exclusive Benefit of Members
    51  

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              Page
14.6 Restrictions on Alienation
    52  
14.7 No Enlargement of Employee Rights
    53  
14.8 Headings
    53  
14.9 Governing Law
    53  
14.10 Gender and Number
    53  
14.11 Internal Revenue Service Approval
    53  
14.12 Rights of Prior Employees
    53  
14.13 Satisfaction of Claims
    53  
14.14 Cy Pres
    54  
14.15 Counterparts
    54  
14.16 Interpretation
    54  

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Execution Copy
NVR, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(Originally Effective January 1, 1994
As Amended and Restated Through January 1, 2002)
1. NAME AND EFFECTIVE DATE
1.1 Name of the Plan.
     NVR, Inc. (the “Company”) maintains the NVR, Inc. Employee Stock Ownership
Plan (the “Plan”), originally effective January 1, 1994, for the benefit of its
eligible Employees and the Employees of any Affiliated Company that adopts the
Plan in accordance with the terms of the Plan.
1.2 Purpose of the Plan.
     The Plan is designed to invest primarily in the capital stock of the
Company (“Stock,” as further defined in Section 2). To facilitate investments by
the Plan in Stock, the trustee (the “Trustee”) for the Plan and its related
trust (the “Trust”) is authorized to obtain loans and other extensions of credit
to finance the acquisition of Stock if directed to do so by the Company. Those
loans and extensions of credit, which shall be referred to as “Acquisition
Loans,” as further defined in Section 2, may be secured by the shares of Stock
acquired with the proceeds of those Acquisition Loans.
     The Company intends the Plan to constitute a stock bonus plan established
pursuant to section 401(a) of the Internal Revenue Code of 1986, as amended (the
“Code”), and intends the Plan to be funded with contributions by the Employer
that qualify for the income tax deduction provided under Code Section 404. The
Company also intends the Plan to constitute an employee stock ownership plan
under section 407(d)(6) of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”), and, to the extent that the acquisition of Stock is
financed through one or more Acquisition Loans, intends the Plan to constitute
an employee stock ownership plan under Code Section 4975(e)(7). The term
“Employer” as used in this Plan includes the Company and any Affiliated Company
(as defined in Section 2) that adopts the Plan and becomes a party to the Plan
and any Trust Agreement for the Plan with the approval of the Board of Directors
of the Company.

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1.3 Restatement of Plan.
     The Company desires to amend and restate the provisions of the Plan, as set
forth herein, effective through January 1, 2002, to reflect various changes,
including but not limited to the laws governing the Plan.
     Unless an earlier effective date is indicated in this document as required
by ERISA or the Code, the rights of any person whose status as a Member
terminated before January 1, 2002 shall be determined pursuant to the Plan, as
in effect on the date such employment terminated, unless a subsequently
provision of the Plan is made applicable to such person.

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2. DEFINITIONS
2.1 Definitions
          In this Plan the initially capitalized words shall have the following
meanings unless the context clearly requires otherwise:
          “Acquisition Loan” means a loan (or other extension of credit) made to
the Trustee for the purpose of financing the acquisition of Stock pursuant to
and in accordance with the Plan. An Acquisition Loan, if any, shall constitute
an extension of credit to the Trust Fund from a “party in interest” (as defined
in ERISA Section 3(14)) and fall within the scope of the exemptions set forth in
ERISA Section 408(b)(3) and Code Section 4975(d)(3).
          “Administrator” means the person or persons designated by the Company
pursuant to Section 10 to administer the Plan. In the absence of any
designation, the Company shall serve as Administrator through designated
representatives and agents.
          “Affiliated Company” means any member of a controlled group of
corporations of which the Employer is a member, or an unincorporated trade or
business or affiliated service group which is under common control with the
Employer as determined in accordance with Code Sections 414(b), 414(c) and
414(m) and regulations issued thereunder, or any other entity required to be
aggregated with the Employer pursuant to Code Section 414(o) and the regulations
promulgated thereunder.
          “Authorized Leave of Absence” means any absence authorized by the
Employer under its standard personnel practices, provided that all Employees are
treated alike in the authorization of absences.
          “Beneficiary” means the person or persons or trust or estate
designated by a Member pursuant to the NVR, Inc. Profit Sharing Plan to receive
any death benefit which may be payable under this Plan, or if the NVR Inc.
Profit Sharing Plan has been terminated and there is no successor plan, the
persons designated by the Member in accordance with Section 8.12 of the Plan.
          “Board of Directors” means the board of directors of NVR, Inc.
          “Break in Service” means a period of time commencing on the Member’s
Severance Date and ending on the date (if any) on which the Member returns to
active employment as an Employee.
          “Code” means the Internal Revenue Code of 1986, as amended.
          “Committee” means the Profit Sharing Committee appointed by the Board
of Directors to act on behalf of the Company in administering the Plan as
provided in Section 10.

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          “Company” means NVR, Inc. and its successors.
          “Compensation” means gross compensation paid during a Plan Year and
shall include all salary, bonuses, wages, Voluntary Salary Reduction
Contributions to the NVR, Inc. Profit Sharing Plan, Post-Tax Voluntary
Contributions to the NVR, Inc. Profit Sharing Plan, salary reduction
contributions made to the NVR, Inc. Flexible Benefit Plan (or successor plan),
overtime and commissions paid to a Member by the Employer, and other similar
payments, but shall not include expenses and reimbursements, the value of
noncash trips or prizes, credits and benefits under the NVR, Inc. Profit Sharing
Plan (other than Voluntary Salary Reduction Contributions and Post-Tax Voluntary
Contributions), any excess contributions made under this Plan which are returned
to a Member, or amounts contributed by the Employer to any employee pension,
welfare, or health insurance plan, or any taxable income to a Member
attributable to any present or future stock or deferred compensation plans. For
purposes of Section 6.4, in the case of a Member whose Employment Date is on or
after July 2, “Compensation” for the Plan Year in which the Member first
qualifies for membership under Section 3 shall include Compensation paid to such
Member by the Employer for the period commencing with the Member’s Employment
Date and ending on December 31 of the Plan Year that is previous to the Plan
Year that the Member first qualifies for membership. For each Plan Year, the
amount of a Member’s compensation that exceeds the Code Section 401(a)(17) limit
shall not be a part of Compensation. For the Plan Year commencing January 1,
2002, this dollar limit is $200,000.
          “Effective Date” means January 1, 2002, the date as of which this
amendment and restatement is effective, provided however, the provisions of this
amended and restated Plan are effective as early as January 1, 1997 where
reference is made to an earlier effective date.
          “Eligible Employee” means an Employee of an Employer who is paid on
the U.S. payroll of the Employer, except any Employee:
          (a) Who is included in a unit of Employees covered by a collective
bargaining agreement in which retirement benefits were the subject of good faith
bargaining and which does not expressly provide for his or her participation in
the Plan;
          (b) Who is a leased employee (within the meaning of Code
Section 414(n)); or
          (c) Who is a nonresident alien and who is not receiving any U.S.
source income from an Employer.
          An Eligible Employee shall not include any individual:
          (a) Who pursuant to an agreement between an Employer and a leasing
organization is performing services for the Employer but who does not otherwise
constitute a leased employee;

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          (b) Who is not classified by an Employer as an Employee (including,
but not limited to, an individual classified as an independent contractor) even
if such individual is later determined to be an Employee; or
          (c) Who is subject to a written agreement that provides that such
individual shall not be eligible to participate in the Plan.
          If, during any period, the Employer has not treated an individual as
an Employee and, for that reason, has not withheld employment taxes with respect
to that individual, then that individual shall not be an Eligible Employee for
that period, even in the event that the individual is later determined,
retroactively, to have been an Employee during all or any portion of that
period.
          “Eligible Member” means, for any Plan Year, a Member who during the
Plan Year is an Eligible Employee, completes at least 1,000 Hours of Service and
is an Employee on the last day of the Plan Year or, if terminated prior to the
end of the Plan Year, terminated due to death, Permanent and Total Disability
(determined in accordance with Section 8.2) or retirement.
          “Employee” means any person who receives remuneration for personal
services rendered to the Employer or an Affiliated Company or who would receive
such remuneration except for an Authorized Leave of Absence. The term Employee
includes any person who is a “leased employee” of the Employer (within the
meaning of Code Section 414(n)).
          “Employer” means the Company, its respective successors, and each
other corporation or business entity which has adopted this Plan for the benefit
of its Employees in the manner set forth in Section 12.5.
          “Employer Contributions” means the contributions made by the Employer
to the Plan pursuant to Section 4.1(a).
          “Employment Date” means the first day an Employee completes one Hour
of Service following employment or reemployment.
          “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended.
          “Five Percent Owner” means a Member who owns more than five percent
(5%) of the voting rights or value of the Company or any Affiliated Company. The
Committee shall determine which Members are Five Percent Owners in accordance
with Code Section 416(i)(1)(B)(i) and the regulations thereunder.
          “Financed Shares” means shares of Stock acquired by the Trust Fund
with the proceeds of an Acquisition Loan, whether or not pledged as collateral
to secure the repayment of that Acquisition Loan.

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          “Fiscal Year” means the Employer’s accounting year of twelve calendar
months, which is a calendar year.
          “Forfeiture” means the portion of a Member Account which is forfeited
due to termination of employment before full vesting.
          “Hour of Service” means each hour (1) for which an Employee is
directly or indirectly paid, or entitled to payment, by an Employer or an
Affiliated Company during a Plan Year (including periods of vacation, jury duty,
sickness, disability or Authorized Leave of Absence for which an Employee is
paid or entitled to payment), and (2) for which back pay (irrespective of
mitigation of damages) has either been awarded or agreed to by an Employer or an
Affiliated Company; provided that hours shall not be credited under both (1) and
(2) above. As an alternative to crediting Hours of Service on an hour for hour
basis, Hours of Service may be credited to all Employees in a consistent manner
at the rate of ten (10) hours per day if at least one Hour of Service would have
been credited during that day. In any event, no more than 501 Hours of Service
shall be credited under this Section on account of any single continuous period
during which an Employee performs no duties, and no Hours of Service shall be
credited if the payments are made or due either (a) under a Plan maintained
solely for the purpose of complying with applicable workmen’s compensation,
unemployment compensation or disability insurance law, or (b) to reimburse an
Employee solely for medical or medically related expenses incurred by the
Employee. Except as specifically provided herein, Hours of Service shall be
credited as provided in Department of Labor Regulation Section 2530.200b-2. The
provisions of the Department of Labor Regulation Sections 2530.200b-2(b) and (c)
are incorporated herein by reference.
          Any Employee who (i) is absent from work by reason of pregnancy, birth
of a child, placement of a child in connection with the adoption by the Employee
of such a child or for purposes of caring for such a child during the period
beginning immediately upon such birth or placement, (ii) does not otherwise
receive credit for such period under the preceding paragraph, and (iii)
furnishes the Committee in a timely manner with a written statement of the
number of days of absence and that such absence was for a purpose described
above shall receive credit for the number of hours which normally would have
been credited to such individual but for such absence, or in the event that the
Committee is unable to determine such number of hours, 8 hours of service per
day of absence; provided, that the number of hours credited by reason of any
such birth or placement shall not exceed 501. Hours of Service to be credited
pursuant to this paragraph shall be credited to the year in which the absence
begins, if the Employee would be prevented from incurring a One Year Break in
Service in such year solely because of the crediting of the hours attributable
to such absence or, in any other case, to the immediately succeeding year.
          Notwithstanding any other provision to the contrary, Hours of Service
will be credited in accordance with the requirements of Code Section 414(u) and
the Family Medical Leave Act.

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          If the Board of Directors so determines in its discretion, for
purposes of Sections 3.1 and 8.4, the term “Hour of Service” shall include
service that is performed by an individual on behalf of a corporation or other
business entity prior to the date such entity adopts the Plan in accordance with
Section 12.5, provided such service would be credited as Hours of Service if
performed for an Employer.
          “Lay-off” means the elimination of the Employee’s job by the Employer
or the Affiliated Company under circumstances in which company policy or a
collective bargaining agreement confers recall rights.
          “Member” means any Employee or former Employee who is participating in
this Plan or has any interest in the Trust Fund.
          “Member Account” means the separate account maintained for each Member
that represents the Member’s total interest in the Trust Fund, which account
shall be divided into two sub-accounts: the Stock Account and the Other
Investments Account.
          “NVR, Inc. Profit Sharing Plan” means the NVR, Inc. Profit Sharing
Plan (formerly called the Profit Sharing Plan of NVR, Inc. and Affiliated
Companies), as amended from time to time.
          “One Percent Owner” means a Member who owns more than one percent (1%)
of the Company or any Affiliated Company. The Committee shall determine which
Members are One Percent Owners in accordance with Code Section 416(i)(1)(B)(ii)
and the regulations thereunder.
          “Other Investments Account” means the sub-account of a Member Account
that reflects the Member’s interest in the Plan attributable to assets of the
Trust Fund other than Stock.
          “Plan” means the NVR, Inc. Employee Stock Ownership Plan consisting of
this document, as now in effect or hereafter amended from time to time.
          “Plan Year” means each 12-month period commencing January 1, and
ending December 31.
          “Permanent and Total Disability” means a physical or mental condition
occurring after an Employee becomes a Member and while employed by the Employer,
resulting from bodily injury, disease, or mental disorder that permanently
prevents the Member from performing the normal duties for which he or she is
employed. The disability of a Member shall be determined by a licensed physician
chosen by the Administrator. The determination shall be applied uniformly to all
Members.
          “Retirement Date” means the Member’s sixtieth (60th) birthday.

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          “Required Beginning Date” means the latest date benefit payments shall
commence to a Member. Such date shall mean:
          (a) With regard to a Member who is not a five-percent owner (within
the meaning of Code Section 416(i)), the April 1 that next follows the later of
(i) the calendar year in which the Member turns age 701/2, or (ii) the calendar
year in which the Member ceases to be an Employee; and
          (b) With regard to a Member who is a five-percent owner (within the
meaning of Code Section 416(i)), the April 1 that next follows the calendar year
in which the Member attains age 701/2.
          A Member shall be considered a five-percent owner for this purpose if
such Member is a five-percent owner with respect to the Plan Year in which he or
she attains age 701/2.
          “Severance Date” means the earlier of (a) the date the Employee quits,
retires, dies or is discharged or otherwise involuntarily terminated in a manner
that does not constitute a Lay-off or (b) the day next following a period of
twelve (12) consecutive months during which the Employee remained continuously
absent from active employment as an Employee for reason other than quit,
retirement, death, discharge or other non-Lay-off involuntary termination, such
as, for example, Authorized Leave of Absence, military leave as defined under
Code Section 414(u) or Lay-off. The Severance Date for an Employee who is absent
from active employment on account of long-term disability (within the meaning of
the Employer’s long-term disability policies) shall be the day next following
twelve (12) consecutive months of the absence on account of the disability.
          Solely for purposes of determining whether an Employee has commenced a
Break in Service, in the case of a Member who is absent from work by reason of
the Member’s pregnancy, by reason of the birth of the Member’s child, by reason
of the placement of a child with the Member in connection with the child’s
adoption by the Member or for purposes of caring for a child beginning
immediately after such birth or placement, the Severance Date means the second
anniversary of the first day of such absence. The preceding sentence shall apply
only if a Member demonstrates to the Employer on a timely basis that his or her
absence is caused by one of the specified reasons. The period between the first
and second anniversaries of the first day of such absence is neither counted
towards a Year of Service nor counted towards a Break in Service.
          “Stock” means shares of common stock issued by NVR, Inc., that are
readily tradable on an established securities market or that otherwise
constitute “employer securities” within the meaning of Code Section 409(1) and
“qualifying employer securities” within the meaning of Code Section 4975(e)(8)
and ERISA Section 407(d)(5).

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          “Stock Account” means the sub-account of a Member Account that
reflects the Member’s interest in Stock that is held in the Trust Fund.
          “Total Break in Service” means, with respect to a Member who upon
ceasing to be an Employee is not vested in his or her Member Account, a Break in
Service that is not less than the greater of (a) sixty (60) consecutive months
or (b) the number of Years of Service (including fractional periods) completed
by the Member prior to such Break in Service.
          “Trust” means the Trust maintained in accordance with the Trust
Agreement, as it amended from time to time.
          “Trust Agreement” means the Trust Agreement for the Plan, entered into
by the Company with the Trustee, or as the same may hereafter be further amended
from time to time.
          “Trust Fund” means the Stock, cash, and other assets of the Plan held
by the Trustee for the benefit of the Members and their Beneficiaries pursuant
to the Trust Agreement.
          “Trustee” means the trustee under the Trust Agreement and its
successors in trust selected by the Board of Directors.
          “Valuation Date” means each business day of each Plan Year.
          “Year of Service” means a credit used to determine a Member’s vested
percentage under Section 8.3 hereof. A Member’s Years of Service shall be
determined by dividing the number of full calendar months in the period of
eligibility service (defined below) by twelve (12). Any partial month in a
period of eligibility service shall be converted to a fraction of a year by
dividing the number of days in such partial month by 360. A Member’s period of
eligibility service shall begin on his or her Employment Date and shall end on
the Member’s Severance Date. A Member’s period of eligibility service includes
any Authorized Leave of Absence and any military leave as defined by Code
Section 414(u). In determining a Member’s period of eligibility service, the
following rules shall be applied:
          (a) In the case of an Employee who quit, was discharged or retired
during a leave of absence of twelve (12) months or less and then performs an
Hour of Service within twelve (12) months of the date on which the Employee
commenced the leave of absence, eligibility service shall include the period
commencing as of the date of the Employee’s quit, discharge or retirement.
Otherwise, in the case of an Employee who quit, retired, or was discharged, his
or her period of eligibility service shall include the period following such
quit, retirement, or discharge, if he or she is rehired as an Employee within
twelve (12) months after the date he or she first became absent from active
employment (whether by reason of such quit, retirement, or discharge or any
other reason);

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          (b) In the case of an Employee who incurred a Total Break in Service,
any periods of eligibility service prior to any such Total Break in Service,
shall be disregarded. Otherwise, in the case of a re-employed Employee, all of
his or her separate periods of eligibility service shall be aggregated and
treated as a single continuous period of eligibility service;
          (c) If the Board of Directors so determines in its discretion, for
purposes of Section 8.4, the term eligibility service shall include Service that
is performed by an individual on behalf of a corporation or other business
entity prior to the day such entity adopts the Plan in accordance with
Section 12.5, provided such service would be credited as eligibility service if
performed for an Employer; and
          (d) An Employee’s period of eligibility service shall be determined by
the Employer on the basis of employment records or on such other reasonable and
nondiscriminatory basis as it may adopt. The Employer, pursuant to written
rules, may recognize as eligibility service any period not otherwise described
in this definition, subject to such conditions and limitations it may adopt.

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3. MEMBERSHIP
3.1 Eligibility.
     (a) An Employee shall become a Member on the later of his or her Employment
Date or the date the Employee becomes an Eligible Employee.
     (b) In the case of a corporation or other business entity that adopts the
Plan on or after March 1, 1999 under the provisions of Section 12.5, any
individual who was an employee of such organization immediately prior to the
date of such adoption will become a Member on the date his employer adopts the
Plan if the Board of Directors so determines in its discretion and if the
individual otherwise is an Eligible Employee under this Plan and has satisfied
the criteria of Section 3.1(a).
     (c) In the event another entity is or will be merged or consolidated with
the Company or an Employer on or after March 1, 1999, or if the Company or an
Employer acquires or will acquire all or substantially all of the assets or
outstanding voting stock of another entity on or after that date, any individual
who is an employee of the merged or acquired entity immediately prior to such
event and who becomes an Employee of the Company or Employer as part of such
acquisition, merger or consolidation, will become a Member on the date he or she
becomes an Eligible Employee and otherwise satisfies the criteria of Section
3.1(a) if the Board of Directors so determines in its discretion.
3.2 Notice.
     The Employer shall give notice to every Eligible Employee, before he or she
becomes an Eligible Member for the first time, of the existence of this Plan and
of such Eligible Employee’s participation therein. Such notice shall be given
within such period and in such form as is required by law.
3.3 Reemployment.
     An Employee who was a Member, but who ceased to be a Member shall be
entitled to again become a Member as of the Employment Date coinciding with the
Member’s reemployment as an Eligible Employee.

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4. CONTRIBUTIONS
4.1 In General.
     (a) Employer Contributions. For each Plan Year during which the Plan is in
effect, an amount determined from time to time by the Board of Directors, in its
sole discretion, that shall be contributed to the Plan on behalf of the Eligible
Members. Employer Contributions under the Plan are made by the Company.
     (b) Required Contributions. Notwithstanding the foregoing, however, the
aggregate Employer Contributions for a Plan Year must not in any event exceed
the maximum amount allowable as a deduction to the Employer under the provisions
of Code Section 404, except as required pursuant to Section 4.3 below. The
aggregate Employer Contributions for a Plan Year, however, must equal or exceed
the sum of any required principal and interest payments on all Acquisition
Loans.
4.2 Form and Time of Employer Contributions.
     Employer Contributions, if any, for each Plan Year shall be paid to the
Trustee at such times as the Employer may determine; however, all Employer
Contributions and Matching Contributions must be paid to the Trustee no later
than the time prescribed by law, including permitted extensions of time, for the
filing of the Employer’s federal income tax return for the Fiscal Year with
respect to which the Employer Contributions is made. Employer Contributions may
be paid to the Trustee in cash, in shares of Stock (including Treasury shares or
authorized but unissued shares), or other property, as determined by the Board
of Directors in its sole discretion; provided, however, that Employer
Contributions shall be paid to the Trustee in cash in such amounts and at such
times as may be needed to provide the Trust Fund with cash sufficient to pay any
currently maturing debt service obligation (including interest as well as
principal) of the Trust Fund with respect to any outstanding Acquisition Loans.
If and to the extent that Employer Contributions are made in shares of Stock,
the value of the shares of such Stock for purposes of determining the amount of
Employer Contributions shall be determined in accordance with paragraphs (a) and
(b).
     (a) If there is a generally recognized market for the Stock, the value of
the shares of Stock is either (i) the price of the Stock prevailing on a
national securities exchange that is registered under Section 6 of the
Securities Exchange Act of 1934 or (ii) if the Stock is not traded on a national
securities exchange, a price no less favorable to the Plan than the offering
price for the Stock as established by the current bid and asked prices quoted by
persons independent of NVR, Inc., and of any party in interest (within the
meaning of ERISA Section 3(14)).
     (b) If there is no generally recognized market for the stock, the value of
the shares of Stock shall be the fair market value of the shares at the time of
transfer of the shares to the Plan, determined in good faith and based upon all
relevant factors as of the date of the transfer, which good faith determination
shall be based upon an appraisal independently arrived at by an independent
appraiser (within the meaning of Code Section 401(a)(28)(C).

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4.3 Omission of Eligible Employee; Inclusion of Ineligible Employee.
     If for any Plan Year any Eligible Employee who should be included as a
Member in the Plan is erroneously omitted and discovery of that omission does
not occur until after Employer Contributions to the Plan by the Employer for the
Plan Year has been made and allocated as provided for in Section 6.4, a later
Employer Contribution shall be made to the Plan with respect to that omitted
Employee in the amount, if any, that would have been allocated to that Employee
had he or she not been omitted. The contribution must occur without regard to
whether or not it is deductible (in whole or in part) by the Employer under the
applicable provisions of the Code. If for any Plan Year any Employee or other
person who should not have been included as a Member in the Plan is erroneously
included as a Member and discovery of that inclusion does not occur until after
the Employer Contribution for that Plan Year has been made and allocated, the
Employer is not entitled to recover the contribution made for that ineligible
person, regardless of whether or not a deduction is available for that
contribution. In such event, the amount that was contributed for that ineligible
person shall be forfeited from the ineligible person’s Account for the Plan Year
in which the erroneous inclusion is discovered and is reallocated within a
reasonable period thereafter to Members eligible to share in the allocation of
Employer Contributions for the Plan Year in which the forfeiture occurs.
4.4 Member Contributions.
     No Member is required or permitted to make contributions to this Plan.

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5. INVESTMENT OF TRUST ASSETS; ACQUISITION LOANS
5.1 Investment of Trust Fund.
     The Plan is designed to invest primarily in Stock. The Trustee shall invest
the Trust Fund in accordance with the Trust Agreement and the applicable
provisions of the Code, ERISA, and any other laws affecting tax qualified
pension benefit plans designed to qualify as employee stock ownership plans. The
Trustee may purchase shares of Stock in the open market (including from former
Members and Beneficiaries) or from the Employer, as the Company determines
appropriate; provided, however, that no shares of Stock purchased with the
proceeds of an Acquisition Loan shall be purchased from the Employer (other than
the Company) or any Affiliate. All purchases of shares of Stock by the Trustee
shall be made at prices that do not exceed the fair market value of such shares,
as determined in good faith by the Trustee in accordance with Section 4.2.
5.2 Acquisition Loans.
     The Company may direct the Trustee to incur Acquisition Loans from time to
time to finance the acquisition by the Trust Fund of shares of Stock or to repay
a prior Acquisition Loan. An Acquisition Loan may be made by a “party in
interest” (as defined in ERISA Section 3(14)) and may be guaranteed by the
Company or one or more Affiliates. Any Acquisition Loan must be primarily for
the benefit of the Members and their Beneficiaries. In furtherance of the
foregoing, the interest rate payable with respect to any Acquisition Loan and
the price of any Stock to be acquired with the proceeds thereof must not be such
that the Trust Fund might be “drained off” (as such term is used in the
applicable regulations under Code Section 4975), and the terms of any
Acquisition Loan, whether or not the lender is a “party in interest” (as defined
in ERISA Section 3(14)), must at the time such Acquisition Loan is made be at
least as favorable to the Trust Fund as the terms of a comparable loan resulting
from arm’s length negotiations between independent parties.
     An Acquisition Loan must be for a specific term, must bear a reasonable
rate of interest, and must not be payable upon demand except in the event of a
default; however, if the lender of the Acquisition Loan is a “disqualified
person” within the meaning of Code Section 4975(e)(2), the Acquisition Loan must
be payable upon demand in the event of a default only to the extent of any
default in any required payments due and payable under that Acquisition Loan
(without regard to any rights of acceleration on the part of the lender). An
Acquisition Loan may be secured by a collateral pledge of the Financed Shares
acquired with the proceeds of that Acquisition Loan (or any prior Acquisition
Loan repaid with the proceeds from the Acquisition Loan). No other assets of the
Trust Fund (including any other shares of Stock held as part of the Trust Fund)
may be pledged as collateral for an Acquisition Loan, and no Acquisition Loan
lender shall have recourse against the Plan, the Trustee, or any assets of the
Trust Fund, other than the Financed Shares pledged to secure such Acquisition
Loan and not released from that pledge as provided in this Section 5.2. Any
pledge of Financed Shares as collateral for an Acquisition Loan shall provide
that the value of the Financed Shares that are subject to that pledge and are
transferred in satisfaction of the Acquisition Loan upon a default on that
Acquisition Loan must not exceed the amount of that default. Any pledge of
Financed Shares as collateral for an Acquisition Loan must also provide for the
release of the Financed Shares so pledged on a pro-rata basis as principal and
interest on such Acquisition Loan is paid by the Trustee.

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     Unless the Trustee elects to apply the special rule for releasing Financed
Shares under Treasury Regulation Section 54.4975-7(b)(8)(ii), the number of
Financed Shares to be released from any such pledge in any Plan Year will be
determined by multiplying (i) the total number of Financed Shares subject to
that pledge immediately prior to the release for such Plan Year by (ii) a
fraction, the numerator of which is the amount of principal and interest paid on
that Acquisition Loan for the Plan Year and the denominator of which is the sum
of the numerator plus all principal and interest to be paid with respect to that
Acquisition Loan for all future years of the term of that Acquisition Loan
(without regard to any possible extensions or renewal periods). For purposes of
the preceding sentence, in the event that the interest rate payable with respect
to such Acquisition Loan is variable, the interest to be paid in future years
shall be determined using the interest rate in effect on the last day of the
Plan Year for which the determination is made.
     If the Trustee elects to apply the special rule for releasing Financed
Shares, the number of Financed Shares to be released from encumbrance is
determined solely with reference to principal payments. The following
requirements shall apply if the Trustee elects to apply the special rule for
releasing Financed Shares: (i) the acquisition Loan must provide for annual
payments of principal and interest at a cumulative rate that is not less rapid
at any time than level annual payments of the amount for ten years; (ii) the
interest included in any payment is disregarded only to the extent that it would
be determined to be interest under standard loan amortization tables; and
(iii) the special rule shall become inapplicable from the time that by reason of
a renewal, extension, or refinancing the sum of the expired duration of the
Acquisition Loan, the renewal period, the extension period, and the duration of
a new Acquisition Loan exceeds ten years.
     Payments of principal or interest on any Acquisition Loan must be made by
the Trustee (as directed by the Administrator) only from: (i) Employer
Contributions paid in cash to enable the Trustee to repay the Acquisition Loan,
(ii) any earnings of the Trust Fund attributable to such Employer Contributions,
(iii) any cash dividends received by the Trust Fund on Financed Shares pledged
to secure the repayment of the Acquisition Loan and any cash dividends on Stock
already allocated to Member Accounts under the Plan, to the extent the Trustee
allocates additional Stock to the Member Accounts in accordance with Code
Section 404(k)(2)(B), and (iv) the proceeds from any sale of Financed Shares
held in the Acquisition Loan Suspense Account (as defined in Section 6.2).
Payments of principal or interest for any Acquisition Loan during any Plan Year
must not exceed (x) the sum of the following for that Plan Year and all prior
Plan Years: the aggregate Employer Contributions paid in cash to enable the
Trustee to repay one or more Acquisition Loans; any earnings of the Trust Fund
attributable to such Employer Contributions; any cash dividends received by the
Trust Fund on Financed Shares pledged to secure one or more Acquisition Loans
and any cash dividends on Stock already allocated to Member Accounts under the
Plan, to the extent the Trustee allocates additional Stock to the Member
Accounts in accordance with Code Section 404(k)(2)(B); and the proceeds from any
sale of Financed Shares held in the Acquisition Loan Suspense Account (as
defined in Section 6.2), less (y) all payments of principal or interest made
with respect to Acquisition Loans in earlier Plan Years.

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6. MEMBER’S ACCOUNTS
6.1 Maintenance of Member Accounts.
     The Administrator must establish and maintain in the name of each Member a
Member Account, which shall be composed of two sub-accounts: a Stock Account and
an Other Investments Account. The Administrator must credit to the Member
Accounts as of each Valuation Date all amounts allocated to each Member as
described in the remainder of Section 6.
6.2 Stock Accounts: Acquisition Loan Suspense Account.
     (a) The Stock Account for each Member must be credited annually, or more
frequently as determined by the Committee, with (i) the Member’s allocable
shares of Stock (including fractional shares) attributable to Employer
Contributions (including contributions in kind) or earnings thereon or with
amounts held in the Member’s Other Investments Account and (ii) with any stock
dividends received during the Plan Year on Stock allocated to the Member’s Stock
Account or Other Investments Account. Forfeitures of Stock occurring during the
Plan Year are credited to Eligible Members’ Member Accounts annually.
     (b) Any Financed Shares acquired with the proceeds of an Acquisition Loan
or a prior Acquisition Loan refinanced with a new Acquisition Loan, whether or
not pledged to secure repayment of an Acquisition Loan, must be credited to a
separate account (the “Acquisition Loan Suspense Account”) and not to any Stock
Account. A number of shares of Stock equal to the number of Financed Shares
released from the pledge securing the repayment of an Acquisition Loan, as
provided for in Section 5.2 (or, in the case of Financed Shares credited to the
Acquisition Loan Suspense Account that are not pledged to secure repayment of an
Acquisition Loan, that would have been so released had those Financed Shares
been so pledged), must be withdrawn from the Acquisition Loan Suspense Account
as of the Valuation Date for the Plan Year for which the release occurs (or
would have occurred) and must be allocated to the Member Accounts of the Members
as of that Valuation Date in the manner provided for in Section 6.4.
6.3 Other Investments Account.
     The Other Investments Account maintained for each Member shall be credited
(or debited) on each Valuation Date (i) with the Member’s allocable share of the
net income (or loss) of the Trust Fund, (ii) with any cash dividends received
during the Plan Year on Stock allocated to the Member’s Stock Account, and
(iii) with Employer Contributions made in cash. Each Other Investments Account
will be debited for its share of any cash payments made for the acquisition of
Stock or for the repayment of principal and interest on an Acquisition Loan.
Forfeitures from Other Investment Accounts will be credited to Eligible Members’
Member Accounts annually.

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6.4 Allocations to Member Accounts.
     The allocations to Member Accounts for each Plan Year, subject to
Sections 6.5 and 6.6, must occur in accordance with this Section 6.4. The
Employer must provide the Administrator with all the information required by the
Administrator to make a proper allocation in accordance with this Section 6.4.
     (a) Employer Contributions. Employer Contributions for any Plan Year shall
be allocated proportionately among the Eligible Members as of the last day of
such Plan Year in the following manner:
          The amount of each Eligible Member’s share of Employer Contributions
for each Plan Year shall be separately determined by dividing the Eligible
Member’s Compensation by the aggregate amount of Compensation paid to all
Eligible Members who are entitled to share in such Contributions, respectively,
and multiplying the quotient by the amount of the Employer Contribution, if any,
for that Plan year.
          Compensation for purposes of this Section 6.4 means the Compensation
paid to a Member for the portion of the Plan Year during which the Member is
eligible to participate under the Plan. As determined by the Board of Directors
in its discretion, Compensation for purposes of this Section may include any
amounts received by a Member from their employer prior to the date such employer
adopts the Plan in accordance with Section 12.5 if such amounts would have been
included as Compensation for the Plan Year if the Member was employed by an
Employer.
          To the extent that the Employer Contribution made for any Plan Year is
applied to purchase Stock or is applied to pay principal or interest on an
Acquisition Loan, with the result that shares of Stock are released from the
Acquisition Loan Suspense Account, the shares of Stock so purchased or released
shall be allocated among the Member Accounts of the Members in the same manner
and proportion as Employer Contributions would be allocated. To the extent that
Employer Contributions made for any Plan Year is not applied to purchase Stock
or to pay principal or interest on an Acquisition Loan, the Employer
Contributions shall be allocated among the Member Accounts of the Members in the
manner set forth above.
     (b) Forfeitures. As of the last day of the Plan Year, any amounts that
became Forfeitures since the last day of the prior Plan Year shall be allocated
among the Eligible Member Accounts by dividing each Eligible Member’s
Compensation by the aggregate amount of Compensation paid to all Eligible
Members who are entitled to share in such Forfeitures, respectively, and
multiplying the quotient by the amount of the Forfeitures, if any, for that Plan
Year.
          In the event the allocation of Forfeitures provided for herein shall
cause the “annual addition” (as defined in Section 6.5(a)) to any Member Account
to exceed the amount allowable by the Code, the excess amount shall be
reallocated as additional Forfeitures among all other Members who otherwise
share in the allocation of Forfeitures for such Plan Year.

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          Only Compensation paid to a Member for the portion of the Plan Year
during which the Member is eligible to participate under the Plan shall be
considered for purposes of determining a Member’s allocable share of
Forfeitures. To the extent that any Forfeitures for any Plan Year consist of
Stock, such Stock shall be allocated to the Stock Accounts of the Members
sharing in such Forfeitures in the manner set forth above. Any Forfeitures from
Other Investments Accounts shall be allocated among the Other Investments
Accounts of the Members sharing in such Forfeitures in the manner set forth
above.
          As determined by the Board of Directors in its discretion,
Compensation for purposes of this Section may include any amounts received by a
Member from their employer prior to the date such employer adopts the Plan in
accordance with Section 12.5 if such amounts would have been included as
Compensation for the Plan Year if the Member was employed by an Employer.
     (c) Dividends. Any stock dividends received with respect to Stock must be
credited pro rata to the Member Accounts (or, in the case of Financed Shares
securing the repayment of an Acquisition Loan, to the Acquisition Loan Suspense
Account) to which the corresponding shares of Stock on which the stock dividends
are received are allocated as of the record date for which the stock dividends
are declared.
          Any cash dividends received on shares of Stock allocated to the Stock
Accounts as of the record date on which the dividends are declared shall be
allocated to the Member Accounts of the Members to whose Member Accounts those
shares of Stock are allocated as of the record date for which such cash
dividends are declared, unless the cash dividends are applied to pay principal
or interest on an Acquisition Loan as described in Code
Section 404(k)(2)(A)(iii). Any cash dividends received on shares of Stock either
not allocated to Member Accounts or not allocated to the Acquisition Loan
Suspense Account as of the record date for which the dividends are declared
shall be included in the computation of net income (or loss) of the Trust Fund
and allocated as set forth in Section 6.4(d) below; however, to the extent that
any cash dividends on Stock held under the Plan are applied to pay principal or
interest on an Acquisition Loan, with the result that shares of Stock are
released from the Acquisition Loan Suspense Account, the shares of Stock so
released must be allocated among the Stock Accounts of the Members in the same
proportion that the balance of the Member Account of each Member bears to the
balance of the Member Accounts of all Members, determined in each case as of the
immediately preceding Valuation Date (reduced in each case by the amount of any
distributions from any Member Accounts since that Valuation Date).
     (d) Net Appreciation (or Depreciation) of the Value of the Trust Fund. As
of each Valuation Date, before the allocation of any contributions as of such
date, any net appreciation (or net depreciation) in the value of the Trust Fund
(taking into account expenses of the Plan, and excluding cash dividends on
shares of Stock allocated to the

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Stock Accounts of the Members as of the record date for which those dividends
are declared, cash dividends on shares of Stock allocated to the Acquisition
Loan Suspense Account as of the record date for which the dividends are declared
to the extent that those dividends are applied to pay principal or interest on
an Acquisition Loan, and any other amount applied to pay principal or interest
on an Acquisition Loan) must be allocated among the Stock Accounts and the Other
Investments Accounts of the Members in the same proportion that the balances of
the Stock Account and the Other Investments Account of each Member bears to the
aggregate balance of the Stock Accounts and Other Investments Accounts of all
the Members, determined in each case as of the immediately preceding Valuation
Date (reduced in each case by the amount of any distributions from such Member
Accounts since the preceding Valuation Date). As of each Valuation Date the
Trustee shall charge the Member Accounts of each Member with an allocable share
of the expenses incurred by the Plan since the previous Valuation Date, using
the method that the Trustee deems reasonable and equitable under the
circumstances, consistent with the overall intent that general expenses of the
Plan should be shared ratably in accordance with the relative balances of each
of the Member Accounts and any sub-accounts of the Member Accounts and that
special expenses attributable to a particular component of the Plan should be
attributed to the component of the Plan that gave rise to the expenses.
     (e) Members Whose Employment Terminates During Plan Year. Notwithstanding
anything set forth in this Section 6.4 to the contrary, a Member whose
employment terminates with the Employer during the Plan Year for any reason or
whose employment terminated at any earlier time but has not yet received a
distribution of that Member’s entire interest under the Plan shall share in the
allocations provided for in Sections 6.4(c) and 6.4(d), regardless of whether or
not the Member received Compensation during the Plan Year or of the number of
Hours of Service that the Member completed during that Plan Year.
6.5 Maximum Benefit and Contribution Limitations — In General.
     (a) Definitions. For purposes of this Section 6.5, the following words and
phrases shall have the meanings set forth in clauses (i) through (iii).
          (i) “Annual Addition” means, with respect to a Member, the sum of:
               (1) the amount of the Employer Contributions allocated to the
Member’s Member Account under this Plan and all employer contributions made on
the Member’s behalf to all other Defined Contribution Plans (as defined below)
for that Plan Year; however, to the extent permitted by Code Section 415(c)(6),
the portion, if any, of the Employer Contribution applied to pay interest on one
or more Acquisition Loans not later than the time prescribed by law (including
permitted extensions of time) for filing the Employer’s federal income tax
return for the Fiscal Year for which the Employer Contribution is made shall not
be taken into account for purposes of this clause (1);
               (2) the sum of all of the Member’s employee contributions to all
Defined Contribution Plans for the Plan Year;

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               (3) the sum of the Member’s allocable share of all forfeitures
under all Defined Contribution Plans for the Plan Year; however, to the extent
permitted by Code Section 415(c)(6), forfeitures shall not be taken into account
for purposes of this clause (3) to the extent that the forfeitures consist of
shares of Stock purchased with the proceeds of one or more Acquisition Loans
under this Plan; and
               (4) any amount described in Code Sections 419A(d)(2) or 415(l)(1)
for the Plan Year, except that the limitations on annual additions shall not
apply to any contributions for medical benefits after separation from service
(within the meaning of Code Section 401(h) or 419(f)(2)) which otherwise would
be treated as an annual addition.
          (ii) “Defined Benefit Plan” means any employee pension plan
established by the Employer or any Affiliated Corporation and qualified under
Code Section 401, other than a Defined Contribution Plan.
          (iii) “Defined Contribution Plan” means the Plan and any employee
pension plan established by the Employer or any Affiliates and qualified under
Code Section 401 that provides for an individual account for each Member and for
benefits based solely on the amounts contributed to the Member’s account, any
income, expenses, gains, and losses, and any forfeitures of accounts of other
Members that are allocated to the Member’s account.
     (b) Combining of Plans. For purposes of the limitations of this
Section 6.5, all Defined Benefit Plans (whether or not terminated) of the
Employer and all Affiliates are treated as one Defined Benefit Plan, and all
Defined Contribution Plans (whether or not terminated) of the Employer and all
Affiliates are treated as one Defined Contribution Plan.
     (c) Limitation for this Plan. Regardless of any other provision of this
Plan, the total of the Annual Addition for a Member for any Plan Year shall not
exceed the following amounts:
          (i) For Plan Years before January 1, 2002, the lesser of thirty
thousand dollars ($30,000) (as adjusted pursuant to Code Section 415(d)), or 25%
of the Compensation of such Member for that Plan Year.
          (ii) For Plan Years beginning after December 31, 2001, the lesser of
forty thousand dollars ($40,000) (as adjusted pursuant to Code Section 415(d))
or 100% of the Compensation of such Member for that Plan Year.
          If for any Plan Year the limitation of this Section 6.5(c) is exceeded
for any Member, then to the extent necessary to eliminate the excess, after
first applying the relevant provisions of all other Defined Contribution Plans
that are applicable in the event any such excess arises, the amount of Employer
Contributions allocated to the

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Member Account of that Member is reduced and the amount of the reduction is
allocated and reallocated to the Member Accounts of the other Members as
provided for in Section 6.4(a) above to the extent possible without causing the
limitations of this Section 6.5(c) to be exceeded for those other Members, and
to the extent that the amount of any such reduction cannot be allocated to the
Member Accounts of the other Members by reason of those limitations, the
unallocated amount is credited to and held in a “suspense account” and is
allocated and reallocated to the Member Accounts of the Members for the next
Plan Year pursuant to Section 6.4(a) before the allocation of the Employer
Contributions for that Plan Year.
     (d) Limitation on Benefits if Covered under this Plan and a Defined Benefit
Plan. For Plan Years beginning prior to December 31, 1999, in addition to the
limitation in Section 6.5(c), if a Member in this Plan is also included in a
Defined Benefit Plan maintained by the Employer or an Affiliate, the maximum
amount that may be allocated to the Member’s Member Account in any Plan Year and
the Member’s projected annual benefit under the Defined Benefit Plan are limited
as follows:
          (i) First, there shall be computed for the Defined Contribution Plan
for each Plan Year a fraction (the “Defined Contribution Fraction”), the
numerator of which is the sum of all of the Annual Additions under this Plan and
under all other Defined Contribution Plans determined as of the close of such
Plan Year and the denominator of which is the sum of the lesser of the following
amounts for such Plan Year and for each prior Plan Year of the Member’s
employment with the Employer or an Affiliate:
               (1) the product of 1.25 multiplied by the dollar limitation in
effect under Code Section 415(c)(l)(A) (determined without regard to Code
Section 415(c)(6)) for that Plan Year, or
               (2) the product of 1.4 multiplied by 25% of the Member’s
compensation (as defined in Code Section 415(c)(3)) for that Plan Year;
          (ii) Second, there shall be computed for the Defined Benefit Plan for
each Plan Year a fraction (the “Defined Benefit Fraction”), the numerator of
which is the Member’s projected annual benefit (within the meaning of Code
Section 415(e)(2)(A)) under the Defined Benefit Plan determined as of the close
of such Plan Year and the denominator of which is the lesser of the following
amounts:
               (1) the product of 1.25 multiplied by $90,000 (as adjusted as of
January 1 of each calendar year by the Commissioner of Internal Revenue for that
calendar year pursuant to Code Sections 415(b)(1)(A) and 415(d)) or
               (2) the product of 1.4 multiplied by 100% of the Member’s average
compensation for the Member’s high three years of membership in the Defined
Benefit Plan (as defined in Code Section 415(b)(3)).

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          (iii) Third, the Defined Contribution Fraction and the Defined Benefit
Fraction for such Plan Year must be totaled and if the resulting sum is more
than one, then to the extent necessary to produce a Defined Contribution
Fraction and a Defined Benefit Fraction for the Plan Year that when added
together will equal one, the Administrator must take the actions listed below in
the indicated order.
               (1) Apply the relevant provisions of all Defined Benefit Plans
that are applicable in the event that any such excess arises.
               (2) Apply the relevant provisions of all other Defined
Contribution Plans that are applicable in the event that any such excess arises.
               (3) Reduce the amount of Employer Contributions allocated to the
Member Account of such Member to the extent necessary to eliminate such excess,
and allocate and reallocate the amount of any such reduction to the Member
Accounts of the other Members as provided for in Section 6.4(a), to the extent
possible without causing the limitations of this Section 6.5(d) to be exceeded
for such other Members, and to the extent that the amount of any such reduction
cannot be allocated to the Member Accounts of the other Members by reason of
such limitations, to credit such unallocated amount to a “suspense account” and
to allocate and reallocate such amount to the Member Accounts of the Members for
the next Plan Year pursuant to Section 6.4(a) before the allocation of Employer
Contributions for such Plan Year.
6.6 Allocations after Nonrecognition Sale to ESOP.
     (a) Application of Section. The provisions of this Section 6.6 apply to
Stock acquired by the Plan in a sale to which the special nonrecognition rules
in Code Section 1042 apply and limit other allocation provisions in this Plan.
     (b) No accrual. No portion of the assets held under the Plan attributable
to or allocable in lieu of Stock described in Section 6.6(a) may accrue or be
allocated directly or indirectly under any employee stock ownership plan
maintained by the Employer or an Affiliate to the benefit of a person described
in clauses (i) through (iii).
          (i) During the Nonallocation Period (as defined in Section 6.6(c)), no
accrual or allocation may occur for the benefit of a taxpayer who elected to
apply the nonrecognition rules to a sale of Stock under Code Section 1042.
          (ii) Except as provided in Section 6.6(d), during the Nonallocation
Period, no accrual or allocation may occur for the benefit of an individual who
is related (within the meaning of Code Section 267(b)) to a person described in
clause (i).
          (iii) No accrual or allocation may occur for the benefit of any person
who owns (after applying the constructive ownership rules in Code
Section 318(a), but without regard to the employee trust exception in Code
Section 318(a)(2)(B(i)) more than twenty-five percent of any class of
outstanding stock or more than twenty-five percent of

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the total value of any class of outstanding stock of the Company or of any
corporation that is a member of the controlled group (within the meaning of Code
Section 409(1) (4)) of the Company.
     (c) Nonallocation Period. The Nonallocation Period is the period beginning
on the date of the sale of the Stock to the Plan and ending on the later of the
date that is ten years after the date of the sale, or the date of the Plan’s
allocation attributable to the final payment of acquisition indebtedness
incurred in connection with that sale.
     (d) Lineal descendants. The prohibition under Section 6.6(b)(ii) does not
apply to an individual who satisfies both (i) and (ii) of this Section 6.6(d).
          (i) The individual is a lineal descendant of the taxpayer who elected
to apply the nonrecognition rules to a sale of Stock under Code Section 1042.
          (ii) The aggregate amount allocated to the benefit of all lineal
descendants described in (i) during the Nonallocation Period does not exceed
five percent of the Stock (or the amounts allocated in lieu of Stock) held by
the Plan that are attributable to a sale to the Plan by any person related
(within the meaning of Code Section 267(c)(4)) to those descendants through a
nonrecognition transaction described in Code Section 1042.
     (e) Twenty-five percent shareholders. For purposes of this Section 6.6, a
person does not own more than twenty-five percent of a corporation if the person
fails the percentage-ownership requirement at any time during the one-year
period ending on the date of the sale of the Stock to the Plan or if the
individual fails the percentage-ownership requirement on the date as of which
the acquired Stock is allocated to the Member’s Member Accounts.

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7. VOTING RIGHTS; EXPENSES; STOCK PURCHASE RIGHTS, ETC.
7.1 Voting Rights.
     Each Member shall have the right to direct the Trustee as to the manner in
which to vote shares (including fractional shares) of Stock allocated to the
Member’s Member Account (“Allocated Shares”), and the Trustee shall vote the
shares of Stock in accordance with the respective Member’s directions, to the
extent not inconsistent with Section 403(a) of ERISA. With respect to any
fractional shares allocated to any Member’s Member Account, the Trustee is
deemed to have voted the fractional shares in accordance with the directions of
the Members if it votes the combined fractional shares allocated to the Members’
Member Accounts to the extent possible to reflect the directions of the voting
Members. Each Member is a named fiduciary under the Plan for purposes of
directing the Trustee as to the voting of Allocated Shares.
     If, and to the extent that, a Member fails to direct the Trustee to vote
the Allocated Shares, the Trustee shall vote those shares. The Trustee shall
vote shares of Stock that are not Allocated Shares (“Unallocated Shares”) held
as part of the Trust Fund but not required to be allocated to the Members’
Member Accounts (including, for example, shares of Stock allocated to the
Acquisition Loan Suspense Account or to the “suspense accounts” provided for in
Sections 6.5(c) and 6.5(d)(iii)(3)).
     The Company shall furnish or cause to be furnished to the Trustee and to
Members appropriate notices and information statements when the voting rights of
this Section 7.1 are to be exercised. The notices and information statements
shall conform to the requirements of applicable federal and state law and by the
Company’s articles of incorporation and by-laws.
     Any other rights with respect to shares of Stock that are held as part of
the Trust Fund that are ordinarily exercisable by the holders of shares of
Stock, including for example, without limitation, any dissenters’ appraisal
rights or a decision whether or not to tender shares of Stock in response to a
tender offer therefore, must be exercised by the Trustee in a manner consistent
with the voting right requirements of this Section 7.1.
7.2 Expenses.
     (a) Expenses of Administration and Operation. All expenses of establishing
and administering the Plan and the Trust Fund (including, without limitation,
compensation payable to the Trustee under the terms of the Trust Agreement,
reasonable expenses, including legal fees and disbursements, incurred by the
Employer, the Administrator, the Committee and the Trustee related to
establishing and administering the Plan and the Trust Fund, and all taxes of any
kind that may be levied or assessed under existing or future laws upon or in
respect of the Trust Fund or the income thereof) are charged to and paid out of
the Trust Fund, in accordance with ERISA, unless and to the extent that the
Employer elects to pay all or any portion of those expenses. Such expenses
charged to and paid out from the Trust Fund shall be taken into account in
computing the net appreciation (or depreciation) of the Trust Fund for purposes
of Section 6.4(e). No payment by the Employer of any of the expenses of
establishing and administering the Plan and the Trust Fund shall be deemed to
constitute the Employer Contribution for purposes of the Plan.

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     (b) Transaction Costs. Brokerage commissions, stamp and transfer taxes, and
other charges ordinarily incurred in connection with the purchase or sale of
Stock and securities that are paid or incurred by the Trustee in connection with
the purchase or sale of Stock held as part of the Trust Fund shall be considered
to constitute either an additional cost of Stock purchased for the Trust Fund or
a reduction of the proceeds from the sale of Stock from the Trust Fund, as the
case may be, and not an expense within the scope of Section 7.2(a).
Notwithstanding anything to the contrary contained herein, no brokerage
commissions may be paid from the Trust Fund with respect to transactions between
the Employer or an Affiliate and the Trust Fund involving the sale, purchase, or
transfer of Stock, and stamp and transfer taxes and other charges with respect
to such transactions shall be paid from the Trust Fund only if, and to the
extent that, an independent party dealing at arm’s length with such Employer or
Affiliate in a similar transaction would ordinarily pay such taxes or other
charges.
7.3 Stock Purchase Rights, Warrants, and Options.
     Subject to Section 7.1, any stock purchase rights, warrants, purchase
options, and other similar rights issued with respect to Stock that are held as
part of the Trust Fund shall be exercised by the Trustee to the extent that the
Trustee determines that the exercise of such rights, warrants, or options would
be more beneficial to the Trust Fund than the purchase of shares of Stock in the
open market. In furtherance of that authorization, the Trustee may apply any
Employer Contribution (to the extent that the Employer Contribution is made in
cash and is not required to make a payment of interest or principal due with
respect to an outstanding Acquisition Loan) to exercise those rights, warrants,
or options. To the extent that the Trustee determines that cash is not available
in the Trust Fund to exercise those rights, warrants, or options, the Trustee
may sell shares of Stock or other assets held as part of the Trust Fund and
apply the proceeds thereof to exercise such rights, warrants, or options, or the
Trustee may sell such rights, warrants, and options and apply the proceeds
thereof in accordance with Section 6.4.

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8. DISTRIBUTION OF BENEFITS
8.1 Retirement; Form of Benefits.
     Subject to the exception described in Section 8.1(c), a Member shall be
entitled to take a distribution of vested benefits at any time after the
Member’s Severance Date. Such a Member may delay commencement of his or her
distribution to a later date that is not later than his or her Required
Beginning Date, but payment automatically shall be made to the Member in a
lump-sum in cash as of his or her Required Beginning Date if the Member fails to
request a distribution or to elect a form of payment under Section 8.1(a) prior
to his or her Required Beginning Date. Notwithstanding Section 8.3, a Member who
is an Employee on his or her Retirement Date shall be fully vested in all
amounts credited to the Member’s Member Account.
     (a) Once the eligible Member requests a distribution, the entire
distributable amount in the Member’s Member Account shall be paid to the Member
or the Member’s Beneficiary in the following manner:
          (i) Payment in a lump-sum as soon as practicable after receiving
payment instructions from the Member; or
          (ii) Payment in ten (10) or fewer approximately equal annual
installments, the first installment being as soon as practicable after such date
in each year thereafter, or as soon as practicable thereafter, until the balance
has been fully paid; provided, however, that the period of distribution shall
not exceed the life expectancy of the Member, or the joint life expectancy of
the Member and the Member’s spouse.
     (b) Unless a Member elects in writing to receive the Plan distribution in
Stock, the distribution from a Member Account may occur in cash or Stock as
determined by the Administrator. If a Member elects to receive the Plan
distribution in Stock, cash must be distributed in lieu of any fractional shares
of Stock allocated to the Member’s Member Account that are to be distributed in
Stock. A Member’s right to elect to receive the Plan distribution in Stock,
however, is limited as follows:
          (i) To the extent that a Member’s Member Account is invested in assets
other than Stock, including such investments resulting from a diversification
election pursuant to Code Section 401(a) (28) and Section 8.16, the Member
Account must be distributed in cash.
          (ii) In accordance with Code Section 409(h)(2), if the Company’s
charter or bylaws restrict ownership of substantially all shares of Stock to
Employees and the Trustee, the Administrator may direct that distribution of a
Member’s Member Account be in the form of cash without granting the Member the
right to demand distribution in Stock.

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     (c) A Member who turns age 701/2 as an Employee automatically shall be paid
his or her Account in a lump-sum in cash (or in such other form elected by the
Member under Section 8.1(a)) as of April 1 of the calendar year following the
year in which the Member turned age 701/2, unless the Member elects to defer
distribution of his or her Member Account. To elect to defer payment, the Member
must file a written notice with the Trustee no later than January 31 of the year
following the year in which the Member turned age 701/2. Notwithstanding the
preceding, a Member may not delay commencement of his or her distribution beyond
his or her Required Beginning Date.
          (i) A Member who is an Employee and who has elected to defer receipt
of all or a portion of the Member’s Account under this Section 8.1(c) may, by
notice to the Trustee, request a distribution under Section 8.1(a) not more
frequently than annually. The Trustee’s charge for making each such distribution
shall be deducted from the distribution.
          (ii) An Employee who is currently receiving distributions after
attaining the age of 701/2 may elect to terminate such distributions and delay
further distributions to a date no later than his or her Required Beginning
Date.
     (d) Regardless of any provision of the Plan to the contrary that would
otherwise limit a Distributee’s election under this Section 8.1 and effective as
of January 1, 1993, a Distributee may elect, at the time and in the manner
prescribed by the Committee, to have any portion of an Eligible Rollover
Distribution (as defined below) in excess of $200 paid directly to an Eligible
Retirement Plan (as defined below) specified by the Distributee (as defined
below) in a Direct Rollover (as defined below).
          (i) Eligible Rollover Distribution: An Eligible Rollover Distribution
is a distribution of all or any portion of the vested balance to the credit of a
Distributee, excluding (A) a distribution that is one of a series of
substantially equal periodic payments (not less frequently than annually) made
for the life (or life expectancy) of the Distributee or the joint lives (or
joint life expectancies) of the Distributee and the Distributee’s designated
Beneficiary, or for a specified period of ten years or more; (B) a distribution
to the extent such distribution is required under Code Section 401(a)(9);
(C) except as described below, the portion of a distribution that is not
includible in gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to Employer securities); and (D)
(I) effective with respect to distributions during calendar year 2000 and 2001,
any hardship distribution described in Code Section 401(k)(2)(B)(i)(iv), and
(II) effective with respect to distributions on or after January 1, 2002, any
distribution that is made upon the hardship of the Member. Notwithstanding the
preceding sentence, effective with respect to distributions on or after
January 1, 2002, the portion of a distribution that is not includible in gross
income shall be considered an Eligible Rollover Distribution if the Direct
Rollover is transacted with an Eligible Retirement Plan that is (A) an
individual retirement account described in Code Section 408(a), (B) an
individual retirement annuity described in Code Section 408(b), or (C) a defined
contribution plan constituted as a qualified trust, and for which the trustee
agrees to separately account for the amount of the after-tax contribution
account so transferred.

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          (ii) Eligible Retirement Plan: Provided such plan accepts the Member’s
Eligible Rollover Distribution, an Eligible Retirement Plan is an individual
retirement account described in Code Section 408(a), an individual retirement
annuity described in Code Section 408(b), an annuity plan described in Code
Section 403(a), or a qualified trust described in Code Section 401(a), and,
effective January 1, 2002, tax-sheltered annuity plan described in Code Section
403(b) or an eligible deferred compensation plan described in Code Section
457(b) that is maintained by an eligible employer described in Code
Section 457(e)(1)(A). Notwithstanding the preceding sentence, prior to
January 1, 2002, with respect to a Distributee who is a surviving spouse of a
Participant, the term Eligible Retirement Plan shall mean an individual
retirement account described in Code Section 408(a) or an individual retirement
annuity described in Code Section 408(b).
          (iii) Distributee: A Distributee includes an employee or former
employee. In addition, the employee’s or former employee’s surviving spouse and
the employee’s or former employee’s spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in Code
Section 414(p), are Distributees with regard to the interest of the spouse or
former spouse.
          (iv) Direct Rollover: A Direct Rollover is a payment by the plan to
the Eligible Retirement Plan specified by the Distributee.
8.2 Disability Retirement.
          Any Member shall be deemed to have retired from service, and shall
accordingly be entitled to the Member’s fully vested Member Account whenever
such Member is determined to have a Permanent and Total Disability, as such term
is defined in Section 2.1. Such Member shall be entitled to share in the
Employer Contributions and Forfeitures for the Plan Year during which the Member
terminates employment due to being permanently and totally disabled under the
preceding sentence.
8.3 Vesting.
     The vested interest of a Member’s Member Account shall be the percentage of
the total amount credited to the Member Account of such Member determined on the
basis of the Member’s total number of Years of Service, except as provided in
Sections 8.1, 8.5 and 8.6, in accordance with the following vesting schedule:

          Years of Service   Vested Percentage
less than 3
    0 %
3
    20 %
4
    40 %
5
    60 %
6
    80 %
7
    100 %

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        Notwithstanding the preceding, a Member shall become 100% vested in his
or her Member Account upon the earliest to occur while employed by the Employer:
his or her Permanent and Total Disability; the occurrence of his or her
Retirement Date; or his or her death.
        Upon a Member’s termination of employment, if the Member’s vested
interest in the Member’s Member Account is less than the allowable limit imposed
by the applicable section of the Code ($5,000 for Plan Years beginning after
August 5, 1997), the Administrator shall direct that distribution of the vested
interest of the Member’s Member Account to occur as soon as practicable
following his or her termination of employment but no later than the end of the
second Plan Year following his or her termination of employment. For purposes of
this Section, if the value of a terminating Member’s vested interest is zero,
such Member shall be deemed to have received a distribution of the Member’s
entire benefit under the Plan at the time of the Member’s termination. The value
of such Member’s Member Account shall be valued as of the Valuation Date
immediately before the distribution and coinciding with or after the Member’s
termination.
8.4 Reemployment – Reinstatement of Forfeitures.
        If a Member terminates employment with the Employer and all Affiliated
Companies at a time when the Member’s vested percentage under Section 8.3 is
less than 100%, the unvested amount of the Member’s Member Account shall become
a Forfeiture as of the close of the Plan Year in which the Member’s termination
of employment occurs, and shall be allocated in accordance with Section 6.4(b)
of the Plan along with other amounts that constitute a Forfeiture for that Plan
Year.
        If the terminated Member who experienced a Forfeiture under this
Section 8.4 is reemployed as an Employee prior to incurring a Break in Service
of at least 60 consecutive months, the Member shall be permitted to have the
forfeited balance restored through the process next described. If the Member
repays to the Trust Fund the cash amount of the gross distribution, including
taxes and other amounts withheld from the distribution, if any, upon the
Member’s previous termination of employment, within five (5) years of the date
of reemployment, then the amount that the Member forfeited upon the Member’s
termination shall be reinstated to the Member. The repaid amount and an amount
required to reinstate the Member’s Forfeiture shall become the new balance in
the Member’s Account. The amount required to reinstate a reemployed Member’s
Forfeiture under the preceding sentence shall be credited to the Member’s
Account as soon as reasonably practicable, and it shall be paid from the amounts
forfeited by other Members during that year before the reallocation of
Forfeitures provided under Section 6.4(b). Notwithstanding any provision of this
Section 8.4, a Member who forfeited a portion of his or her Account balance and
who incurs a Break in Service of at least 60 consecutive months shall not have
any right to reinstatement of the amount forfeited.
        For purposes of determining a Member’s vested interest under Section 8,
all Years of Service with the Employer shall be included; provided, however,
that if the Employee is reemployed after incurring a Total Break in Service,
Years of Service credited to the Employee prior to the Total Break in Service
shall not be included in determining the Employee’s vested interest in amounts
credited to the Employee’s Account after the Employee’s reemployment.

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8.5 Death Benefits.
     (a) If a Member dies while actively employed by an Employer, the Member
shall be fully vested in all amounts credited to the Member’s Member Account.
     (b) The entire amount of a Member’s Member Account as of the date such
Member died shall be paid as a death benefit to the Beneficiary or Beneficiaries
named by the Member in accordance with Section 8.12. If a Member died while
actively employed by an Employer and without having received any matching or
other employer contributions under the NVR, Inc. Profit Sharing Plan, $10,000
(less applicable tax withholdings) shall be paid immediately as an advance to
the Beneficiary or Beneficiaries. However, if the entire amount in such Member’s
Member Account as of the date the Employee dies is less than $10,000, the
difference between such entire amount and $10,000 shall be paid by the Employer
to the Beneficiary or Beneficiaries.
8.6 Discharge for Cause.
     Regardless of any other provision of this Plan to the contrary, if (1) the
Employer discharges a Member on grounds of dishonesty, including without
limitation, theft, embezzlement, solicitation of bribes, kickbacks, or other
illegal payments, or usurpation of corporate opportunity, and (2) such discharge
occurs before the fifth (5th) anniversary of such Member’s Employment Date, such
Member shall forfeit the entire amount of his or her Member Account and shall be
entitled to no benefits under this Plan other than the return of the Member’s
own contributions, if any. This Section shall be inapplicable to any vested
interest attributable to Top Heavy Plan status.
8.7 Distributions Prior to Termination of Employment.
     Except as provided in Sections 8.1(c) and 8.16, no distribution of any
portion of the Member Account of a Member may occur before that Member’s
termination of employment with his or her Employer. For purposes of this
Section 8.7, a Member is not considered to have terminated employment with (or
retired from) the Employer, if the Member is immediately thereafter employed
with any other Employer or Affiliate.
8.8 Distribution of Benefits after Termination of Employment.
     A Member may elect that distribution of the vested interest attributable to
the Member’s Member Account occur on or after a Valuation Date coinciding with
or following the date on which the Member’s employment terminates.
Notwithstanding any other provision to the contrary, a Member who terminates
employment with no vested interest shall be deemed to have received a
distribution of his or her Plan benefits on the date of the Member’s
termination.

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8.9 Distributions to Alternate Payees.
     (a) Despite any other Plan provisions to the contrary, the Administrator
must comply with the terms of a Qualified Domestic Relations Order, as defined
in Section 8.9(b). This Plan specifically permits distribution to an Alternate
Payee (as defined in Section 8.9(c)) under a Qualified Domestic Relations Order,
prior to the earliest distribution date with respect to a Member and regardless
of whether or not the Member has attained the Earliest Retirement Age (as
defined in Section 8.9(d)) if: (1) the order specifies distribution at that time
or permits an agreement between the Plan and the Alternate Payee to authorize an
earlier distribution; and (2) if the present value of the Alternate Payee’s
benefits under the Plan exceeds the allowable limit imposed by the applicable
section of the Code ($5,000 for Plan Years beginning after August 5, 1997), the
order requires the Alternate Payee’s consent to any distribution occurring prior
to the earliest distribution date with respect to a Member and prior to the
Member attaining Earliest Retirement Age. Nothing in this Section 8.9 shall give
a Member a right to receive a distribution at any time otherwise not permitted
under the Plan, nor shall it permit the Alternate Payee to receive a form of
payment not permitted under the Plan. If the Member whose benefit is subject to
a Qualified Domestic Relations Order dies before the date on which the Member
attains or would have attained the Earliest Retirement Age, the Alternate Payee
is entitled to benefits only if the order requires survivor benefits to be paid.
For purposes of the two preceding sentences, the amount to be paid to the
Alternate Payee is computed by using the benefit that would be payable to the
Member if the Member had retired on the date on which payment is to begin under
that order. The payment of early retirement benefits with respect to a Member
who has not yet retired is not to be considered to violate the
no-increased-benefits provision in this Plan’s definition of a Qualified
Domestic Relations Order. The Committee must establish reasonable procedures for
determining the qualified status of a Domestic Relations Order (as defined in
Section 8.9(e)) and for administering distributions under a Qualified Domestic
Relations Order. The Committee must also promptly notify the Member and each
Alternate Payee that it received the order and also notify them of the
procedures for determining the order’s qualified status. Within a reasonable
period (as defined by Treasury regulations) after it receives a Domestic
Relations Order, the Committee must determine whether the order is a Qualified
Domestic Relations Order and notify the Member and each Alternate Payee of the
determination.
     (b) “Qualified Domestic Relations Order” refers to a Domestic Relations
Order that satisfies the conditions in clauses (i) through (v).
          (i) The order creates or recognizes the right of an Alternate Payee to
receive all or a portion of the benefit payable with respect to the Member under
the Plan or assigns to an Alternate Payee the right to receive all or a portion
of the benefits payable to the Member under the Plan.
          (ii) The order clearly specifies: the name and last known mailing
address of the Member and the name and mailing address of each Alternate Payee;
the amount or percentage of distribution to be determined; the number of
payments or period to which the order applies; and each plan to which the order
applies.

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          (iii) The order does not require the Plan to provide any type or form
of benefit or any option not otherwise provided under the Plan.
          (iv) The order does not require the Plan to provide increased
benefits. A Domestic Relations Order does not require the Plan to provide
increased benefits if it does not provide for the payment of benefits in excess
of the actuarial equivalent of the benefits to which the Member would be
entitled in the absence of the Qualified Domestic Relations Order.
          (v) The order does not require the payment of benefits to an Alternate
Payee that are required to be paid to another Alternate Payee under another
order determined previously to be a Qualified Domestic Relations Order.
     (c) “Alternate Payee” refers to a Member’s spouse, former spouse, child, or
other dependent who is recognized by a Qualified Domestic Relations Order as
having a right to receive all or a portion of the benefits payable under the
Plan with respect to that Member.
     (d) “Earliest Retirement Age,” for purposes of Qualified Domestic Relations
Orders and according to Section 414(p)(4)(B) of the Code, means the earlier of
the date on which the Member is entitled to a distribution under the Plan and
the later of the date on which the Member attains age 50 or the earliest date on
which the Member could begin receiving benefits under the Plan if the Member
separated from service.
     (e) “Domestic Relations Order” means any Judgment, decree or order
(including approval of a property settlement agreement) made pursuant to a state
domestic relations law which relates to the provision of child support, alimony
payments, or marital property rights to a spouse, former spouse, child or other
dependent of a Member.
8.10 Distribution for Minor Beneficiary.
     In the event a distribution is to be made to a minor Beneficiary, then the
Administrator may, in its sole discretion, direct that distribution occur to the
legal guardian, or if none, to a parent of that Beneficiary or a responsible
adult with whom the Beneficiary maintains his or her residence or to the
custodian for the Beneficiary under the Uniform Gift to Minors Act or Gift to
Minors Act, if permitted by the laws of the state in which the Beneficiary
resides. A payment to the legal guardian, parent, or custodian of a minor
Beneficiary fully discharges the Trustee, the Administrator, the Committee, the
Company, the Employers, and the Plan from further liability on account of the
distribution.

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8.11 Proof of Death and Right of Beneficiary or Other Person.
     The Administrator may require and rely upon such proof of death and such
evidence of the right of any Beneficiary or other person to receive any amounts
distributable under Section 8 as the Administrator may deem proper, and the
Administrator’s determination of death and of the right of any Beneficiary or
other person to receive payments under the Plan is conclusive.
8.12 Designation of Beneficiary.
     (a) Unless the NVR, Inc. Profit Sharing Plan has been terminated and there
is no successor plan, the Member’s Beneficiary shall be the Member’s Beneficiary
determined under the terms of the NVR, Inc. Profit Sharing Plan. If the NVR,
Inc. Profit Sharing Plan has been terminated and there is no successor plan,
each Member may designate in writing a Beneficiary in accordance with this
Section 8.12. Such designation must be made in a form satisfactory to the
Administrator, provided, however, that a Member who is married and who wishes to
designate a primary Beneficiary other than the Member’s spouse shall furnish the
Necessary Spousal Consent of the Member’s spouse thereto in such form as may be
required by the Committee. This spousal consent must be in writing and must be
acknowledged by a notary public unless otherwise specified by law or regulation.
Subject to the requirements of this Section 8.12, any Member may at any time
revoke the Member’s designation of a Beneficiary or change the Member’s
Beneficiary by filing written notice of that revocation or change with the
Administrator.
     (b) If no valid Beneficiary designation is in effect at the time of the
Member’s death and all or a portion of the vested portion of the Member’s
Account remains undistributed, payment will be made to the Member’s surviving
spouse, or, if none, to the Member’s estate.
     (c) “Necessary Spousal Consent” exists if: (1) the Member’s spouse consents
in writing to the waiver of the death benefits under the Plan and designation of
a specific Beneficiary, including any class of beneficiaries or any contingent
beneficiaries, which may not be changed without spousal consent (unless the
spouse’s consent expressly permits designations by the Member without any
further spousal consent); (2) the spouse’s consent acknowledges the effect of
the waiver; and (3) the spouse’s consent is witnessed by a plan representative
or notary public. If it is established to the satisfaction of a plan
representative that there is no spouse or that the spouse cannot be located, a
waiver will be deemed to constitute necessary spousal consent. Any consent by a
spouse obtained under these provisions (and any establishment that the consent
of a spouse may not be obtained) shall be effective only with respect to the
particular spouse involved. A consent that permits designations by the Member
without any requirement of further consent by the spouse must be acknowledged
that the spouse has the right to limit the consent to a specific Beneficiary and
a specific form of benefit where applicable, and that the spouse voluntarily
elects to relinquish either or both of those rights. A revocation of a prior
waiver may be made by a Member without the consent of the spouse at any time
before the commencement of benefits. The number of revocations shall not be
limited.

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     (d) Any death benefit payable under this Plan as a result of a Member’s
death shall be paid to the Member’s Beneficiary or Beneficiaries in a lump-sum.
Notwithstanding the preceding, benefits may be distributed over a longer period
of time to a Member’s Beneficiary if such Member elected such distribution
period in an effective election made prior to January 1, 1984. Death benefit
payments shall be made, or in the case of the preceding sentence shall commence,
as soon as practicable after the date the Member died.
8.13 Amendments and Modifications Relating to Vesting.
     A Member’s vested interest shall not be reduced as a result of any direct
or indirect amendment to this Section 8. In the event that the vesting schedule
set forth in Section 8.3 is amended or modified, a Member with at least three
Years of Service as of the expiration date of the “election period” described in
this Section may elect to continue to be subject to the vesting schedule in
effect prior to such amendment. If a Member fails to make such an election, then
the Member shall be subject to the new vesting schedule. The Member’s “election
period” shall commence on the date of adoption of the amendment and shall end
60 days after the latest of: (i) the adoption date of the amendment; (ii) the
effective date of the amendment; or (iii) the date the Member receives written
notice of the amendment from the Employer or the Administrator.
8.14 Option To Require Employer To Purchase Stock.
     If any Stock distributed pursuant to this Plan is not “readily tradable on
an established securities market” (as defined below) at the time distributed,
then the recipient of those shares of Stock has the right during the Put Option
Period (as defined below) to require the Employer, by notice in writing to the
Employer within the applicable Put Option Period, to purchase the shares of
Stock at a price equal to the fair market value of those shares, determined in
accordance with Section 4.2 as of the Valuation Date coinciding with or
immediately preceding the date of the purchase. In addition, the Plan shall have
the option, but shall not be required, to purchase the Stock from a Member
exercising his or her put right.
     For purposes of this Section 8.14, the term “Put Option Period” means
(i) the sixty day period beginning on the date following the date of the
distribution of the shares of Stock, and (ii) sixty days during the following
Plan Year, which second sixty-day period is to be designated by the Employer in
accordance with Code Section 409(h)(4) and the regulations thereunder, provided,
however, that such second sixty-day period must not begin before (X) the first
Valuation Date following termination of the initial sixty-day period set forth
in (i) above and (Y) written notice to the Member of the value of the shares of
Stock determined as of the Valuation Date. The “Put Option Period” does not
include any time during which the Employer is prohibited by applicable federal
or state law from honoring its obligations under this Section 8.14. Shares of
Stock will be considered not “readily tradable on an established securities
market” if the shares either are not traded on a national securities exchange or
quoted on a system sponsored by a national securities association, or are
subject to a restriction under any federal or state securities law, any
regulation thereunder, or any agreement affecting the shares that renders such
shares less freely tradable than would be the case if the restriction did not
exist.

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     The put option right provided for in this Section 8.14 is exercisable only
by a Member, the Member’s Beneficiary, the donee of a Member or Beneficiary (but
only with respect to shares of Stock received as a gift by such donee), or the
person (including an estate or a distributee thereof) to whom shares of Stock
pass as the result of the death of the Member or the Member’s Beneficiary. The
Plan has a first right of refusal (but no obligation) to purchase any shares of
Stock tendered to the Employer or the Company, pursuant to this Section 8.14.
The Employer or the Company (or the Plan, in the event that the Plan exercises
its right described in the immediately preceding sentence) shall have the right,
in its sole and absolute discretion, to elect to pay the purchase price for any
shares of Stock that were distributed as part of a total distribution (within
the meaning of Code Section 409(h)(5)) and are purchased pursuant to this
Section 8.14, in a single lump sum or in substantially equal annual installments
over a period beginning not later than thirty days after the exercise of the put
option right provided for in this Section 8.14 and not exceeding five years,
with interest payable at a reasonable rate (as determined by the Employer, or in
the event the Plan elects to purchase such shares, the Administrator) on any
unpaid installment balance. If the Employer or the Company (or the Plan, in the
event that the Plan exercises its right described above) is required to purchase
Stock pursuant to this Section 8.14 that was distributed as part of an
installment distribution, the payment of the purchase price for the Stock must
occur in a single lump sum not later than thirty days after the exercise of the
put option right provided for in this Section 8.14.
8.15 No Other Rights To Put or Call Stock.
     Except as set forth in Section 8.14, and except as otherwise required by
applicable federal or state law, no shares of Stock acquired with the proceeds
of an Acquisition Loan are subject to any put, call, or other option, or any
buy-sell or similar agreement, either while held by the Plan or when distributed
by the Plan, irrespective of whether or not the Plan then qualifies as an
“employee stock ownership plan” under Code Section 4975(e)(7). Notwithstanding
anything to the contrary contained in this Plan, this Section 8.15 and the
rights and protections afforded Members and Beneficiaries under Section 8.14 are
not subject to termination, amendment, or modification insofar as those
provisions apply to shares of Stock acquired with the proceeds of one or more
Acquisition Loans.
8.16 Distributions to Qualified Members.
     (a) Each Qualified Member (as defined in Section 8.16(c)) may elect
annually within ninety days after the close of each Plan Year in the Qualified
Election Period (as defined in Section 8.16(d)) to withdraw not more than
25 percent of the amounts credited to the Member Account of that Qualified
Member as of the last day of the Plan Year (taking into account in applying the
25 percent limitation any amounts previously withdrawn pursuant to this
Section 8.16); provided, however, that in the case of the Plan Year with respect
to which the Qualified Member can make his or her last withdrawal election
pursuant to this Section 8.16, this sentence must be applied by substituting
“50 percent” for “25 percent”. Any election pursuant to this Section 8.16 must
be in writing, on a form or forms supplied by the Administrator, and must be
received by the Employer not later than ninety days after the close of the Plan
Year to which the election relates. A Qualified Member’s Member Account shall be
adjusted to reflect distributions pursuant to this Section 8.16.

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     (b) Unless otherwise elected by the Qualified Member in accordance with the
this Section 8.16(b), distributions from the Member Account of a Qualified
Member pursuant to this Section 8.16 must be made in whole shares of Stock,
except that cash will be distributed in lieu of any fractional shares. A
Qualified Member may elect in writing on the election form described in
Section 8.16(a) to receive all or a portion of the amounts withdrawn from the
Qualified Member’s Member Account pursuant to this Section 8.16 in cash.
Distributions of amounts withdrawn pursuant to this Section 8.16, whether in
shares of Stock or cash, shall be made no later than ninety days after the close
of the period during which the withdrawal election may be made.
     (c) For purposes of this Section 8.16, the term “Qualified Member” means
any Member who has completed at least ten years of participation under the Plan
and has attained age 55.
     (d) For purposes of this Section 8.16, the term “Qualified Election Period”
means the six Plan Year period beginning with the first Plan Year in which the
Member first became a Qualified Member.
8.17 Distribution from Member Accounts of Cash Dividends on Stock.
     To the extent determined by the Administrator on or before the 90th day
following the close of each Plan Year (the “Distribution Date”), cash dividends
on Stock (which dividends have been paid and allocated to Member Accounts during
the Plan Year) shall be distributed to Members in cash on or before the
Distribution Date. Appropriate charges shall be made to Member Accounts to
reflect the distribution of cash dividends.
9. ACCOUNTS AND RECORDS OF THE PLAN
     The Administrator must maintain the accounts and records of the Plan, and
the accounts and records must accurately disclose the status of the Member
Account of each Member. Each Member shall be advised from time to time, at least
once each Plan Year, of the balance of that Member’s Member Account.

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10. PROFIT SHARING COMMITTEE
10.1 Membership.
     The Company is the Administrator and named fiduciary (as defined in ERISA),
and is responsible for the general management and administration of the Plan,
including all fiduciary decisions relating to the management and administration
of the Plan. The Company will act through the Profit Sharing Committee which
shall consist of such persons as may be designated from time to time by the
Board of Directors. The Board of Directors shall have the power to change the
membership of the Committee at any time and from time to time hereafter. The
Committee at all times shall consist of not fewer than three (3) individuals who
must be employees or officers of the Employer. If a Committee member ceases to
be an employee or officer of the Employer, the Committee member shall, as of the
effective date of termination with the Employer, automatically cease membership
on this Committee. Members of the Committee shall not be considered fiduciaries
with respect to the Plan. Any member of the Committee may resign at any time by
delivery of a written notice of resignation to the chairman or secretary of the
Board of Directors. Vacancies shall be filled promptly by persons appointed by
the Board of Directors; any vacancy remaining unfilled for a period of forty
(40) days may be filled by action of the Chairman of the Board or Chief
Executive Officer of the Company. Members of the Committee shall not
independently exercise any discretionary responsibility or authority with
respect to the Plan.
10.2 Majority Vote.
     The action of the Committee shall be determined by the vote or other
affirmative expression of a majority of its members.
10.3 Chairman, Secretary, Signature.
     The Board of Directors shall appoint a chairman and a secretary of the
Committee, who shall be members of the Committee, and may designate other
positions within the membership of the Committee. The chairman or secretary may
execute all documents on behalf of the Committee. Any document so executed shall
be conclusive in favor of any party acting in reliance on it.
10.4 Regulations, Records.
     The Committee may adopt such by-laws and regulations as it deems desirable
for the conduct of its affairs. The secretary shall keep minutes of the
Committee’s proceedings and all dates, records, accounts and documents
pertaining to the administration of the Plan. No Member or Beneficiary shall
have any right to inspect any such records, except that the Committee may, upon
request of a Member, make available the record of such Member’s Member Account.

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10.5 Powers and Duties.
     Other than the administration of the Trust, with which the Trustee shall be
charged to the extent provided in the Trust Agreement, the Company shall have
complete control of the administration of this Plan, with all powers necessary
to enable it properly to carry out its duties in that respect. The Committee, on
behalf of the Company, shall have power to interpret this Plan, and any
ambiguities arising hereunder, and to determine all questions that may arise
hereunder. It shall determine all questions relating to the eligibility of an
Employee to participate in this Plan and the amount of benefit to which a Member
may become entitled hereunder. All disbursements by the Trustee, except for the
ordinary expense of administration of the Trust Fund, shall be made only in
accordance with the direction of the Committee as evidenced in writing and
signed by the chairman or secretary of the Committee. By way of specification
and not in limitation, the Committee is authorized:
     (a) To enact uniform and nondiscriminatory rules and restrictions to carry
out the provisions of the Plan;
     (b) To make any finding of fact necessary or appropriate for any purpose
under the Plan, including, but not limited to, the determination of eligibility
for and the amount of any benefit under the Plan;
     (c) To interpret the terms and provisions of the Plan and to determine any
and all questions arising under the Plan or in connection with the
administration thereof, including, without limitation, the right to remedy or
resolve possible ambiguities, inconsistencies or omissions by general rule or
particular decision;
     (d) To conduct the day to day administration of the Plan;
     (e) To set uniform policies in order that the Plan may be operated in a
nondiscriminatory manner;
     (f) To evaluate administrative procedures;
     (g) To establish reasonable procedures to determine the qualified status of
a domestic relations order as provided in Code Section 414(p) which relates to
the Plan, and to administer distributions under such orders;
     (h) To receive and request from the Members and Beneficiaries such
information and factual materials as may be necessary for the proper
administration of the Plan;
     (i) To compute the amount of benefits payable hereunder to any Member,
former Member or Beneficiary;
     (j) To authorize all disbursements by the Trustee; and

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     (k) To give instructions to the Trustee as provided in the Trust Agreement
and to the Investment Manager as provided in the agreement with such Investment
Manager.
     The decision of the Committee upon all matters within the scope of its
authority shall be conclusive and binding on all parties and will not be
overturned unless found to be arbitrary and capricious by a court of law.
10.6 Appointment of Agents.
     The Committee may appoint such accountants, counsel, specialists, and other
agents as it deems necessary or appropriate in connection with the
administration of the Plan. Such accountants and counsel may, but need not, be
accountants and counsel for the Company. The Committee shall be entitled to rely
conclusively upon, and shall be fully protected by the Employer in any action
taken by it in good faith in relying upon, any opinions or reports which shall
be furnished to it by any accountants, counsel or other specialists.
10.7 Expenses.
     All expenses of the Committee connected with its administration of the
Plan, including the reasonable fees, expenses, and charges of any independent
contractor, or agent appointed pursuant to Section 10.6, shall be paid from the
Trust Fund unless otherwise paid by the Employer.
10.8 Member Not to Vote on Own Participation.
     A member of the Committee shall not vote on any question relating solely to
the Member’s own participation in the Plan, although this limitation shall not
apply as to any vote that may be taken which may incidentally affect a member of
the Committee along with other members. In the event that the remaining members
of the Committee are unable to come to a determination of any such question by
majority vote thereof, the same shall be determined by the Chairman of the Board
or President of the Company, acting ex officio.
10.9 Employer to Furnish Information.
     Upon request of the Committee, the Employer shall furnish such information
in its possession as will aid the Committee in the performance of its duties
hereunder. The officers and employees of the Employer are hereby authorized and
directed to make available to the Committee upon its request such information as
the Employer may have.
10.10 Indemnification.
     The Employer shall indemnify and hold each of the members of the Committee
and its duly constituted agents harmless from the effects and consequences of
their acts and conduct, except to the extent that such effects and consequences
flow from their own willful misconduct.

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10.11 Claims Procedure.
     (a) Claim for Benefits. If a claim for any benefits under the Plan is
wholly or partially denied, the chairman of the Committee shall provide written
notice of such denial to the claimant within sixty (60) days after receipt of
the claim. Such notice shall contain (1) the specific reason or reasons for the
denial; (2) specific reference to pertinent Plan provisions on which the denial
is based; (3) a description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why such material or
information is necessary; and (4) an explanation of the Plan’s claims review
procedure and the time limits applicable to such procedures, including a
statement of the claimant’s right to bring civil action under ERISA
Section 502(a).
     (b) Review Procedure. Within ninety (90) days after receipt of a written
notice of denial, the claimant may file with the chairman of the Committee a
written request for review of the chairman’s decision. At the time a request for
review is filed, the claimant or the Member’s duly authorized representative may
submit issues and comments in writing and may review any pertinent documents.
The review shall take into account all comments, documents, records and other
information submitted by the claimant relating to the claim, without regard to
whether such information was submitted or considered in the initial
determination. The claimant shall be provided, upon request and free of charge,
reasonable access to and copies of all documents, records or other relevant
information. Within sixty (60) days after receipt of a request for review, the
entire Committee shall render a written decision to the claimant, containing the
reasons for the decision and specific references to the pertinent plan
provisions on which the decision is based.
     (c) Exhaustion of Remedies. No legal action with respect to a claim for
benefits under the Plan shall be instituted unless the claimant shall have first
exhausted the claims procedure set forth in this Section 10.11.

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11. CONTROL AND MANAGEMENT OF ASSETS
11.1 Custody of Assets.
     All assets of the Plan must be held in the Trust by the Trustee pursuant to
a Trust Agreement not inconsistent with the Plan or the provisions of applicable
law, including ERISA.
11.2 Duties of Trustee.
     The Trustee has the exclusive authority and discretion to control and
manage the Trust Fund.
11.3 Delegation of Responsibilities of the Board of Directors.
     (a) The Board of Directors may delegate its duties and responsibilities for
control and management of Plan assets and may designate either named fiduciaries
or persons other than named fiduciaries to carry out those duties and
responsibilities. Any such resolution must be in writing and must:
          (i) specifically identify the person or persons (by name or office) to
whom a duty is delegated, and
          (ii) specifically identify the nature and scope of the duty delegated.
     (b) To the extent a duty or responsibility is delegated in accordance with
Section 11.3(a), neither the Employer, the Board of Directors, nor any member of
the Board of Directors (who is not the person to whom the duty is delegated) is
liable for an act or omission of the person or persons carrying out that duty or
responsibility except to the extent that the Board of Directors or member(s)
thereof (other than the person to whom the responsibility is delegated)
(i) violated its responsibility hereunder with respect to making the delegation
or permitting the delegation to continue, (ii) knowingly participated in or
attempted to conceal a known breach, or (iii) having knowledge of such a breach,
failed to make reasonable efforts under the circumstances to remedy the breach.
     (c) A named fiduciary or other person to whom a responsibility or duty of
the Board of Directors is delegated in accordance with the procedure set forth
above shall be responsible only for the performance of that responsibility or
duty according to the terms of the delegation and shall not be liable for the
act or omission of any other person with respect thereto unless:
          (i) by the delegated person’s failure to properly administer its
specific responsibility it has enabled such other person to commit a breach of
fiduciary responsibility;

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          (ii) the delegated person knowingly participates in, or knowingly
undertakes to conceal, an act or omission of another person, knowing such act of
omission to be a breach; or
          (iii) having knowledge of the breach of another, the delegated person
fails to make reasonable efforts under the circumstances to remedy the breach.
     (d) A named fiduciary to whom a fiduciary responsibility of the Board of
Directors has been delegated may designate persons other than a named fiduciary
to carry out those fiduciary responsibilities. Any such designation must be made
in the manner described in Section 11.3(a). To the extent such designations
occur, the named fiduciary making the designation is not liable for an act or
omission of the person carrying out the delegated responsibilities, except to
the extent provided in Section 11.3(b) in the case of the responsibility of the
Employer or the Board of Directors for the acts or omissions of persons to whom
its responsibilities are allocated or delegated.
     (e) Any person or group of persons may serve in more than one fiduciary
capacity with respect to the Plan.

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12. AMENDMENT AND TERMINATION
12.1 Future of Plan.
     While it is the intention of the Company to continue the Plan indefinitely,
the Company has the right to terminate the Plan at any time or to amend the Plan
at any time and from time to time by action of the Board of Directors; provided,
however, that no such amendment or termination is effective that attempts to
transfer or permit the transfer of assets of the Plan to purposes other than for
the exclusive benefit of Members and their Beneficiaries or that causes or
permits any assets of the Plan to revert to or become the property of the
Employers prior to the satisfaction of all liabilities of the Plan; and
provided, further, that upon the merger, consolidation, or reorganization of the
Company or the Employer with one or more other corporations in which the Company
or that Employer is not the surviving corporation, the Plan shall be continued
by the Company or that Employer or the successor thereof during the remaining
term of any Acquisition Loan outstanding on the date of such merger,
consolidation, or reorganization, and the surviving corporation shall continue
to make debt-service payments due on such Acquisition Loan without regard to any
cash proceeds that may be received by the Plan in connection with that merger,
consolidation, or reorganization.
12.2 Continued Qualification of Plan.
     Notwithstanding anything in this Plan to the contrary, the Board of
Directors may make any and all modifications to the Plan and Trust Agreement
that the Board of Directors shall deem necessary or appropriate in order to
qualify the Plan and Trust Agreement, and to keep the Plan and Trust Agreement
qualified, under the applicable provisions of the Code and the applicable
regulations promulgated thereunder or any amendment to the Code or such
regulations, or to cause the Plan to satisfy the requirements of Code Sections
4975(d) (3) and 4975(e)(7) and the applicable provisions of ERISA relating to
employee stock ownership plans.
12.3 Termination of Plan.
     In the event that the Plan is terminated or partially terminated or in the
event of a complete discontinuance of contributions by the Employer, the rights
of all Members (or those Members so affected in the case of a partial
termination) to benefits accrued under the Plan as of the date of such
termination, partial termination, or discontinuance of contributions shall be
nonforfeitable, and after providing for the expenses and other liabilities of
the Plan, the remaining assets of the Plan shall be allocated by the Trustee.
12.4 Merger or Consolidation or Transfer.
     No merger or consolidation of the Plan with, or any transfer of assets or
liabilities of the Plan to or from, any other plan may occur unless each Member
in the Plan would be entitled to receive a benefit immediately after that
merger, consolidation, or transfer (if the Plan had then terminated) that is
equal to or greater than the benefit that the Member would have been entitled to
receive immediately before that merger, consolidation, or transfer (if the Plan
had then terminated).
12.5 Additional Employers.
     This Plan may be adopted by any corporation or other business entity which
is acceptable to the Company, and which shall assume the obligations of the
Trust Agreement by executing a proper supplemental agreement with the Company
and the Trustee.

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13. TOP HEAVY PROVISIONS
13.1 Definitions.
     For the purpose of this Section 13, the following definitions shall apply:
     (a) “Determination Date” means the last business day of the preceding Plan
Year.
     (b) “Key Employee” means any Employee or former Employee (and the
Beneficiary of any such Employee) who at any time during the Plan Year
containing the Determination Date or the four proceeding Plan Years, is or was
(1) an officer of the Company whose annual Compensation exceeds 50% of the
dollar limitation under Code Section 415(b)(1)(A) for the calendar year in which
such Plan Year ends, (2) an owner (or considered as owning within the meaning of
Code Section 318) of one of the ten (10) largest total interests in the Company
which exceed a one-half percent interest and also having annual Compensation
greater than the dollar amount in effect under Code Section 415(c)(1)(A), (3) a
Five Percent Owner, or (4) a One Percent Owner who received annual Compensation
of more than $150,000 from an Affiliated Company. For purposes of determining
Five Percent and One Percent Owners, neither the constructive ownership rules of
Code Section 318 nor the aggregation rules of Code Sections 414(b), (c) and
(m) shall apply. Effective for Plan Years ending after December 31, 2001, Key
Employee means an Employee or former Employee (including any deceased Employee)
who at any time during the Plan Year containing the Determination Date was an
officer of the Company whose Compensation is greater than $130,000 (as adjusted
under Code Section 416(i)(1)), a Five Percent Owner, or a One Percent Owner
having Compensation of more than $150,000. The determination of who is a Key
Employee will be made in accordance with Section 416(i)(1) of the Code and the
applicable regulations and other guidance of general applicability issued
thereunder.
     For purposes of this definition, no more than the lesser of (1) 50
employees or (2) the greater of (x) ten percent (10%) of the employees of the
Affiliated Companies or (y) three (3) such employees shall be treated as
officers; provided, however, that in the event that this limitation applies,
those individual officers who had the highest one-year compensation during the
five (5) years preceding the Determination Date shall be considered as officers.
For purposes of clause (2) of this definition, if two Employees have the same
interest in the Company, the Employee having the greater annual Compensation
shall be treated as having a larger interest. Also, inherited benefits will
retain the character of the benefits of the Employee who performed services for
the Company. The Committee shall determine which participants are Key Employees
in accordance with Code Section 416(i)(1) and the regulation thereunder.
     For Plan Years beginning after December 31, 2001, the term “Key Employee”
does not include any former Employee who has not performed services as an
Employee during the one-year period ending on the Determination Date.

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     (c) “Permissive Aggregation Group” means any plan of any Affiliated Company
which is not included in the definition of a Required Aggregation Group provided
such group continues to meet the requirements of Code Section 401(a)(4) and Code
Section 410.
     (d) “Required Aggregation Group” means (i) each plan of an Affiliated
Company in which a Key Employee is a member, and (ii) each other plan of an
Affiliated Company which enables a plan described in (i) to meet the
requirements of Code Section 401(a)(4) or Code Section 410.
     (e) “Super Top Heavy” has the same meaning as Top Heavy except that 90% is
substituted in place of 60%. If the Plan is Super Top Heavy in any Plan Year, it
shall also be Top Heavy in such Plan Year.
     (f) “Top Heavy” means the status of the Plan in any Plan Year in which the
Top Heavy Ratio as of the Determination Date exceeds 60%. If any Employer
maintains another qualified plan, such other plan is required to be taken into
account in determining the Top Heavy Ratio only if it is a part of the Required
Aggregation Group. If any Employer maintains a qualified plan which is part of
the Permissive Aggregation Group, such plan will be taken into account in
determining the Top Heavy Ratio of the group of plans at the sole discretion of
the Employer.
     (g) “Top Heavy Ratio” means a fraction, the numerator of which is the sum
of the present value of the Member Accounts of all Key Employees as of the
Determination Date, the contributions due to the Member Accounts of all Key
Employees as of the Determination Date, and distributions made to Key Employees
during the five-year period immediately preceding the Determination Date; and
the denominator of which is the sum of the Determination Date, the contributions
due to the Member Accounts as of the Determination Date, and distributions made
to all Members during the five-year period immediately preceding the
Determination Date; provided, however, that for the purpose of this
Section 13.1(g), the term Member shall not include a former Key Employee who is
no longer a Key Employee at the time to which such calculation relates, or a
Beneficiary of such a former Key Employee, and the term distributions shall not
include a rollover contribution made to another Plan, or a rollover contribution
accepted before January 1, 1984 from any Plan not maintained by an Affiliated
Company. For purposes of this Section 13.1(g), the Member Account balances
(whether or not a Key Employee) shall not be taken into account if such Member
received no Compensation from any Affiliated Company during the one-year period
ending on the Determination Date.
     For Plan Years beginning after December 31, 2001, the numerator of the Top
Heavy Ratio fraction shall equal the sum of the percent value of the Accounts of
all Key Employees as of the Determination Date, the contributions due to the
Accounts of all Key Employees as of the Determination Date, distributions made
to Key Employees on account of a separation from service, death or disability
during the five-year period immediately preceding the Determination Date, and
all other distributions made to all Key Employees during the one-year period
immediately preceding the Determination Date.

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13.2 Top Heavy Plan Year Vesting.
     Notwithstanding any provision in Section 8.3 to the contrary, if the Plan
is Top Heavy during any Plan Year, the following vesting schedule shall apply
for such Top Heavy Plan Year: 20% after two (2) full Years of Service; and 20%
for each of the next four (4) full Years of Service thereafter. If the Plan is
not Top Heavy in a Plan Year subsequent to being a Top Heavy Plan, any vested
balance shall remain vested, and any Member with five (5) or more Years of
Service shall have the option of remaining under such Top Heavy vesting
schedule; a Member shall exercise such option by filing an effective election
with the Committee. The period for making such election shall begin on the first
day of the Plan Year subsequent to being a Top Heavy Plan and shall end no
earlier than the later of sixty (60) days after:
     (a) The first day of the Plan Year subsequent to being a Top Heavy Plan, or
     (b) The day the Plan Member is issued notice by the Committee.
13.3 Top Heavy Plan Year Contribution.
     For any Plan Year for which the Plan is determined to be a Top Heavy Plan,
the Employer must contribute to the Plan on behalf of each Member who is a
Non-Key Employee and who is employed by the Employer on the last day of the Plan
Year an amount that when added to the sum of the Amount of the Employer
Contribution allocated to the Member for that Plan Year under Section 6.4 and
the amount of employer contributions allocated to the Member for the Plan Year
under all other Defined Contribution Plans (as defined in Section 6.5(a)(iii)),
must be not less than three percent of the Member’s compensation (within the
meaning of Code Section 415) for the Plan Year; provided, however, that if the
amount of the Employer Contribution and the amount of employer contributions and
forfeitures under all other such Defined Contribution Plans for the Plan Year
allocated to each Member who is a Key Employee is less than three percent of the
Member’s compensation (within the meaning of Code Section 415) for the Plan
Year, then the Employer shall contributed to the Plan for the Plan Year on
behalf of each Member who is a Non-Key Employee and who is employed by the
Employer on the last day of the Plan Year an amount that when added to the sum
of the Amount of the Employer Contribution allocated to the member for that Plan
Year under Section 6.4 and the amount of employer contributions allocated to the
Member for the Plan Year under all other Defined Contribution Plans (as defined
in Section 6.5(a)(iii)), must not be less than a percentage of the Member’s
compensation (within the meaning of Code Section 415) for that Plan Year for the
Key Employee for whom the ratio is the highest. All amounts contributed to the
Plan pursuant to this Section 13 on behalf of a Member must be credited to the
Member’s Member Account as provided for in Section 6.4.

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14. MISCELLANEOUS
14.1 Representations to Fiduciaries.
     Any person who is a fiduciary to this Plan is entitled to rely on
representations made by Members, Employees, and Beneficiaries about age and
other personal facts, unless that fiduciary knows those representations to be
false.
14.2 Standard of Fiduciary Conduct.
     Each fiduciary must discharge his or her duties and responsibilities for
the Plan solely in the interest of the Members and Beneficiaries of the Plan and
according to the terms hereof, for the exclusive purpose of providing benefits
to Members and their Beneficiaries, with the care, skill, prudence, and
diligence under the circumstances prevailing from time to time that a prudent
man acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of like character and with like aims.
14.3 Limitation on Liability.
     The duties and responsibilities allocated to each fiduciary under the Plan
are several and not joint responsibility of each, and no such fiduciary is
liable for the act or omission of any other fiduciary unless:
     (a) by one fiduciary’s failure to properly administer its specific
responsibility it has enabled that other person to commit a breach of fiduciary
responsibility;
     (b) one fiduciary knowingly participates in or knowingly undertakes to
conceal an act or omission of another person, knowing the act or omission to be
a breach; or
     (c) having knowledge of the breach of another, the fiduciary fails to make
reasonable efforts under the circumstances to remedy the breach.
14.4 Notice of Address.
     Each person entitled to benefits under the Plan must file with the
Administrator, in writing, the person’s mailing address and each change of
mailing address. Any communication, statement, or notice addressed to the person
at the indicated address is deemed sufficient for all purposes of the Plan, and
there shall be no obligation on the part of the Employers, the Administrator, or
the Trustee to search for or to ascertain the location of that person.
14.5 Fund To Be for the Exclusive Benefit of Members.
     The Employer Contributions and Matching Contributions to the Trust Fund
must be for the exclusive purpose of providing benefits to the Members and their
Beneficiaries, and no part of the Trust Fund shall revert to the Employers,
except as listed in paragraphs (a) and (b).

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     (a) If any part or all of the Employer Contribution is disallowed as a
deduction under Code Section 404 for the Employers, then, except as provided in
Section 4.3 to the extent of that disallowance it may be returned to the
contributing Employers within one year after the disallowance.
     (b) If the Internal Revenue Service refuses to issue or after the
expiration of 270 days following the submission of a request for a determination
has failed to issue an initial determination letter stating that the Plan as
contained herein meets the requirements of Code Section 401(a), the Employers
are entitled to receive a return of all Employer Contributions made hereunder.
Any such request for a return of Employer Contributions must be made by the
Employer within one year after the refusal or failure to issue the initial
determination.
14.6 Restrictions on Alienation.
     Except with respect to the creation, assignment, or recognition of a right
to a benefit payable with respect to a Member pursuant to a Qualified Domestic
Relations Order (as defined in Code Section 414(p)), no benefit payable under
the Plan to any person shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any
attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, or
charge the same shall be void. No such benefit shall be in any manner liable
for, or subject to, the debts, contracts, liabilities, engagements, or torts of
any person nor shall it be subject to attachment or legal process for or against
any person, and the same shall not be recognized under the Plan, except to the
extent as may be provided pursuant to a Qualified Domestic Relations Order or
otherwise required by law.
     Notwithstanding the foregoing, the Employer may direct the Trustee to
reduce a Member’s Plan Benefit by amounts the Member is ordered or required to
pay the Plan, without otherwise violating the provisions of this Section, where
such order or requirement (i) arises under a judgment of conviction entered into
on or after August 5, 1997 for a crime involving the Plan, under a civil
judgment (including a consent order or decree) entered by a court in an action
brought in connection with a violation of part 4 of subtitle B of title I of
ERISA or under a settlement entered into on or after August 5, 1997 with the
Department of Labor asserting a violation of part 4 of subtitle B of title I of
ERISA; and (ii) the judgment, order, decree or settlement expressly provides for
the offset of all or part of the amount ordered or required to be paid to the
Plan against the Member’s Plan Account.

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14.7 No Enlargement of Employee Rights.
     Nothing contained in the Plan is deemed to give an Employee the right to be
retained in the service of the Employer or to interfere with the right of the
Employer to discharge or retire any Employee at any time.
14.8 Headings.
     The headings of the Plan are inserted for convenience of reference only and
have no effect upon the meaning of the provisions hereof. In case of any
conflict, the text, rather than such titles or headings, shall control.
14.9 Governing Law.
     To the extent not preempted by ERISA or other federal law, the provisions
and validity and construction of this Plan are subject to and governed by the
laws of the Commonwealth of Virginia (excluding the choice of law rules
thereof).
14.10 Gender and Number.
     Whenever used herein, a masculine pronoun is deemed to include the feminine
pronoun, a singular word is deemed to include the singular and plural, and a
plural word is deemed to include the singular and plural in all cases where the
context requires.
14.11 Internal Revenue Service Approval.
     The Plan, as set forth herein, shall be submitted to the Internal Revenue
Service for, and is contingent upon receipt of, an initial determination that
the Plan qualifies as a stock bonus plan under Code Section 401(a) and an
employee stock ownership plan under Code Section 4975(e)(7) and that the related
trust qualifies for tax-exempt status under Code Section 501(a).
14.12 Rights of Prior Employees.
     The provisions of this Plan shall apply only to Employees who terminate
employment on or after the Effective Date. The rights and benefits, if any, of
an Employee whose employment terminated prior to the Effective Date shall be
determined in accordance with the prior provisions of the Plan in effect on the
date the Member’s employment terminated.
14.13 Satisfaction of Claims.
     Any payment to any Member, or to the Member’s legal representative or
Beneficiary, in accordance with the provisions of this Plan, shall, to the
extent thereof, be in full satisfaction of all claims hereunder against the
Trustee, the Committee, and the Employer, any of whom may require such Member,
legal representative, or Beneficiary, as a condition precedent to such payment,
to execute a receipt and release therefore in such form as shall be determined
by the Trustee, the Committee, or the Employer, as the case may be.

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14.14 Cy Pres.
     In case it becomes impossible for the Employer, the Committee, or the
Trustee to perform any act under this Plan, that act shall be performed which in
the judgment of the Committee will most nearly carry out the intent and purpose
of this Plan.
14.15 Counterparts.
     This Plan may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, and such counterparts shall together
constitute one and the same instrument.
14.16 Interpretation.
     It is intended that rules governing eligibility and participation under
this Plan and the NVR, Inc. Profit Sharing Plan be the same, and the terms of
this Plan should be construed to accomplish this intention.

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     This Plan is executed this 24 day of October 2002.
NVR, INC.
By: /s/ Dennis M. Seremet                                        
Its: Vice President and Controller

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