Document:

nvr-ex1036_559.htm

 

Exhibit 10.36

 

FIRST AMENDMENT TO THE
NVR, INC.
NONQUALIFIED DEFERRED COMPENSATION PLAN

WHEREAS, NVR, Inc. (the “Company”) currently maintains the NVR, Inc. Nonqualified Deferred Compensation Plan (the “Plan”), originally effective December 15, 2005 and restated effective November 4, 2015;

WHEREAS, Section 8.2 of the Plan authorizes the Company to amend and modify the Plan at any time and from time to time;

WHEREAS, the Company wishes to amend the Plan, as described below; and

NOW, THEREFORE, BE IT RESOLVED, that effective as of the execution date hereof, the following amendments shall be and hereby are adopted with respect to the Plan:

1.Section 4.1(d)(iv) shall be amended in its entirety to read as follows:

“(iv)as satisfaction of the Participant’s debt to the Company, provided that (A) the debt is incurred in the ordinary course of the Participant’s employment relationship, (B) the entire amount of the reduction does not exceed $5,000 in any calendar year or, to the extent it exceeds $5,000, is reasonably necessary to comply with Federal law regarding debt collection, and (C) the reduction is made at the same time and in the same amount as the debt otherwise would have been due and collected from the Participant; and/or”

2.Section 6.1 shall be amended by replacing the third sentence thereof to read as follows:

“Upon the death of a Participant, the full amount of the Participant’s Account (or the remaining amount of the Account in the event that installment payments have commenced) shall be paid to the Participant’s Beneficiary in a single lump sum as soon as administratively practicable but before December 31 of the calendar year following the year in which the Participant’s death occurred.”

*     *     *

To reflect the adoption of this First Amendment, the authorized officer hereby executes this First Amendment on behalf of the Company this 2nd day of November, 2016.

 

	
 
	
 
	
NVR, Inc.

	
 
	
 
	
 

	
 
	
By:
	
/s/ Daniel D. Malzahn

	
 
	
Name:
	
Daniel D. Malzahn

	
 
	
Title:
	
Senior Vice President, Chief Financial Officer and TreasurerExhibit

Federal Home Loan Bank of Topeka
 Executive Incentive Compensation Plan Targets
Goal Metrics, Metric Performance Ranges, Participant Eligibility and Metric Weights

This document specifies goal metrics, metric performance ranges/objectives, and metric weights for the participants (Participants) in the Executive Incentive Compensation Plan (Plan).
 
The Plan targets contained in this document specifically cover the 2017 Base Performance Period (January 1, 2017 through December 31, 2017) and the 2018 - 2020 Deferral Performance Period (January 1, 2018 through December 31, 2020).

		
	A.
	2017 Base Performance Period Metrics. The following goal metrics are assigned to the Participants under the Plan. All calculations including interest rates will be rounded to two decimal places.

		
	1.
	Adjusted Return Spread on Total Regulatory Capital

Definition: The spread between (a) adjusted net income divided by daily average total regulatory capital and (b) the average daily Overnight Federal funds effective rate (Fed Effective).

Measure:
Adjusted net income is defined as follows:
		
	◦
	Net income calculated under generally accepted accounting principles (GAAP)

		
	◦
	Plus recorded AHP assessments

		
	◦
	Excluding the impact or adjustment required because of Accounting Standards Codification 815 (ASC 815)

		
	◦
	Plus dividends on redeemable Class A and Class B Common Stock treated as interest expense under ASC 450

		
	◦
	Minus prepayment fees

		
	◦
	Minus/plus realized or unrealized gains/losses on securities (excludes any charges for other-than-temporary impairment of securities)

		
	◦
	Minus/plus gains/losses on mortgage loans held for sale

		
	◦
	Minus/plus gains/losses on early retirement of debt and related derivatives

		
	◦
	Minus/plus any amortization/accretion of premium/discount on unswapped securities in the FHLBank’s trading portfolio and any investment that is tied to an economic swap where an upfront fee was not received (not amortized/accreted under GAAP)

		
	◦
	Less a calculated 10% AHP assessment

Performance Range:
	
		
	 
	Annual Performance Range

	Threshold
	5.02%

	Target
	6.12%

	Optimum
	7.22%

		
	2.
	Net Income after Capital Charge

Definition: The dollar amount of adjusted net income as defined in the above metric which exceeds the cost of the required return on capital.

Measure: Adjusted income as defined in the Net Income after Capital Charge Definition above, less required return on capital. The required return on capital is the sum of the outstanding regulatory Class B Common Stock times the average of three-month LIBOR plus 1.00 percent for each day during the year plus the sum of regulatory Class A Common Stock and retained earnings times the average of three-month LIBOR for each day during the year. 

Performance Range:
	
		
	 
	Annual Performance Range

	Threshold
	$92,690,000

	Target
	$117,690,000

	Optimum
	$142,690,000

		
	3.
	Retained Earnings

Definition: The dollar amount of GAAP Retained Earnings as of 12/31/2017. 

Measure: Retained earnings as defined above as reported on the 12/31/2017 balance sheet.

Performance Ranges:
	
		
	 
	Annual Performance Range

	Threshold
	$789,184,000

	Target
	$818,184,000

	Optimum
	$847,184,000

		
	4.
	Diversity and Inclusion

Definition: FHLBank’s Diversity and Inclusion is defined as the promotion, to the maximum extent possible in balance with financially safe and sound business practices, the inclusion and utilization of diverse individuals, as defined in the Minority and Women Inclusion Policy, in all business activities of FHLBank. 

Measure: As a minimum requirement to achieving this goal, FHLBank management shall prepare and the board shall adopt a long-term Diversity and Inclusion (D&I) strategic plan to incorporate cultural diversity into all of FHLBank’s business activities by December 31, 2017. 

Upon determining that FHLBank has achieved the minimum requirement, half of the calculation of the D&I Incentive Award shall be measured by dividing the total number of FHLBank employees (excluding summer interns) who attended at least one D&I Awareness or Training Opportunity during the Base Performance Period by the total number of individuals employed by FHLBank (excluding summer interns) at any time during the Base Performance Period.

Performance Ranges:
	
		
	 
	Percentage

	Threshold
	40%

	Target
	60%

	Optimum 
	80%

The other half of the calculation of the D&I Incentive Award shall be measured by the total number of D&I Awareness or Training Opportunities made available during the Base Performance Period as follows: 

Performance Ranges:
	
		
	 
	Number of D&I Awareness or Training Opportunities

	Threshold
	6

	Target
	9

	Optimum 
	12

Diversity Awareness or Training Opportunities are defined as follows:

An FHLBank-wide event approved in advance by the Director of the Office of Minority and Women Inclusion that educates employees on diversity and inclusion, or encourages it among them. These opportunities can include, for example, specific training or lunch and learn events hosted by FHLBank’s Inclusion, Diversity, and Equality Advisory Council. 

		
	5.
	Risk Management - Market, Credit and Liquidity Risks

Definition: Management of FHLBank risks as determined by the weighted average rating by the board of directors in an annual evaluation of the Risk Appetite metrics in this area using a 1 (lowest) to 5 (highest) point scale. General risk categories are market, credit and liquidity risks. 

Performance Ranges
	
		
	 
	Score

	Threshold
	3.0

	Target
	4.0

	Optimum 
	5.0

Risk Management Metric Weights: The following metric weight for each goal metric is assigned to the Participants:
	
		
	Risk Management Category
	Weighting

	Liquidity Risk 
	30%

	Market Risk 
	40%

	Credit Risk 
	30%

	Total
	100%

		
	6.
	Risk Management - Compliance, Business and Operations Risks

Definition: Management of FHLBank risks as determined by the weighted average rating by the board of directors in an annual evaluation of the Risk Appetite metrics in this area using a 1 (lowest) to 5 (highest) point scale. General risk categories are compliance, business and operations risks. 

Performance Ranges 
	
		
	 
	Score

	Threshold
	3.0

	Target
	4.0

	Optimum 
	5.0

Risk Management Metric Weights: The following metric weight for each goal metric is assigned to the Participants:
	
		
	Risk Management Category
	Weighting

	Compliance Risk 
	30%

	Business Risk 
	35%

	Operations Risk 
	35%

	Total
	100%

		
	B.
	2018-2020 Deferral Performance Period Metrics.

These metrics apply to the 2018-2020 Deferral Performance Period.

	
				
	Minimum Requirement for Receiving a Final Deferred Incentive Award

	In order for Participants to be eligible to receive a Final Deferred Incentive Award for the 2018-2020 Deferral Performance Period, FHLBank must have a Market Value of Equity (MVE) of not less than 100 percent of FHLBank’s Total Regulatory Capital Stock (TRCS) outstanding (as defined in FHLBank’s Risk Management Policy), as of the last day of the Deferral Performance Period. Upon determining FHLBank has achieved this minimum requirement, the calculation of the Final Deferred Incentive Award amounts shall be measured by evaluating the following:

	 
	Threshold
	Target
	Optimum

	Total Return(1)
	10/11 or 11/11 vs FHLBanks
	5/11 vs FHLBanks
	2/11 or 1/11 vs FHLBanks

	Deferred Incentive
	 
	 
	 

	Performance Measure Percentage
	75%
	100%
	125%

	Weighting
	0.50
	0.50
	0.50

	Dollar Value (Deferred Incentive x Performance Measure Percentage x Weight)
	$
	$
	$

	 
	 
	 
	 

	MVE / Total Regulatory Capital (TRC)(2) 
	10/11 or 11/11 vs FHLBanks
	5/11 vs FHLBanks
	2/11 or 1/11
vs FHLBanks

	Deferred Incentive
	 
	 
	 

	Performance Measure Percentage
	75%
	100%
	125%

	Weighting
	0.50
	0.50
	0.50

	Dollar Value (Deferred Incentive x Performance Measure Percentage x Weight)
	$
	$
	$

	Final Deferred Incentive Award (Dollar value for Total Return + Dollar Value for MVE/TRC)
	 
	 
	 

Footnotes:
1)  Total Return. Total Return equals the Total Dividends, plus the Change in Retained Earnings, divided by the Average Total Regulatory Capital (TRC) over the three-year period. Total Dividends is defined as all dividends paid on all capital stock during the three-year period; Change in Retained Earnings is defined as the change in retained earnings from 12/31/2017 to 12/31/2020; and Average TRC is defined as the average daily ending balance of Regulatory Capital for dates starting with 01/01/2018 and ending 12/31/2020.  TRC is defined as total capital stock plus total retained earnings plus subordinated debt plus mandatorily redeemable capital stock. TRC will also include any additional capital from mergers that will be reported in the CRS statement of condition.  For performance comparison purposes, FHLBank Topeka will be ranked against the other FHLBanks, with the highest total return being the best performance, and ranking 1st out of the 11 FHLBanks.

2)  MVE/TRC. Using amounts reported on the Trendbook Analysis from the FHFA Call Report System (CRS), MVE/TRC is calculated by dividing base case MVE by TRC (as defined above) calculated at the end of the Deferral Performance Period. For performance comparison purposes, FHLBank Topeka will be ranked against the other FHLBanks, with the highest MVE/TRC being the best performance, and ranking 1st out of the 11 FHLBanks.

		
	C.
	Total Base Opportunity Metric Weights.

Total Base Opportunity Matrix
(As a percent of base)
	
				
	Participant
	Total Base Opportunity 1

	 
	Threshold
	Target
	Optimum

	Level 1
	 
	 
	 

	Interim CEO
	35
	70
	105

	Level 2
	 
	 
	 

	General Counsel
	27.5
	55
	82.5

	Chief Financial Officer (CFO)
	27.5
	55
	82.5

	Level 3
	 
	 
	 

	Interim Chief Administrative Officer (CAO)
	25
	50
	75

	Chief Information Officer (CIO)
	25
	50
	75

1 In the event FHLBank’s performance during the Base Performance Period results in the achievement of a Total Base Opportunity that exceeds 100% of a Participant’s base salary at the start of the Base Performance Period, the Total Base Opportunity shall be capped at 100% of the Participant’s base salary.

		
	D.
	Base Opportunity Metric Weights. The following metric weight for each goal metric is assigned to the Participants:

	
			
	Objective
	Interim CEO / CFO
	General Counsel /
Interim CAO / CIO

	1.Adjusted Return Spread on Total Regulatory Capital
	20%
	15%

	2.Net Income after Capital Charge
	20%
	15%

	3.Retained Earnings
	10%
	10%

	4.Diversity and Inclusion
	10%
	10%

	5.Risk Management - Market, Credit, Liquidity
	20%
	25%

	6.Risk Management - Compliance, Business, Operations 
	20%
	25%

	Total
	100%
	100%

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