Document:

exv10w1

Exhibit 10.1

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (“Agreement”) made this 21st day of December 2010, between NVR, INC., a
Virginia corporation (the “Company”) and PAUL C. SAVILLE, (the “Executive”). References within
this Agreement to the Company refer to NVR and its subsidiaries and affiliates.

WHEREAS, the parties wish to terminate all prior employment agreements and amendments thereto as of
the Effective Date; and

WHEREAS, the parties wish to establish the terms of the Executive’s future employment with the
Company as of the Effective Date.

ACCORDINGLY, the parties agree as follows:

	1.	 	Employment, Duties and Acceptance.

	 	1.1	 	Employment by the Company. The Company hereby employs the Executive,
for itself and its affiliates, to render exclusive and full-time services to the
Company. The Executive will serve in the capacity of President and Chief Executive
Officer. The Executive will perform such duties as are imposed on the holder of that
office by the By-laws of the Company and such other duties as are customarily performed
by one holding such position in the same or similar businesses or enterprises as those
of the Company. The Executive will perform such other related duties as may be
assigned to him from time to time by the Company’s Board of Directors. The Executive
will devote his entire full working time and attention to the performance of such
duties and to the promotion of the business and interests of the Company. This
provision, however, will not prevent the Executive from investing his funds or assets
in any form or manner, or from

 

 

	 	 	 	acting as a member of the Board of Directors of any companies, businesses, or
charitable organizations, so long as such investments or companies do not compete
with the Company, subject to the limitations set forth in Section 7.1.

	 	1.2	 	Acceptance of Employment by the Executive. The Executive accepts such
employment and shall render the services described above.
	 
	 	1.3	 	Place of Employment. The Executive’s principal place of employment
shall be the Washington, D.C. metropolitan area, subject to such reasonable travel as
the rendering of services associated with such position may require.
	 
	 	1.4	 	Acknowledgement. By signing this Agreement, the Executive
acknowledges that he has received copies of the Company’s current Code of Ethics and
Standards of Business Conduct (collectively, the “Code”), has read and understood the
Code’s content, and agrees to comply with the Code in all respects.

	2.	 	Duration of Employment.

     This Agreement and the employment relationship hereunder will continue in effect for five (5)
years from January 2, 2011 through January 1, 2016. It may be extended beyond January 1, 2016 by
mutual, written agreement at any time. In the event of the Executive’s termination of employment
during the term of this Agreement, the Company will be obligated to pay all base salary, bonus and
other benefits then accrued, as well as cash reimbursement for all accrued but unused vacation,
plus, if applicable, the additional payments provided for in Sections 6.1, 6.2, 6.3, 6.5 and 6.7 of
this Agreement.

	3.	 	Compensation.

	 	3.1	 	Base Salary. As compensation for all services rendered pursuant to
this Agreement, the Company will pay to the Executive an annual base salary of EIGHT
HUNDRED THOUSAND DOLLARS ($800,000) payable in equal

 

 

	 	 	 	monthly installments of SIXTY SIX THOUSAND SIX HUNDRED SIXTY SIX DOLLARS AND
SIXTY-SIX CENTS ($66,666.66). The Company’s Compensation Committee of the Board of
Directors (the “Compensation Committee”) in its sole discretion may increase, but
may not reduce the Executive’s annual base salary.

	 	3.2	 	Bonuses. The Executive shall be eligible to be paid a bonus annually
in cash pursuant to the Company’s annual incentive plan, as determined by the
Compensation Committee of the Board of Directors, in a maximum amount of 100% of the
Executive’s annual base salary. This bonus shall be paid at the same time (or times)
and in the same manner as other senior executives of the Company. Entitlement to the
bonus is dependent on the Executive meeting certain goals, which shall be established
annually by the Company.
	 
	 	3.3	 	Participation in Employee Benefit Plans. The Executive shall be
permitted during the term of this Agreement, if and to the extent eligible to
participate in any group life, hospitalization or disability insurance plan, health
program, pension plan, Employee Stock Ownership Plan or similar benefit plan of the
Company, which may be available to other comparable executives of the Company
generally, on the same terms as such other executives. The Executive shall be entitled
to paid vacation and all customary holidays each year during the term of this Agreement
in accordance with the Company’s policies.
	 
	 	3.4	 	Expenses. Subject to such policies as may from time to time be
established by the Company’s Board of Directors, the Company shall pay or reimburse the
Executive for all reasonable expenses actually incurred or paid by the Executive in the
performance of the Executive’s services under this Agreement upon presentation of
expense statements or vouchers or such other supporting information as it may require.

 

 

	 	3.5	 	Stock Holding Requirement. The Executive is required to continuously
hold at all times NVR, Inc. common stock with a value equal to eight (8) times the
Executive’s base salary as then in effect, subject to adjustment at any time by the
Company’s Board of Directors upon thirty days notice.

	4.	 	Equity Incentive And Long-Term Incentive Plans.
	 
	 	 	The Executive is a participant in the 2000 Broadly Based Stock Option Plan and the 2010
Equity Incentive Plan. The Executive has entered into separate agreements governing the
terms of his participation in the Plans. The Executive is eligible to participate in any
future equity or long-term incentive plan at the discretion of the Compensation Committee.
	 
	5.	 	Deferred Compensation Plan.
	 
	 	 	The Executive has certain amounts fully earned under previous annual and long-term incentive
plans deferred within the Company’s Deferred Compensation Plans, and the Executive has the
opportunity to defer additional amounts fully earned under annual and long-term incentive
plans into the Company’s Deferred Compensation Plans. The amounts deferred are held in a
fixed number of shares of NVR, Inc. common stock within a Rabbi Trust, and will be
distributed to the Executive upon separation of service from the Company. All amounts held
for the Executive by the Rabbi Trust pursuant to the Deferred Compensation Plans are fully
vested and not subject to forfeiture for any reason, regardless of the reason for
termination. Distributions will be made pursuant to the terms of the Deferred Compensation
Plans, subject to the Company’s Financial Policies and Procedures File 1.21, Deferred
Compensation Plan Administration, and File 1.34, Insider Information, Trading and Compliance
(Executive Officers and Directors).

 

 

	6.	 	Termination, Disability or Retirement.

	 	6.1	 	Termination Upon Death. If the Executive dies during the term hereof,
this Agreement shall terminate, except that the Executive’s legal representatives shall
be entitled to receive the Executive’s base salary and accrued Bonus for the period
ending on the last day of the second calendar month following the month in which the
Executive’s death occurred. Accrued Bonus shall be calculated as one hundred percent
of Base Salary multiplied by the fraction (x) of the number of days in the calendar
year up to last day of the second calendar month following the month in which Executive
died divided by (y) 365 days. Payments due under this Section 6.1 will be made in a
lump sum within 10 days following six months and one day after the date of death.
	 
	 	6.2	 	Disability. If during the term hereof the Executive becomes physically
or mentally disabled, whether totally or partially, so that the Executive is, as
determined by the Company’s Board of Directors in its sole discretion, substantially
unable to perform his services hereunder, the Executive shall transfer from active to
disability status. Nothing in this Section 6.2 shall be deemed to in any way affect
the Executive’s right to participate in any disability plan maintained by the Company
and for which the Executive is otherwise eligible. If the Executive transfers to
disability status he would be entitled to receive the Executive’s Base Salary and
accrued Bonus for the period ending on the last day of the second calendar month
following the month in which the Executive is transferred to disability status.
Accrued Bonus shall be calculated as one hundred percent of Base Salary multiplied by
the fraction (x) of the number of days in the calendar year up to last day of the
second calendar month following the month in which the Executive was transferred to
disability status divided by (y) 365 days. Payments due under this Section 6.2 will be
made in a lump sum within 10 days following six months and one day after the date the
Executive transferred to disability status.

 

 

	 	6.3	 	Retirement. As of the effective date of this Agreement, Executive has
served the Company for over 29 consecutive years. In the event that the Executive
informs the Board of Directors that Executive is retiring from the Company, regardless
of the Executive’s age at the time of such announcement, the Executive will be entitled
to receive the Executive’s Base Salary for the period ending on the last day worked.
The payment of any Bonus amounts due to the Executive shall be payable, in the same
form and at the same time that all other employees receive their bonus payment, to the
extent performance goals for the year are achieved. Bonus shall be calculated as one
hundred percent of Base Salary multiplied by the fraction (x) of the number of days in
the calendar year up to last day worked by the Executive divided by (y) 365 days,
multiplied by the percent of maximum bonus achieved pursuant to the performance goals
in place in the year of retirement. In addition, the Executive shall be entitled to
payment of ONE HUNDRED PERCENT (100%) of his then annual Base Salary. Payments due
other than the bonus due, if any, under this Section 6.3 will be made in a lump sum
within 10 days following six months and one day after the date of retirement.
	 
	 	6.4	 	Termination for Cause. The Company may terminate the Executive’s
employment hereunder for Cause at any time by written notice to the Executive. In such
event, the Executive is not entitled to any severance pay. “Cause” means, as
determined by the Board of Directors and described herein, (i) conviction of a felony,
violation of any federal or state securities law, or other crime involving moral
turpitude; (ii) gross misconduct in connection with the performance of the Executive’s
duties as described in Section 1.1 herein (which shall include a breach of the
Executive’s fiduciary duty of loyalty); or (iii) a material breach of any covenants by
the Executive contained in any agreement between the Executive and the Company or its
affiliates (including but not limited to breaching affirmative or negative covenants or
undertakings set forth in Section 7 herein).

 

 

	 	6.5	 	Termination Without Cause. In the event the Company on sixty (60)
days’ notice terminates the Executive’s employment without Cause (as such term is
defined in Section 6.4) during the term of this Agreement, then as full satisfaction of
the Company’s obligations to the Executive, the Executive shall be entitled to receive
i) the Executive’s base salary and accrued Bonus for the period ending on the date of
termination and ii) an amount equal to TWO HUNDRED PERCENT (200%) of his then annual
base salary, paid in a lump sum within 10 days following six months and one day after
the date of termination. The Executive shall also be provided with outplacement
services with a firm jointly selected by the Executive and the Company at a cost not to
exceed ONE HUNDRED THOUSAND DOLLARS ($100,000).
	 
	 	6.6	 	Voluntary Termination. The Executive may on ninety (90) days’ notice
terminate his employment hereunder. In such event, he shall not be entitled to any
severance pay except in the circumstances described in Section 6.7 below.
	 
	 	6.7	 	Voluntary Termination-Change of Control. In the event the Executive
voluntarily terminates his employment hereunder in connection with or within one (1)
year after a Change of Control of the Company (as defined below), the Executive shall
receive a single lump sum payment in an amount equal to TWO HUNDRED PERCENT (200%) of
his then annual base salary, as well as his accrued pro-rata bonus (on the assumption
that the maximum annual bonus would have been paid pursuant to Section 3.2) through the
date of termination. Payment of such amount shall be made in a lump sum within 10 days
following six months and one day after the date of termination. For purposes of this
Agreement, “Change of Control” means (i) the dissolution or liquidation of
the Company or a merger, consolidation, or reorganization of the Company with one or
more other entities in which the Company is not the surviving entity, (ii) a sale of
substantially all of the assets of the Company to another person or entity, or (iii)
any transaction or series of transactions (including without limitation a merger or
reorganization in which the Company is the surviving entity) which results in any
person or entity (other

 

 

	 	 	 	than persons who are stockholders or affiliates immediately prior to the
transaction) owning 50% or more of the combined voting power of all classes of stock
of the Company, and where there has been a significant reduction in
Executive’s responsibilities.

	 	6.8	 	Voluntary Termination-Change in Senior Management Accompanied by Change in
Business Philosophy. If the Company elects a new Chairman (the “New Officer”) and
provided that the New Officer enacts major changes in the Company’s business
philosophy, mission or business strategies, the Executive may voluntarily terminate his
employment. To provide sufficient time for a transfer of the Executive’s
responsibilities and duties, he shall be required to provide ninety (90) days notice
prior to such voluntary termination and the Company shall have the option of extending
the notice an additional thirty (30) days. In the event the Executive voluntarily
terminates his employment in connection with or within one year after the election of a
New Officer accompanied by any of the changes described in this Section 6.8, he shall
not be entitled to any severance pay and shall not be bound by the “Covenant Not to
Compete” described in Section 7.
	 
	 	6.9	 	Effectiveness. In the event any of the events described in this
Section 6 should occur during the term of this Agreement, and result in payments to the
Executive which would in their normal course continue beyond the term of this
Agreement, such payments shall be made at such times and in such amounts as if the term
of this Agreement had not expired.

	7.	 	Covenant Not to Compete
	 
	 	 	The covenant set forth in Section 7.1 shall be applicable during the employment term and for
a period of one (1) year after termination in the event the Executive is terminated pursuant
to Section 6.3 “Retirement”, Section 6.4 for “Cause”, Section 6.5 “Without Cause” or to
Section 6.6 “Voluntary”.

 

 

	 	 	In the event that the Executive terminates pursuant to Section 6.7 “Voluntary Termination —
Change of Control” or Section 6.8 “Voluntary Termination-Change in Senior Management
Accompanied by Change in Business Philosophy”, the non-competition provisions of Section 7
become void. All other provisions in Section 7 remain in full force and effect.

	 	7.1	 	Scope. During the term of Executive’s employment under this Agreement,
and for the applicable period thereafter, Executive hereby covenants and agrees that
neither he nor any Family (as defined hereinbelow), at any time, directly or
indirectly, will anywhere in the Restricted Area (i) own more than 5% of outstanding
shares or control any residential Homebuilding, Mortgage Financing, or Settlement
Services Business that competes with the Company or an Affiliate; or (b) work for,
become employed by, or provide services to (whether as an employee, consultant,
independent contractor, partner, officer, director, or board member) any person or
entity that competes with the Company or an Affiliate in the residential Homebuilding
Business, Mortgage Financing Business, or Settlement Services Business. “Restricted
Area” means the counties and other units of local government in which the Company
engaged in the residential Homebuilding Business, Mortgage Financing Business or
Settlement Services Business, within the 24-month period prior to Executive’s
termination of employment. Further, Executive will not (a) hire or solicit
for hiring, any person, who, during the last twelve (12) months prior to Executive’s
termination of employment, was an employee of the Company or provided services as a
subcontractor to the Company; (b) utilize or solicit the services of, or acquire or
attempt to acquire real property, goods, or services from, any developer or
subcontractor utilized by the Company; or (c) solicit any customer or client or
prospective customer or client of the Company with whom the Executive had any
communications with or about whom the Executive had any access to information during
the 12-month period prior to the Executive’s termination of employment. Any investments
made by the Executive in private equity or hedge funds/vehicles

 

 

	 	 	 	for which the Executive does not hold a controlling financial or management interest
is not considered a violation of this Section 7.1.

	 	7.2	 	Definitions. For purposes of this Agreement, (i) the term “Family”
shall mean Executive, Executive’s spouse, and any minor children and any entity that
Executive, Executive’s spouse, and any minor children control, either directly or
indirectly; (ii) “control” for purposes of the immediately preceding clause shall mean
possession, directly or indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of voting securities, by contract, or
otherwise); and (iii) the term “Homebuilding Business” shall mean the business of
designing and constructing single family homes, the “Mortgage Financing Business” shall
mean the origination, underwriting, closing, placement or sale of residential home
mortgages (new home construction only), and the “Settlement Services Business” shall
mean the brokering of title insurance and the performance of title searches related to
loan closings in connection with the Mortgage Financing Business.
	 
	 	7.3	 	Reasonableness. The Executive acknowledges that the restrictions
contained in this Section 7 are reasonable and necessary to protect the business and
interests of the Company, and that it would be impossible to measure in money the
damages that would accrue to the Company by reason of the Executive’s failure to
perform his obligations under this Section 7. Therefore, the Executive hereby agrees
that in addition to any other remedies that the Company may have at law or at equity
with respect to this Section 7, the Company shall have the right to have all
obligations, undertakings, agreements, and covenants set forth herein specifically
performed, and that the Company shall have the right to obtain an order of such
specific performance (including preliminary and permanent injunctive relief to prevent
a breach or contemplated breach of any provision of this Section 7) in any court of the
United States or any state or political subdivision thereof, without the necessity of
proving actual damage; provided that the Company is not in breach of any of its
obligations hereunder.

 

 

	 	7.4	 	Blue-Pencilling. If any part of any provision of this Section 7 shall
be determined to be invalid or unenforceable under applicable law, such part shall be
ineffective to the extent of such invalidity or unenforceability only, without in any
way affecting the remaining terms of such provision or the remaining provisions of this
Section 7. The Executive hereby covenants and agrees that to the extent any provision
or portion of this Agreement shall be held, found, or deemed to be unreasonable,
unlawful, or unenforceable, then any necessary modifications shall be made (but only to
such extent) so that such provision or portion hereof shall be legally enforceable to
the fullest extent permitted by applicable law. The Executive further agrees and
authorizes any court of competent jurisdiction to enforce any such provision or portion
hereof in order that such provision or portion hereof shall be enforced by such court
to the fullest extent permitted by applicable law.
	 
	 	7.5	 	Confidentiality. In connection with Executive’s employment with the
Company, Executive has had or may have access to confidential, proprietary, and
non-public information concerning the business or affairs of the Company, including but
not limited to information concerning the Company’s customers, developers, lot
positions, subcontractors, employees, pricing, procedures, marketing plans, business
plans, operations, business strategies, and methods (collectively, “Confidential
Information”). Accordingly, both during and after Executive’s employment (regardless of
the reason for Executive’s termination), Executive shall not use or disclose to any
third party any Confidential Information for any reason other than as intended within
the scope of Executive’s employment. Upon termination of Executive’s employment for any
reason, or at any other time upon request of the Company, Executive shall immediately
deliver to the Company all documents, forms, blueprints, designs, policies, memoranda,
or other data (and copies hereof), in tangible, electronic, or intangible form,
relating to the business of the Company, if any, that are in the Executive’s
possession.

 

 

	 	7.6	 	No Conflict. The Covenant Not to Compete set forth in this Section 7
shall supersede and override any and all limitations on Executive’s right to compete
with the Company including, without limitation, any similar covenants not to compete in
the Stock Option Agreements executed in conjunction with the 2000 Broadly Based Stock
Option Plan and the 2010 Equity Incentive Plan and shall be the sole standard by which
Executive shall be bound.

	8.	 	Other Provisions.

	 	8.1	 	Notices. Any notice or other communication required or which may be
given hereunder shall be in writing and shall be delivered personally, telegraphed,
telexed, sent by facsimile transmission or sent by certified, registered or express
mail, postage prepaid, and shall be deemed given when so delivered personally,
telegraphed, telexed, or sent by facsimile transmission, or if mailed, four days after
the date of mailing as follows:

	 	(i)	 	if the Company, to:
	 
	 	 	 	NVR, Inc.
	 
	 	 	 	Attn: Senior Vice President of Human Resources
	 
	 	 	 	11700 Plaza America Drive
	 
	 	 	 	Suite 500
	 
	 	 	 	Reston, VA 20190

	 	(ii)	 	if the Executive, to:
	 
	 	 	 	Paul C. Saville
	 
	 	 	 	9616 Brookmeadow Drive
	 
	 	 	 	Vienna, VA 22182

 

 

	 	8.2	 	Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
agreements, written or oral, with respect thereto.
	 
	 	8.3.	 	Waiver and Amendments. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions hereof may be
waived, only by a written instrument signed by the parties or, in the case of a waiver,
by the party waiving compliance. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any right, power or privilege hereunder, nor any
single or partial exercise of any right, power or privilege hereunder, preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege hereunder. No waiver by the Company or the Executive of a breach of, or of a
default under, any of the provisions of this Agreement, nor the Company’s or the
Executive’s failure on one or more occasions, to enforce any of the provisions of this
Agreement or to exercise any right or privilege hereunder shall thereafter be construed
as a waiver of any subsequent breach or default of a similar nature, or as to the
waiver of any such provision, rights, or privileges hereunder.
	 
	 	8.4	 	Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Virginia.
	 
	 	8.5	 	Assignability. This Agreement, and the Executive’s rights and
obligations hereunder, may not be assigned by the Executive. The Company shall assign
this Agreement and its rights, together with its obligations, to any entity which will
substantially carry on the business of the Company subject to the Executive’s rights
set forth in this Agreement..

 

 

	 	8.6	 	Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
	 
	 	8.7	 	Headings. The headings in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this Agreement.
	 
	 	8.8	 	Indemnification. The Company agrees to indemnify the Executive, to the
fullest extent permitted under Virginia and any other applicable law, against any and
all expenses reasonably incurred by the Executive, including attorney’s fees, in
connection with any action, suit, or proceeding, whether civil, criminal, or
administrative and whether formal or informal (each a “proceeding”), to which the
Executive is a party (whether as plaintiff, defendant or otherwise) in which any person
(including but not limited to the Company or any governmental agency) seeks to (i)
impose on the Executive any sanction or liability by reason of any action the Executive
took or failed to take in his capacity as an executive officer of the Company or by
reason of the Executive’s status as an executive officer of the Company, or (ii)
recover or withhold from the Executive any compensation, equity award or other benefit
paid or payable to him by the Company or allocated or granted to him under any plan
maintained or administered by the Company; provided, however, that the Executive will
be entitled to indemnification under this Section 8.8 only if the Executive is
successful on the merits in the proceeding pursuant to a final non-appealable order.
For purposes of this Section 8.8, the Executive will be considered successful on the
merits if the proceeding is dismissed, with or without prejudice, pursuant to a final
non-appealable order. If the Executive is not wholly successful on the merits but is
successful as to one or more but less than all claims, issues or matters involved in
the proceeding, the Executive will be entitled to indemnification under this Section
8.8 for all expenses reasonably incurred in connection with each successfully resolved
claim, issue or matter. The Executive’s right to indemnification under this Section
8.8 does not limit any

 

 

	 	 	 	right to indemnification the Executive may have under the Company’s certificate of
incorporation, the Company’s bylaws, this Agreement, or any other agreement to which
the Executive is a party. The Company shall also use its best efforts to obtain
coverage for the Executive under an insurance policy (whether now in force or
hereinafter obtained) during the term of this Agreement covering the officers and
directors of the Company or its affiliates. This Section 8.8 shall survive the
termination of this Agreement for a period of three years following the last day of
the calendar year in which such termination occurs.

	 	8.9	 	Termination of Employment. The Executive will be deemed to have a
termination of employment for purposes of determining the timing of any payments or
benefits hereunder that are classified as deferred compensation only upon a “separation
from service” within the meaning of Internal revenue Code Section 409A.

	9.	 	Effective Date.
	 
	 	 	This Agreement shall be effective as of January 2, 2011.

IN WITNESS WHEREOF, The parties hereto, intending to be legally bound hereby, have executed this
Agreement as of the day and year first above mentioned.

NVR, INC.

	 	 	 	 	 	 	 

	By:

	 	/s/ Joseph Madigan
	 	/s/ Paul C. Saville
	 	 
	 

	 	 
	 	 	 	 
	 	 	JOSEPH MADIGAN	 	PAUL C. SAVILLEexv10w2

Exhibit 10.2

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (“Agreement”) made this 21st day of December 2010, between NVR, INC., a
Virginia corporation (the “Company”) and DENNIS M. SEREMET, (the “Executive”). References within
this Agreement to the Company refer to NVR and its subsidiaries and affiliates.

WHEREAS, the parties wish to terminate all prior employment agreements and amendments thereto as of
the Effective Date; and

WHEREAS, the parties wish to establish the terms of the Executive’s future employment with the
Company as of the Effective Date.

ACCORDINGLY, the parties agree as follows:

	1.	 	Employment, Duties and Acceptance.

	 	1.1	 	Employment by the Company. The Company hereby employs the Executive,
for itself and its affiliates, to render exclusive and full-time services to the
Company. The Executive will serve in the capacity of Senior Vice President of Finance,
Chief Financial Officer and Treasurer. The Executive will perform such duties as are
imposed on the holder of that office by the By-laws of the Company and such other
duties as are customarily performed by one holding such position in the same or similar
businesses or enterprises as those of the Company. The Executive will perform such
other related duties as may be assigned to him from time to time by the Company’s Board
of Directors. The Executive will devote his entire full working time and attention to
the performance of such duties and to the promotion of the business and interests of
the Company. This provision, however, will not prevent the Executive from investing
his funds or assets in any

 

 

	 	 	 	form or manner, or from acting as a member of the Board of Directors of any
companies, businesses, or charitable organizations, so long as such investments or
companies do not compete with the Company, subject to the limitations set forth in
Section 7.1.
	 
	 	1.2	 	Acceptance of Employment by the Executive. The Executive accepts such
employment and shall render the services described above.
	 
	 	1.3	 	Place of Employment. The Executive’s principal place of employment
shall be the Washington, D.C. metropolitan area, subject to such reasonable travel as
the rendering of services associated with such position may require.
	 
	 	1.4	 	Acknowledgement. By signing this Agreement, the Executive
acknowledges that he has received copies of the Company’s current Code of Ethics and
Standards of Business Conduct (collectively, the “Code”), has read and understood the
Code’s content, and agrees to comply with the Code in all respects.

	2.	 	Duration of Employment.

     This Agreement and the employment relationship hereunder will continue in effect for five (5)
years from January 2, 2011 through January 1, 2016. It may be extended beyond January 1, 2016 by
mutual, written agreement at any time. In the event of the Executive’s termination of employment
during the term of this Agreement, the Company will be obligated to pay all base salary, bonus and
other benefits then accrued, as well as cash reimbursement for all accrued but unused vacation,
plus, if applicable, the additional payments provided for in Sections 6.1, 6.2, 6.3, 6.5 and 6.7 of
this Agreement.

	3.	 	Compensation.

	 	3.1	 	Base Salary. As compensation for all services rendered pursuant to
this Agreement, the Company will pay to the Executive an annual base salary of

 

 

	 	 	 	FOUR HUNDRED SEVENTY FIVE THOUSAND DOLLARS ($475,000) payable in equal monthly
installments of THIRTY NINE THOUSAND FIVE HUNDRED EIGHTY THREE DOLLARS AND THIRTY
THREE CENTS ($39,583.33). The Company’s Compensation Committee of the Board of
Directors (the “Compensation Committee”) in its sole discretion may increase, but
may not reduce, the Executive’s annual base salary.
	 
	 	3.2	 	Bonuses. The Executive shall be eligible to be paid a bonus annually
in cash pursuant to the Company’s annual incentive plan, as determined by the
Compensation Committee of the Board of Directors, in a maximum amount of 100% of the
Executive’s annual base salary. This bonus shall be paid at the same time (or times)
and in the same manner as other senior executives of the Company. Entitlement to the
bonus is dependent on the Executive meeting certain goals, which shall be established
annually by the Company.
	 
	 	3.3	 	Participation in Employee Benefit Plans. The Executive shall be
permitted during the term of this Agreement, if and to the extent eligible to
participate in any group life, hospitalization or disability insurance plan, health
program, pension plan, Employee Stock Ownership Plan or similar benefit plan of the
Company, which may be available to other comparable executives of the Company
generally, on the same terms as such other executives. The Executive shall be entitled
to paid vacation and all customary holidays each year during the term of this Agreement
in accordance with the Company’s policies.
	 
	 	3.4	 	Expenses. Subject to such policies as may from time to time be
established by the Company’s Board of Directors, the Company shall pay or reimburse the
Executive for all reasonable expenses actually incurred or paid by the Executive in the
performance of the Executive’s services under this Agreement upon presentation of
expense statements or vouchers or such other supporting information as it may require.

 

 

	 	3.5	 	Stock Holding Requirement. The Executive is required to continuously
hold at all times NVR, Inc. common stock with a value equal to six (6) times the
Executive’s base salary as then in effect, subject to adjustment at any time by the
Company’s Board of Directors upon thirty days notice.

	4.	 	Equity Incentive And Long-Term Incentive Plans.
	 
	 	 	The Executive is a participant in the 2000 Broadly Based Stock Option Plan and the 2010
Equity Incentive Plan. The Executive has entered into separate agreements governing the
terms of his participation in the Plans. The Executive is eligible to participate in any
future equity or long-term incentive plan at the discretion of the Compensation Committee.
	 
	5.	 	Deferred Compensation Plan.
	 
	 	 	The Executive has certain amounts fully earned under previous annual and long-term incentive
plans deferred within the Company’s Deferred Compensation Plan, and the Executive has the
opportunity to defer additional amounts fully earned under annual and long-term incentive
plans into the Company’s Deferred Compensation Plan. The amounts deferred are held in a
fixed number of shares of NVR, Inc. common stock within a Rabbi Trust, and will be
distributed to the Executive upon separation of service from the Company. All amounts held
for the Executive by the Rabbi Trust pursuant to the Deferred Compensation Plan are fully
vested and not subject to forfeiture for any reason, regardless of the reason for
termination. Distributions will be made pursuant to the terms of the Deferred Compensation
Plan, subject to the Company’s Financial Policies and Procedures File 1.21, Deferred
Compensation Plan Administration, and File 1.34, Insider Information, Trading and Compliance
(Executive Officers and Directors).

 

 

	6.	 	Termination, Disability or Retirement.

	 	6.1	 	Termination Upon Death. If the Executive dies during the term hereof,
this Agreement shall terminate, except that the Executive’s legal representatives shall
be entitled to receive the Executive’s base salary and accrued Bonus for the period
ending on the last day of the second calendar month following the month in which the
Executive’s death occurred. Accrued Bonus shall be calculated as one hundred percent
of Base Salary multiplied by the fraction (x) of the number of days in the calendar
year up to last day of the second calendar month following the month in which Executive
died divided by (y) 365 days. Payments due under this Section 6.1 will be made in a
lump sum within 10 days following six months and one day after the date of death.
	 
	 	6.2	 	Disability. If during the term hereof the Executive becomes physically
or mentally disabled, whether totally or partially, so that the Executive is, as
determined by the Company’s Board of Directors in its sole discretion, substantially
unable to perform his services hereunder, the Executive shall transfer from active to
disability status. Nothing in this Section 6.2 shall be deemed to in any way affect
the Executive’s right to participate in any disability plan maintained by the Company
and for which the Executive is otherwise eligible. If the Executive transfers to
disability status he would be entitled to receive the Executive’s Base Salary and
accrued Bonus for the period ending on the last day of the second calendar month
following the month in which the Executive is transferred to disability status.
Accrued Bonus shall be calculated as one hundred percent of Base Salary multiplied by
the fraction (x) of the number of days in the calendar year up to last day of the
second calendar month following the month in which the Executive was transferred to
disability status divided by (y) 365 days. Payments due under this Section 6.2 will be
made in a lump sum within 10 days following six months and one day after the date the
Executive transferred to disability status.

 

 

	 	6.3	 	Retirement. As of the effective date of this Agreement, Executive has
served the Company for over 23 consecutive years. In the event that the Executive
informs the Board of Directors that Executive is retiring from the Company, regardless
of the Executive’s age at the time of such announcement, the Executive will be entitled
to receive the Executive’s Base Salary for the period ending on the last day worked.
The payment of any Bonus amounts due to the Executive shall be payable, in the same
form and at the same time that all other employees receive their bonus payment, to the
extent performance goals for the year are achieved. Bonus shall be calculated as one
hundred percent of Base Salary multiplied by the fraction (x) of the number of days in
the calendar year up to last day worked by the Executive divided by (y) 365 days,
multiplied by the percent of maximum bonus achieved pursuant to the performance goals
in place in the year of retirement. In addition, the Executive shall be entitled to
payment of ONE HUNDRED PERCENT (100%) of his then annual Base Salary. Payments due
other than the bonus due, if any, under this Section 6.3 will be made in a lump sum
within 10 days following six months and one day after the date of retirement..
	 
	 	6.4	 	Termination for Cause. The Company may terminate the Executive’s
employment hereunder for Cause at any time by written notice to the Executive. In such
event, the Executive is not entitled to any severance pay. “Cause” means, as
determined by the Board of Directors and described herein, (i) conviction of a felony,
violation of any federal or state securities law, or other crime involving moral
turpitude; (ii) gross misconduct in connection with the performance of the Executive’s
duties as described in Section 1.1 herein (which shall include a breach of the
Executive’s fiduciary duty of loyalty); or (iii) a material breach of any covenants by
the Executive contained in any agreement between the Executive and the Company or its
affiliates (including but not limited to breaching affirmative or negative covenants or
undertakings set forth in Section 7 herein).

 

 

	 	6.5	 	Termination Without Cause. In the event the Company on sixty (60)
days’ notice terminates the Executive’s employment without Cause (as such term is
defined in Section 6.4) during the term of this Agreement, then as full satisfaction of
the Company’s obligations to the Executive, the Executive shall be entitled to receive
i) the Executive’s base salary and accrued Bonus for the period ending on the date of
termination and ii) an amount equal to TWO HUNDRED PERCENT (200%) of his then annual
base salary, paid in a lump sum within 10 days following six months and one day after
the date of termination. The Executive shall also be provided with outplacement
services with a firm jointly selected by the Executive and the Company at a cost not to
exceed ONE HUNDRED THOUSAND DOLLARS ($100,000).
	 
	 	6.6	 	Voluntary Termination. The Executive may on ninety (90) days’ notice
terminate his employment hereunder. In such event, he shall not be entitled to any
severance pay except in the circumstances described in Section 6.7 below.
	 
	 	6.7	 	Voluntary Termination-Change of Control. In the event the Executive
voluntarily terminates his employment hereunder in connection with or within one (1)
year after a Change of Control of the Company (as defined below), the Executive shall
receive a single lump sum payment in an amount equal to TWO HUNDRED PERCENT (200%) of
his then annual base salary, as well as his accrued pro-rata bonus (on the assumption
that the maximum annual bonus would have been paid pursuant to Section 3.2) through the
date of termination. Payment of such amount shall be made in a lump sum within 10 days
following six months and one day after the date of termination. For purposes of this
Agreement, “Change of Control” means (i) the dissolution or liquidation of
the Company or a merger, consolidation, or reorganization of the Company with one or
more other entities in which the Company is not the surviving entity, (ii) a sale of
substantially all of the assets of the Company to another person or entity, or (iii)
any transaction or series of transactions (including without limitation a merger or
reorganization in which

 

 

	 	 	 	the Company is the surviving entity) which results in any person or entity (other
than persons who are stockholders or affiliates immediately prior to the
transaction) owning 50% or more of the combined voting power of all classes of stock
of the Company, and where there has been a significant reduction in
Executive’s responsibilities.
	 
	 	6.8	 	Voluntary Termination-Change in Senior Management Accompanied by Change in
Business Philosophy. If the Company elects a new Chairman and/or Chief Executive
Officer (the “New Officer”) and provided that the New Officer enacts major changes in
the Company’s business philosophy, mission or business strategies, the Executive may
voluntarily terminate his employment. To provide sufficient time for a transfer of the
Executive’s responsibilities and duties, he shall be required to provide ninety (90)
days notice prior to such voluntary termination and the Company shall have the option
of extending the notice an additional thirty (30) days. In the event the Executive
voluntarily terminates his employment in connection with or within one year after the
election of a New Officer accompanied by any of the changes described in this Section
6.8, he shall not be entitled to any severance pay and shall not be bound by the
“Covenant Not to Compete” described in Section 7.
	 
	 	6.9	 	Effectiveness. In the event any of the events described in this
Section 6 should occur during the term of this Agreement, and result in payments to the
Executive which would in their normal course continue beyond the term of this
Agreement, such payments shall be made at such times and in such amounts as if the term
of this Agreement had not expired.

	7.	 	Covenant Not to Compete.
	 
	 	 	The covenant set forth in Section 7.1 shall be applicable during the employment term and for
a period of one (1) year after termination in the event the Executive is terminated

 

 

	 	 	pursuant to Section 6.3 “Retirement”, Section 6.4 for “Cause”, Section 6.5 “Without Cause”
or to Section 6.6 “Voluntary”.
	 
	 	 	In the event that the Executive terminates pursuant to Section 6.7 “Voluntary Termination —
Change of Control” or Section 6.8 “Voluntary Termination-Change in Senior Management
Accompanied by Change in Business Philosophy”, the non-competition provisions of Section 7
become void. All other provisions in Section 7 remain in full force and effect.

	 	7.1	 	Scope. During the term of Executive’s employment under this Agreement,
and for the applicable period thereafter, Executive hereby covenants and agrees that
neither he nor any Family (as defined hereinbelow), at any time, directly or
indirectly, will anywhere in the Restricted Area (i) own more than 5% of outstanding
shares or control any residential Homebuilding, Mortgage Financing, or Settlement
Services Business that competes with the Company or an Affiliate; or (b) work for,
become employed by, or provide services to (whether as an employee, consultant,
independent contractor, partner, officer, director, or board member) any person or
entity that competes with the Company or an Affiliate in the residential Homebuilding
Business, Mortgage Financing Business, or Settlement Services Business. “Restricted
Area” means the counties and other units of local government in which the Company
engaged in the residential Homebuilding Business, Mortgage Financing Business or
Settlement Services Business, within the 24-month period prior to Executive’s
termination of employment. Further, Executive will not (a) hire or solicit
for hiring, any person, who, during the last twelve (12) months prior to Executive’s
termination of employment, was an employee of the Company or provided services as a
subcontractor to the Company; (b) utilize or solicit the services of, or acquire or
attempt to acquire real property, goods, or services from, any developer or
subcontractor utilized by the Company; or (c) solicit any customer or client or
prospective customer or client of the Company with whom the Executive had any
communications with or about whom the Executive had any access to information

 

 

	 	 	 	during the 12-month period prior to the Executive’s termination of employment. (Any
investments made by the Executive in private equity or hedge funds/vehicles for
which the Executive does not hold a controlling financial or management interest is
not considered a violation of this Section 7.1.
	 
	 	7.2	 	Definitions. For purposes of this Agreement, (i) the term “Family”
shall mean Executive, Executive’s spouse, and any minor children and any entity that
Executive, Executive’s spouse, and any minor children control, either directly or
indirectly; (ii) “control” for purposes of the immediately preceding clause shall mean
possession, directly or indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of voting securities, by contract, or
otherwise); and (iii) the term “Homebuilding Business” shall mean the business of
designing and constructing single family homes, the “Mortgage Financing Business” shall
mean the origination, underwriting, closing, placement or sale of residential home
mortgages (new home construction only), and the “Settlement Services Business” shall
mean the brokering of title insurance and the performance of title searches related to
loan closings in connection with the Mortgage Financing Business.
	 
	 	7.3	 	Reasonableness. The Executive acknowledges that the restrictions
contained in this Section 7 are reasonable and necessary to protect the business and
interests of the Company, and that it would be impossible to measure in money the
damages that would accrue to the Company by reason of the Executive’s failure to
perform his obligations under this Section 7. Therefore, the Executive hereby agrees
that in addition to any other remedies that the Company may have at law or at equity
with respect to this Section 7, the Company shall have the right to have all
obligations, undertakings, agreements, and covenants set forth herein specifically
performed, and that the Company shall have the right to obtain an order of such
specific performance (including preliminary and permanent injunctive relief to prevent
a breach or contemplated breach of any provision of this Section 7) in any court of the
United States or any state or political subdivision thereof, without the

 

 

	 	 	 	necessity of proving actual damage; provided that the Company is not in breach of
any of its obligations hereunder.
	 
	 	7.4	 	Blue-Pencilling. If any part of any provision of this Section 7 shall
be determined to be invalid or unenforceable under applicable law, such part shall be
ineffective to the extent of such invalidity or unenforceability only, without in any
way affecting the remaining terms of such provision or the remaining provisions of this
Section 7. The Executive hereby covenants and agrees that to the extent any provision
or portion of this Agreement shall be held, found, or deemed to be unreasonable,
unlawful, or unenforceable, then any necessary modifications shall be made (but only to
such extent) so that such provision or portion hereof shall be legally enforceable to
the fullest extent permitted by applicable law. The Executive further agrees and
authorizes any court of competent jurisdiction to enforce any such provision or portion
hereof in order that such provision or portion hereof shall be enforced by such court
to the fullest extent permitted by applicable law.
	 
	 	7.5	 	Confidentiality. In connection with Executive’s employment with the
Company, Executive has had or may have access to confidential, proprietary, and
non-public information concerning the business or affairs of the Company, including but
not limited to information concerning the Company’s customers, developers, lot
positions, subcontractors, employees, pricing, procedures, marketing plans, business
plans, operations, business strategies, and methods (collectively, “Confidential
Information”). Accordingly, both during and after Executive’s employment (regardless of
the reason for Executive’s termination), Executive shall not use or disclose to any
third party any Confidential Information for any reason other than as intended within
the scope of Executive’s employment. Upon termination of Executive’s employment for any
reason, or at any other time upon request of the Company, Executive shall immediately
deliver to the Company all documents, forms, blueprints, designs, policies, memoranda,
or other data (and

 

 

	 	 	 	copies hereof), in tangible, electronic, or intangible form, relating to the
business of the Company, if any, in the Executive’s possession.
	 
	 	7.6	 	No Conflict. The Covenant Not to Compete set forth in this Section 7
shall supersede and override any and all limitations on Executive’s right to compete
with the Company including, without limitation, any similar covenants not to compete in
the Stock Option Agreements executed in conjunction with the 2000 Broadly Based Stock
Option Plan and the 2010 Equity Incentive Plan and shall be the sole standard by which
Executive shall be bound.

	8.	 	Other Provisions.

	 	8.1	 	Notices. Any notice or other communication required or which may be
given hereunder shall be in writing and shall be delivered personally, telegraphed,
telexed, sent by facsimile transmission or sent by certified, registered or express
mail, postage prepaid, and shall be deemed given when so delivered personally,
telegraphed, telexed, or sent by facsimile transmission, or if mailed, four days after
the date of mailing as follows:

	 	(i)	 	if the Company, to:

NVR, Inc.

Attn: Senior Vice President of Human Resources

11700 Plaza America Drive

Suite 500

Reston, VA 20190
	 
	 	(ii)	 	if the Executive, to:

Dennis M. Seremet

12708 Greenbriar Road

Potomac, MD 20854

 

 

	 	8.2	 	Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
agreements, written or oral, with respect thereto.
	 
	 	8.3.	 	Waiver and Amendments. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions hereof may be
waived, only by a written instrument signed by the parties or, in the case of a waiver,
by the party waiving compliance. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any right, power or privilege hereunder, nor any
single or partial exercise of any right, power or privilege hereunder, preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege hereunder. No waiver by the Company or the Executive of a breach of, or of a
default under, any of the provisions of this Agreement, nor the Company’s or the
Executive’s failure on one or more occasions, to enforce any of the provisions of this
Agreement or to exercise any right or privilege hereunder shall thereafter be construed
as a waiver of any subsequent breach or default of a similar nature, or as to the
waiver of any such provision, rights, or privileges hereunder.
	 
	 	8.4	 	Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Virginia.
	 
	 	8.5	 	Assignability. This Agreement, and the Executive’s rights and
obligations hereunder, may not be assigned by the Executive. The Company shall assign
this Agreement and its rights, together with its obligations, to any entity which will
substantially carry on the business of the Company subject to the Executive’s rights
set forth in this Agreement.

 

 

	 	8.6	 	Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
	 
	 	8.7	 	Headings. The headings in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this Agreement.
	 
	 	8.8	 	Indemnification. The Company agrees to indemnify the Executive, to the
fullest extent permitted under Virginia and any other applicable law, against any and
all expenses reasonably incurred by the Executive, including attorney’s fees, in
connection with any action, suit, or proceeding, whether civil, criminal, or
administrative and whether formal or informal (each a “proceeding”), to which the
Executive is a party (whether as plaintiff, defendant or otherwise) in which any person
(including but not limited to the Company or any governmental agency) seeks to (i)
impose on the Executive any sanction or liability by reason of any action the Executive
took or failed to take in his capacity as an executive officer of the Company or by
reason of the Executive’s status as an executive officer of the Company, or (ii)
recover or withhold from the Executive any compensation, equity award or other benefit
paid or payable to him by the Company or allocated or granted to him under any plan
maintained or administered by the Company; provided, however, that the Executive will
be entitled to indemnification under this Section 8.8 only if the Executive is
successful on the merits in the proceeding pursuant to a final non-appealable order.
For purposes of this Section 8.8, the Executive will be considered successful on the
merits if the proceeding is dismissed, with or without prejudice, pursuant to a final
non-appealable order. If the Executive is not wholly successful on the merits but is
successful as to one or more but less than all claims, issues or matters involved in
the proceeding, the Executive will be entitled to indemnification under this Section
8.8 for all expenses reasonably incurred in connection with each successfully resolved
claim, issue or matter. The Executive’s right to indemnification under this Section
8.8 does not limit any

 

 

	 	 	 	right to indemnification the Executive may have under the Company’s certificate of
incorporation, the Company’s bylaws, this Agreement, or any other agreement to which
the Executive is a party. The Company shall also use its best efforts to obtain
coverage for the Executive under an insurance policy (whether now in force or
hereinafter obtained) during the term of this Agreement covering the officers and
directors of the Company or its affiliates. This Section 8.8 shall survive the
termination of this Agreement for a period of three years following the last day of
the calendar year in which such termination occurs.
	 
	 	8.9	 	Termination of Employment. The Executive will be deemed to have a
termination of employment for purposes of determining the timing of any payments or
benefits hereunder that are classified as deferred compensation only upon a “separation
from service” within the meaning of Internal revenue Code Section 409A.

	9.	 	Effective Date.
	 
	 	 	This Agreement shall be effective as of January 2, 2011.

IN WITNESS WHEREOF, The parties hereto, intending to be legally bound hereby, have executed this
Agreement as of the day and year first above mentioned.

NVR, INC.

	 	 	 	 	 	 	 

	By:

	 	/s/ Joseph Madigan
	 	 	 	/s/ Dennis M. Seremet
	 

	 	 
	 	 	 	 
	 	 	JOSEPH MADIGAN	 	 	 	DENNIS M. SEREMET

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