NVR, INC. 1998 DIRECTORS’ LONG-TERM STOCK OPTION PLAN STOCK OPTION AGREEMENT
Exhibit 10.34
THIS AGREEMENT is entered into as of , between NVR, Inc., a Virginia corporation
(hereinafter “NVR”), and , a non-employee director of NVR (the “Optionee”).
Recitals:
WHEREAS, NVR has adopted the NVR, Inc. 1998 Directors’ Long-Term Stock Option Plan ( the
“Plan”) providing for the grant under certain circumstances of options (the “Options”) exercisable
for the purchase of shares of NVR Common Stock (the “Shares”);
WHEREAS, NVR, under the terms and conditions set forth below, has offered and committed to
grant an Option under the Plan to the Optionee in connection with the Optionee’s service as a
non-employee director of NVR; and
WHEREAS, in consideration of the grant of the Option and other benefits, the Optionee is
willing to accept the Option provided for in this Agreement and is willing to abide by the
obligations imposed on him or her under this Agreement and the other responsibilities of his or her
position.
Provisions:
NOW, THEREFORE, in consideration of the mutual benefits hereinafter provided, and each
intending to be legally bound, NVR and the Optionee hereby agree as follows:
1. Acknowledgments of Optionee. The Option granted under this Agreement is intended to
provide to the Optionee an opportunity to purchase Shares. The Optionee provides service to NVR in
the capacity of a non-employee director. The Optionee acknowledges that such position, the Option
granted under this Agreement and the other benefits of his or her service in that capacity are
being conferred upon the Optionee only because of and on the condition of the willingness of the
Optionee to commit his or her best efforts and loyalty to NVR in the performance of the duties of
that position.
2. Effect of the Plan. The Option to be granted under this Agreement will be subject to all
of the terms and conditions of the Plan, which are incorporated by reference and made part of this
Agreement. The Optionee will abide by, and the Option granted to the Optionee will be subject to,
all of the provisions of the Plan and of this Agreement, together with all rules and determinations
from time to time issued by the Committee established to administer the Plan and by the Board of
Directors of NVR (hereinafter “Board”) pursuant to the Plan.
3. Grants. The Optionee is hereby granted an option to purchase 1,302 Shares, with an Option
Price of $ per Share.
4. Exercise; Conditions to Exercise.
(a) Period of Exercise. Subject to Section 4(g) below, the Option may be exercised in whole
or in part with respect to vested grants at any time after vesting. No Option may be exercised
after ten years from the date of grant. The Option may be exercised only with respect to whole
Shares.
(b) Vesting of Option. On each of December 31, ___, and ___, percent
( %) of the Options shall be exercisable in respect of the number of Shares initially subject
to the Option. Subject to Section 4(g), the foregoing installments, to the extent not exercised,
shall accumulate and be exercisable, in whole or in part, at any time and from time to time, after
becoming exercisable and prior to the termination of the Option. For the avoidance of doubt and by
way of example, if additional vesting occurs on December 31, 2010, the Options additionally vested
on that date could not be exercised until the first business day of 2011, at which time the
Optionee would not necessarily have to be a non-employee director in order to exercise the Options,
subject to the earlier termination of the Option pursuant to Paragraph 5 of this Agreement.
(c) Exercisability. In the event of a termination of the Optionee’s service as a non-employee
director other than for “Cause” (as defined in Section 5), resulting from the Optionee’s
involuntary termination without “Cause” (as defined in Section 5), death, disability or retirement
at normal retirement age, the Option shall become exercisable at the date of termination for an
additional portion of the previously nonexercisable portion of the Option which would have been
eligible to be exercised at the end of the year in which such termination occurs and the remaining
unvested portion of the Option shall immediately terminate. In addition, if the Optionee’s service
is terminated because the Optionee (i) does not stand for reelection as a director, (ii) is asked
not to stand for reelection as a director, or (iii) stands for reelection but is not reelected as a
director, the Option shall become exercisable at the date of termination for an additional portion
of the previously nonexercisable portion of the Option which the Optionee would have been eligible
to exercise if the Optionee had continued to provide service to the company for the remainder of
the calendar year in which his or her termination occurs and for one additional year thereafter and
the remaining unvested portion of the Option shall immediately terminate.
(d) Who May Exercise. During the Optionee’s lifetime, the Option rights may be exercised only
by him or her.
(e) Manner of Exercise. Option rights may be exercised by the delivery of written notice from
the Optionee to the Committee or the Committee’s designee specifying the number of Shares then
being exercised.
(f) Payment of Exercise Price. To exercise the Option, the Optionee must make full payment of
the Option Price to NVR in any one or more of the following ways:
(i) in cash, including check, bank draft, or money order; and/or
(ii) by the assignment and delivery to NVR of Shares owned by the
Optionee (or his estate) provided however, that such Shares have not been
acquired pursuant to the exercise of an option within the last six months
(unless the options were exercised following the death of the Optionee), are
free and clear of all liens and encumbrances and have a fair market value (as
determined by the closing price on the national securities exchange on which
the Shares are listed on the day preceding the day of exercise or by any
other method acceptable to the Committee in its absolute discretion) equal to
the applicable Option Price less than any portion thereof paid in cash.
The Optionee also must reimburse NVR for the amount of all applicable
withholding taxes at the rate required to be paid by NVR.
(g) Restrictions on Exercise - Regulatory Matters. The Option may not be exercised if such
exercise would constitute a violation of any applicable Federal or state statute or regulation or
if any required approval of a governmental authority having jurisdiction shall not have been
secured. NVR agrees to use reasonable diligence to obtain all such requisite approvals or
consents.
5. Termination of Option. If the Optionee ceases to be a non-employee director as a result of
a termination for “Cause” (as defined in this paragraph), the Option shall terminate. A
termination shall be for “Cause” in the event the Optionee ceases to be a non-employee director of
NVR as a result of (i) conviction of a felony, or other crime involving moral turpitude; (ii) gross
misconduct in connection with the performance of such Optionee’s duties (which shall include a
breach of such Optionee’s fiduciary duty of loyalty); (iii) a willful violation of any criminal law
involving a felony, including federal or state securities laws; or (iv) material breaches
(following notice and an opportunity to cure) of any covenants by the Optionee contained in any
agreement between the Optionee and NVR, including violations of the Company’s Code of Ethics. In
the event of a termination for “Cause”, the unexercised Option shall terminate immediately.
In no event may the Option be exercised by the Optionee if he or she has violated any provision of
this Agreement.
6. Adjustment Upon Changes in Shares. Adjustments specified in Section 7 relating to Shares
or securities of the Corporation shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. No fractional shares or units of other securities shall be
issued pursuant to any such adjustment, and any fractions resulting from any such adjustment shall
be eliminated in each case by rounding downward to the nearest whole share or unit.
7. Effect Of Changes In Capitalization.
(a) Changes in Shares. If the outstanding Shares are increased or decreased or changed
into or exchanged for a different number or kind of shares or other securities of the
Corporation by reason of any recapitalization, reclassification, stock split-up, combination of
stock, exchange of shares, stock dividend or other distribution payable on capital stock, or
other increase or decrease in such shares effected without receipt of consideration by the
Corporation occurring after the date the Option is granted, the number and kind of shares for
which the Option is outstanding shall be adjusted proportionately and appropriately , so that
the proportionate interest of the Optionee immediately following such event shall, to the extent
practicable, be the same as immediately prior to such event. Any such adjustment in the Option
shall not change the aggregate Option Price payable with respect to shares subject to the
unexercised portion of the Option but shall include a corresponding proportionate adjustment in
the Option Price per share.
(b) Reorganization in Which the Corporation Is the Surviving Entity. Subject to Section
7(c) of this Section, if the Corporation shall be the surviving entity in any reorganization,
merger or consolidation of the Corporation with one or more other entities, the Option shall
pertain to and apply to the securities to which a holder of the number of shares subject to the
Option would have been entitled immediately following such reorganization, merger or
consolidation, with a corresponding proportionate adjustment of the Option Price per share so
that the aggregate Option Price thereafter shall be the same as the aggregate Option Price of
the shares remaining subject to the Option immediately prior to such reorganization, merger or
consolidation.
(c) Reorganization in Which the Corporation Is Not the Surviving Corporation or Sale of
Assets or Shares. Upon the dissolution or liquidation of the Corporation, or upon a merger,
consolidation or reorganization of the Corporation with one or more other corporations in which
the Corporation is not the surviving corporation, or upon a sale of substantially all of the
assets of the Corporation to another corporation, or upon any transaction (including, without
limitation, a merger or reorganization in which the Corporation is the surviving corporation)
which results in any person or entity (or persons or entities acting as a group or in concert)
owning 20 percent or more of the combined voting power of all classes of stock of the
Corporation, or upon any person commencing a tender or exchange offer or entering into an
agreement or receiving an option to acquire beneficial ownership of 20 percent or more of the
total number of voting shares of the Corporation, all Options outstanding hereunder shall fully
vest. In the event of any such change of control, sale of assets or other corporate transaction
(a “Transaction”), each individual holding an Option shall have the right (i) immediately prior
to the
occurrence of such Transaction and (ii) during such period occurring prior to such
Transaction as the Administrator in its sole discretion shall designate, to exercise such Option in whole or
in part, whether or not such Option was otherwise exercisable at the time such Transaction
occurs and without regard to any installment limitation on exercise imposed pursuant to Section
4(b) above, but with regard to the limitation on exercise imposed pursuant to Section 4(g)
above. The Administrator shall send written notice of an event that will result in such an
exercise period to all individuals who hold Options not later than the time at which the
Corporation gives notice thereof to its stockholders.
8. Nonassignability. The options may not be transferred in any manner otherwise than by will
or the laws of descent and distribution.
9. Rights as a Holder of Shares. An Optionee or a transferee of an Option shall have no
rights as a Shareholder with respect to any Shares covered by his or her Option until the date
on which payment is made by him or her, and accepted by the Company, for such Shares. No
adjustment shall be made for distributions for which the record date is prior to the date such
payment is made and accepted.
10. Disclaimer of Rights. No provision in this Agreement shall be construed to confer upon
the Optionee the right to continue as a director of NVR.
11. Notices. Notices regarding the exercise of Options must be in writing, addressed and
delivered or mailed to: NVR, Inc., Plaza America Tower I, 00000 Xxxxx Xxxxxxx Xxxxx, Xxxxx 000,
Xxxxxx, XX 00000, Attn: Assistant Treasurer. All other notices to NVR must be in writing,
addressed and delivered or mailed to: NVR, Inc., Plaza America Tower I, 00000 Xxxxx Xxxxxxx Xxxxx,
Xxxxx 000, Xxxxxx, XX 00000, Attn: Sr. Vice President, Human Resources. All notices to the
Optionee must be in writing addressed and delivered or mailed to him or her at the address shown on
the records of NVR.
12. Governing Law. This Agreement and all determinations made and actions taken pursuant
thereto, shall be governed under the laws of the Commonwealth of Virginia.
13. Severability. If any part of this Agreement shall be determined to be invalid or
unenforceable, such part shall be ineffective only to the extent of such invalidity or
unenforceability, without affecting the remaining portions hereof.
14. Amendment, Suspension or Termination of Plan. The Company may from time to time amend,
suspend or, at any time, terminate the Plan or modify this option agreement with the consent of the
Optionee. An amendment, suspension or termination of the Plan shall not without the consent of the
Optionee, reduce or impair any rights or obligations under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the date first above written.
| NVR, INC. |
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| By: | ||||
| Its: | ||||
| OPTIONEE | ||||
