Our equity-based compensation plans provide for the granting of Options and RSUs to key management employees, including executive officers and members of our Board of Directors ("Directors"). The exercise price of Options granted is equal to the closing price of our common stock on the New York Stock Exchange (the “NYSE”) on the day prior to the date of grant. Options are granted for a 10-year term and typically vest in separate tranches over periods of 3 to 6 years. RSUs generally vest in separate tranches over periods of 2 to 6 years. Grants to key management employees are generally divided such that vesting for 50% of the grant is contingent solely on continued employment, while vesting for the remaining 50% of the grant is contingent upon both continued employment and the achievement of a performance metric based on our return on capital performance relative to a peer group during a 3-year period specified on the date of grant. Grants to directors generally vest solely based on continued service as a Director.


Equity-Based Compensation Plans	Shares Authorized	Options/RSUs Outstanding	Shares Available to Issue
2010 Equity Incentive Plan (1)	700,000	40,677	—
2014 Equity Incentive Plan (2)	950,000	415,281	140
2018 Equity Incentive Plan (3)	275,000	167,916	86,584

(1)The 2010 Equity Incentive Plan (the “2010 Plan”) authorizes us to issue Options and RSUs. There were 29,047 Options and 11,630 RSUs outstanding as of December 31, 2022. Shares can no longer be granted from this plan.

(3)The 2018 Equity Incentive Plan (the "2018 Plan") authorizes us to issue Options and RSUs. Of the 275,000 aggregate shares authorized to issue, all may be granted in the form of Options and up to 40,000 may be granted in the form of RSUs. There were 146,226 Options and 21,690 RSUs outstanding as of December 31, 2022. Of the 86,584 shares available to issue, 18,310 may be granted in the form of RSUs.

During the second quarter of 2022, we issued 165,456 Options and 16,864 RSUs in a block grant to key management employees and Directors. Block grants are generally made once every four years. Option and RSU grants for the twelve month period ended December 31, 2022 totaled 177,486 and 18,408, respectively, and were granted under the 2014 Plan and the 2018 Plan as follows:


Options Granted	2014 Plan	2018 Plan
Options - service-only (1)	57,635	33,691
Options - performance-based (2)	57,635	28,525
Total Options Granted	115,270	62,216
RSUs Granted
RSUs - service-only (3)	—	9,227
RSUs - performance-based (4)	—	9,181
Total RSUs Granted	—	18,408

1.Of the 91,326 service-only Options granted, 69,361 Options will vest in 25% increments on December 31, 2024, 2025, 2026, and 2027; 16,415 Options will vest in 50% increments on December 31, 2026 and 2027; 3,100 Options will vest in 25% increments on December 31, 2025, 2026, 2027, and 2028; 2,210 Options will vest in 50% increments on December 31, 2024 and 2025; and the remaining 240 Options will vest in 50% increments on December 31, 2027 and 2028. Vesting for the Options is contingent solely upon continued employment or continued service as a Director.

2.Of the 86,160 performance-based Options granted, 64,195 will vest in 25% increments on December 31, 2024, 2025, 2026, and 2027; 16,415 Options will vest in 50% increments on December 31, 2026 and 2027; 3,100 Options will vest in 25% increments on December 31, 2025, 2026, 2027, and 2028; 2,210 Options will vest in 50% increments on December 31, 2024 and 2025; and the remaining 240 Options will vest in 50% increments on December 31, 2027 and 2028. Vesting for the performance-based Options is contingent upon both continued employment and the Company's return on capital performance during the three year periods beginning either 2022 or 2023.

3.Of the 9,227 service-only RSUs granted, 5,261 will vest in 50% increments on December 31, 2024 and 2025; 3,168 will vest in 25% increments on December 31, 2024, 2025, 2026, and 2027; 596 will vest in 50% increments on December 31, 2026 and 2027; 123 will vest in 25% increments on December 31, 2025, 2026, 2027 and 2028; and the remaining 79 will vest in 50% increments on December 31, 2025 and 2026. Vesting for the RSUs is contingent solely upon continued employment.

4.Of the 9,181 performance-based RSUs granted, 5,215 will vest in 50% increments on December 31, 2024 and 2025; 3,168 will vest in 25% increments on December 31, 2024, 2025, 2026, and 2027; 596 will vest in 50% increments on December 31, 2026 and 2027; 123 will vest in 25% increments on December 31, 2025, 2026, 2027 and 2028; and the remaining 79 will vest in 50% increments on December 31, 2025 and 2026. Vesting for the performance-based RSUs is contingent upon both continued employment and the Company's return on capital performance during the three year periods beginning either 2022 or 2023.


	Shares	Weighted Avg. Per Share Exercise Price		Weighted Avg. Remaining Contract Life (years)	Aggregate Intrinsic Value
Stock Options
Outstanding at December 31, 2021	534,695	$	2,424.62
Granted	177,486	4,478.88
Exercised	(95,069)	2,068.60
Forfeited	(26,558)	3,283.34
Outstanding at December 31, 2022	590,554	$	3,060.71	5.9	$	917,424
Exercisable at December 31, 2022	317,019	$	2,201.66	3.8	$	764,250

RSUs
Outstanding at December 31, 2021	16,564
Granted	18,408
Vested	—
Forfeited	(1,652)
Outstanding at December 31, 2022	33,320				$	153,691
Vested, but not issued at December 31, 2022	5,756				$	26,550

To estimate the grant-date fair value of our Options, we use the Black-Scholes option-pricing model (the “Pricing Model”). The Pricing Model estimates the per share fair value of an option on its date of grant based on the following factors: the option’s exercise price; the price of the underlying stock on the date of grant; the estimated dividend yield; a risk-free interest rate; the estimated option term; and the expected volatility. For the risk-free interest rate, we use U.S. Treasury STRIPS which mature at approximately the same time as the option’s expected holding term. For expected volatility, we have concluded that our historical volatility over the option’s expected holding term provides the most reasonable basis for this estimate.


	2022			2021			2020
Estimated option life (years)	5.61			5.31			5.36
Risk free interest rate (range)	1.17%-4.36%			0.30%-1.55%			0.22%-1.94%
Expected volatility (range)	24.93%-30.89%			24.46%-30.80%			18.78%-32.48%
Expected dividend rate	—		%	—		%	—		%
Weighted average grant-date fair value per share of options granted	$	1,437.93		$	1,235.91		$	737.19

Compensation cost for Options and RSUs is recognized on a straight-line basis over the requisite service period for the entire award (from the date of grant through the period of the last separately vesting portion of the grant). For the recognition of equity-based compensation, the Options and RSUs which are subject to a performance condition are treated as a separate award from the “service-only” Options and RSUs, and compensation cost is recognized when it becomes probable that the stated performance target will be achieved. We currently believe that it is probable that the stated performance condition will be satisfied at the target level for all of our Options and RSUs granted. Compensation cost is recognized within the income statement in the same expense line as the cash compensation paid to the respective employees.

We recognize forfeitures of equity-based awards as a reduction to compensation costs in the period in which they occur. In 2022, 2021 and 2020, we recognized $82,537, $58,234, and $50,794 in equity-based compensation costs, respectively, and approximately $16,700, $12,000, and $10,500 in tax benefit related to equity-based compensation costs, respectively.

As of December 31, 2022, the total unrecognized compensation cost for all outstanding Options and RSUs equaled approximately $356,500. The unrecognized compensation cost will be recognized over each grant’s applicable vesting period with the latest vesting date being December 31, 2028. The weighted-average period over which the unrecognized compensation cost will be recorded is equal to approximately 2.6 years.

We settle Option exercises and vesting of RSUs by issuing shares of treasury stock. Shares are relieved from the treasury account based on the weighted average cost of treasury shares acquired. During the years ended December 31, 2022, 2021 and 2020, we issued 95,069, 74,027 and 159,151 shares, respectively, from the treasury account for Option exercises and vesting of RSUs. Information with respect to the vested RSUs and exercised Options is as follows:

We have a trustee-administered, profit sharing retirement plan (the “Profit Sharing Plan”) and an Employee Stock Ownership Plan (“ESOP”) covering substantially all employees. The Profit Sharing Plan and the ESOP provide for annual discretionary contributions in amounts as determined by our Board of Directors. The combined plan contribution for the years ended December 31, 2022, 2021 and 2020 was approximately $26,500, $24,700 and $22,500, respectively. We purchased approximately 5,100 and 4,500 shares of our common stock in the open market for the 2022 and 2021 plan year contributions to the ESOP. As of December 31, 2022, all shares held by the ESOP had been allocated to participants’ accounts. The 2022 plan year contribution was funded and fully allocated to participants in February 2023.

We have two deferred compensation plans (“Deferred Comp Plans”). The specific purpose of the Deferred Comp Plans is to i) establish a vehicle whereby named executive officers may defer the receipt of salary and bonus that otherwise would be nondeductible for Company tax purposes into a period where we would realize a tax deduction for the amounts paid, and ii) to enable certain employees who are subject to our stock holding requirements to acquire shares of our common stock on a pre-tax basis in order to more quickly meet, and maintain compliance with those stock holding requirements. Amounts deferred into the Deferred Comp Plans are invested in our common stock, held in a rabbi trust account, and are paid out in a fixed number of shares upon expiration of the deferral period.

The rabbi trust account held 106,697 shares of NVR common stock as of both December 31, 2022 and 2021. Shares held by the Deferred Comp Plans are treated as outstanding shares in our earnings per share calculation for each of the years ended December 31, 2022, 2021 and 2020.