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, and are granted for a 10-year term. Both Option and RSU grants typically vest in separate tranches over periods of 3 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	23,681	—
2014 Equity Incentive Plan (2)	950,000	273,143	1,778
2018 Equity Incentive Plan (3)	275,000	163,248	90,322

(1)The 2010 Equity Incentive Plan (the “2010 Plan”) authorized us to issue Options and RSUs. There were 18,211 Options and 5,470 RSUs outstanding as of December 31, 2023. 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 141,236 Options and 22,012 RSUs outstanding as of December 31, 2023. Of the 90,322 shares available to issue, 17,808 may be granted in the form of RSUs.

During 2023, we issued 4,100 Options under the 2014 Plan. Approximately half of the Options issued vest over four years in 25% increments beginning on December 31, 2025, while the remaining Options issued vest over two years in 50% increments beginning on December 31, 2027. Vesting for half of the Options issued is contingent solely upon continued employment, while vesting for the other half of the Options is contingent upon both continued employment and our return on capital performance during the three year periods beginning 2023.

In addition, we granted 1,904 RSUs under the 2018 Plan during 2023. Of the RSUs granted, 1,214 RSUs will vest over four years in 25% increments beginning on either December 31, 2025 or December 31, 2026, and 690 RSUs will vest over two years in 50% increments beginning on December 31, 2025. Vesting for half of the RSUs issued is contingent solely upon continued employment, while vesting for the other half of the RSUs issued is contingent upon both continued employment and our return on capital performance during the three year periods beginning on either 2023 or 2024, based on the RSU's initial vesting date.


	Shares	Weighted Avg. Per Share Exercise Price		Weighted Avg. Remaining Contract Life (years)	Aggregate Intrinsic Value
Stock Options
Outstanding at December 31, 2022	590,554	$	3,060.71
Granted	4,100	5,424.19
Exercised	(152,086)	1,660.69
Forfeited	(9,978)	3,820.80
Outstanding at December 31, 2023	432,590	$	3,557.78	6.0	$	1,489,264
Exercisable at December 31, 2023	227,684	$	2,827.99	4.1	$	950,003

RSUs
Outstanding at December 31, 2022	33,320
Granted	1,904
Vested	(5,936)
Forfeited	(1,806)
Outstanding at December 31, 2023	27,482				$	192,386
Vested, but not issued at December 31, 2023	5,461				$	38,229

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.


	2023			2022			2021
Estimated option life (years)	6.05			5.61			5.31
Risk free interest rate (range)	3.53%-4.69%			1.17%-4.36%			0.30%-1.55%
Expected volatility (range)	26.75%-30.01%			24.93%-30.89%			24.46%-30.80%
Expected dividend rate	—		%	—		%	—		%
Weighted average grant-date fair value per share of options granted	$	1,936.08		$	1,437.93		$	1,235.91

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 2023, 2022 and 2021, we recognized $99,507, $82,537, and $58,234 in equity-based compensation costs, respectively, and approximately $19,900, $16,700, and $12,000 in tax benefit related to equity-based compensation costs, respectively.

As of December 31, 2023, the total unrecognized compensation cost for all outstanding Options and RSUs equaled approximately $259,300. The unrecognized compensation cost will be recognized over each grant’s applicable vesting period with the latest vesting date being December 31, 2029. The weighted-average period over which the unrecognized compensation cost will be recorded is equal to approximately 2.4 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, 2023, 2022 and 2021, we issued 158,022, 95,069 and 74,027 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, 2023, 2022 and 2021 was approximately $26,200, $26,800 and $24,700, respectively. We purchased approximately 3,640 and 5,180 shares of our common stock in the open market for the 2023 and 2022 plan year contributions to the ESOP, respectively. As of December 31, 2023, all shares held by the ESOP had been allocated to participants’ accounts. The 2023 plan year contribution was funded and fully allocated to participants in February 2024.

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, 2023 and 2022. 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, 2023, 2022 and 2021.