EMPLOYMENT AGREEMENT by NVR INC
Company: NVR INC
SEC CIK: 906163
SEC Type: EX-10.2
SIC Code: 1531
SIC Industry: OPERATIVE BUILDERS
Date Filed: 2012-05-31
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Exhibit 10.2
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (“Agreement”) made this 31st day of May 2012, between NVR, INC., a Virginia corporation (the “Company”) and EUGENE J. BREDOW, (the “Executive”). References within this Agreement to the Company refer to NVR and its subsidiaries and affiliates.
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 Vice President and Controller. 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 three years and seven months from June 1, 2012 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 TWO HUNDRED TWENTY THOUSAND DOLLARS ($220,000) payable in equal monthly installments of EIGHTEEN THOUSAND THREE HUNDRED AND THREE DOLLARS AND 33 CENTS ($18,333.33). 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 four (4) 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 1998 Management Long-term Stock Option Plan, 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 the opportunity to defer certain amounts fully earned under annual and long-term incentive plans into the Company’s Deferred Compensation Plan. The amounts deferred will be 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 will be 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. If the Executive elects to terminate employment upon meeting the established criteria for Retirement prior to the term of this agreement, the Executive will be entitled to receive the Executive’s Base Salary for the period ending on the last day worked. Retirement means voluntary termination of employment after attainment of age 65. 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 |
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