Hovnanian Enterprises Inc PRE 14A, filed Jan 22, 2021

Hovnanian Enterprises Inc (HOV)

PRE 14A 2021-01-22 For: 2021-03-30

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	1.	The election of directors of the Company for the ensuing year, to serve until the next Annual Meeting of Shareholders of the Company, and until their respective successors may be elected and qualified;
	2.	The ratification of the selection of Deloitte & Touche LLP, an independent registered public accounting firm, to examine the financial statements of the Company for the year ending October 31, 2021;
	3.	The approval of the Amended and Restated 2020 Hovnanian Enterprises, Inc. Stock Incentive Plan;
	4.	The approval of the compensation of the Company’s named executive officers in a non-binding, advisory vote;
	5.	The approval of an amendment to the Company’s stockholder rights plan; and
	6.	The transaction of such other business as may properly come before the meeting and any adjournment thereof.

	Page
GENERAL	1
VOTING RIGHTS AND SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	2
PROPOSAL 1 — ELECTION OF DIRECTORS	4
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD OF DIRECTORS	7
PROPOSAL 2 — RATIFICATION OF THE SELECTION OF AN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	9
PROPOSAL 3 — APPROVAL OF THE AMENDED AND RESTATED 2020 HOVNANIAN ENTERPRISES, INC. STOCK INCENTIVE PLAN	9
PROPOSAL 4 — ADVISORY VOTE ON EXECUTIVE COMPENSATION	17
PROPOSAL 5 — APPROVAL OF AN AMENDMENT TO THE COMPANY’S STOCKHOLDER RIGHTS PLAN	18
THE COMPENSATION COMMITTEE	22
COMPENSATION DISCUSSION AND ANALYSIS	24
Executive Summary	24
Compensation Philosophy and Objectives	28
Fiscal 2020 Compensation Elements and Compensation Mix	31
Details of Compensation Elements	32
Actions for Fiscal 2021	40
Tax Deductibility and Accounting Implications	41
Timing and Pricing of Equity Awards	41
Stock Ownership Guidelines	41
EXECUTIVE COMPENSATION	42
Summary Compensation Table	42
Grants of Plan-Based Awards in Fiscal 2020	45
Outstanding Equity Awards at Fiscal 2020 Year-End	47
Option Exercises and Stock Vested in Fiscal 2020	52
Nonqualified Deferred Compensation for Fiscal 2020	53
Potential Payments Upon Termination or Change-in-Control Table	55
Pay Ratio Disclosure	58
NON-EMPLOYEE DIRECTOR COMPENSATION	59
THE AUDIT COMMITTEE	61
THE AUDIT COMMITTEE REPORT	62
FEES PAID TO PRINCIPAL ACCOUNTANT	62
PRINCIPAL ACCOUNTANT INDEPENDENCE	63
CORPORATE GOVERNANCE	63
BOARD OVERSIGHT OF RISK MANAGEMENT	64
LEADERSHIP STRUCTURE	64
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	65
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON MARCH 30, 2021	66
GENERAL	66
SHAREHOLDER PROPOSALS FOR THE 2022 ANNUAL MEETING	67

	On July 29, 2008, the Company’s Board of Directors declared a dividend of one Preferred Stock Purchase Right for each outstanding share of Class A Common Stock and Class B Common Stock (which ratio of rights to shares is subject to adjustment in accordance with the Amended Stockholder Rights Plan (as defined in Proposal 5). The dividend was paid to stockholders of record on August 15, 2008. Subject to the terms, provisions and conditions of the Company’s Amended Stockholder Rights Plan, if the Preferred Stock Purchase Rights become exercisable, each Preferred Stock Purchase Right would initially represent the right to purchase from the Company 1/10,000th of a share of Series B Junior Preferred Stock for a per share purchase price as specified in the Amended Stockholder Rights Plan. However, prior to exercise, a Preferred Stock Purchase Right does not give its holder any rights as a stockholder, including without limitation, any dividend, voting or liquidation rights.

(2)	Based upon the number of shares outstanding plus options currently exercisable or exercisable within 60 days of February 1, 2021, held by the applicable Director, nominee, named executive officer, group or other holder.

(3)	Each Depositary Share represents 1/1,000th of a share of 7.625% Series A Preferred Stock.

(4)	Includes shares of Class A Common Stock and shares of Class B Common Stock held in family-related trusts as to which Ara Hovnanian has shared voting power and shared investment power and shares of Class A Common Stock and shares of Class B Common Stock held by Mr. Hovnanian’s wife. Ara Hovnanian disclaims beneficial ownership of such shares, except to the extent of his potential pecuniary interest in such other accounts and trusts. Of the shares of Class A Common Stock and Class B Common Stock beneficially held by Mr. Hovnanian, and shares, respectively, have been pledged as collateral for a loan with Alex Brown, which remains outstanding. Also, of the Class A Common Stock beneficially held by Mr. Hovnanian, shares have been pledged as collateral for a loan with Morgan Stanley, which also remains outstanding.

(5)	Represents shares of Class B Common Stock held by the Kevork S. Hovnanian Family Limited Partnership, a Connecticut limited partnership (the “Limited Partnership”). Ara Hovnanian is the managing general partner of the Limited Partnership, and accordingly, the shares held by the Limited Partnership are included in “All Directors and executive officers as a group,” but such shares are not also included in Mr. Hovnanian’s separate figure of beneficial ownership. The business address of the Family Limited Partnership is 90 Matawan Road, Fifth Floor, Matawan, New Jersey 07747.

(6)	Represents shares of Class A Common Stock and shares of Class B Common Stock held by the Hovnanian Family 2012 L.L.C. (the “2012 LLC”). Ara Hovnanian is the special purpose manager with respect to investments in the Company, and accordingly, the shares held by the 2012 LLC are included in “All Directors and executive officers as a group,” but such shares are not also included in Mr. Hovnanian’s separate figure of beneficial ownership. The business address of the 2012 LLC is 90 Matawan Road, Fifth Floor, Matawan, New Jersey 07747.

(7)	Represents shares of Class A Common Stock and shares of Class B Common Stock held by the various trusts for the benefit of members of the family of Kevork S. Hovnanian. Ara Hovnanian is the special purpose trustee with respect to investments in the Company and, accordingly, the shares held by these trusts are included in “All Directors and executive officers as a group,” but such shares are not also included in Mr. Hovnanian’s separate figure of beneficial ownership. The business address of the trusts is 90 Matawan Road, Fifth Floor, Matawan, New Jersey 07747.

	HOVNANIAN ENTERPRISES, INC.
	90 Matawan Road, Fifth Floor, Matawan, N.J. 07747 (732) 747-7800

Name	Age	Company Affiliation	Year First Became a Director
Ara K. Hovnanian	63	President, Chief Executive Officer, Chairman of the Board & Director	1981
Robert B. Coutts	70	Director	2006
Edward A. Kangas	76	Director	2002
Joseph A. Marengi	67	Director	2006
Vincent Pagano Jr.	70	Director	2013
Robin Stone Sellers	68	Director	2018
J. Larry Sorsby	65	Executive Vice President, Chief Financial Officer & Director	1997

	Mr. Hovnanian has been Chief Executive Officer since July 1997 after being appointed President in 1988 and Executive Vice President in 1983. Mr. Hovnanian joined the Company in 1979, has been a Director of the Company since 1981 and was Vice Chairman from 1998 through November 2009. In November 2009, he was elected Chairman of the Board following the death of Kevork S. Hovnanian, the chairman and founder of the Company and the father of Mr. Hovnanian.

	Mr. Coutts retired from the position of Executive Vice President of Lockheed Martin Corporation (NYSE), which he held from 2000 to 2008. Previously, Mr. Coutts was President and Chief Operating Officer of the former Electronics Sector of Lockheed Martin from 1998 to 2000. He was elected an officer by the Board of Directors of Lockheed Martin in December 1996. Mr. Coutts held management positions with General Electric Corporation (NYSE) from 1972 to 1993 and was with GE Aerospace when it became part of Lockheed Martin in 1993. Mr. Coutts is the retired Chairman of Sandia Corporation, a subsidiary of Lockheed Martin Corporation, and serves on the Compensation Committee and Corporate Governance Committee of Stanley Black and Decker (NYSE) and the Board of Directors of Siemens Government Technologies, Inc., where he serves as Chairman of the Compensation Committee. Mr. Coutts is a member of the Board of Overseers, College of Engineering, Tufts University; a member of the Board of Wesley Theological Seminary; and a member of the Board of the Baltimore Symphony Orchestra. He was elected as a Director of Hovnanian Enterprises, Inc. in March 2006 and is a member of the Company’s Audit Committee and Compensation Committee.

	Mr. Kangas was the Global Chairman and Chief Executive Officer of Deloitte from December 1989 to May 2000, when he retired. He serves as the Chairman of the Board of Deutsche Bank USA Corporation and on the Boards of IntelSat (NYSE) and Vivus, Inc. (Nasdaq). He served as Lead Director at United Technologies from 2010 to 2018. He was on the Board of Directors of Tenet Healthcare Corporation (NYSE) from 2003 to 2019, Intuit from 2007 to 2016 and AllScripts, Inc. (Nasdaq) from 2008 to 2012. Mr. Kangas is a former Chairman of the Board of the National Multiple Sclerosis Society. Mr. Kangas was elected as a Director of Hovnanian Enterprises, Inc. in September 2002, is Chairman of the Company’s Audit Committee and a member of the Company’s Compensation Committee and Corporate Governance and Nominating Committee.

	Mr. Marengi, from July 2007 to March 2012, served as a Venture Partner for Austin Ventures. Prior to that, Mr. Marengi served as senior vice president for the Commercial Business Group of Dell Inc. (Nasdaq). In this role, Mr. Marengi was responsible for the Dell units serving medium business, large corporate, government, education and healthcare customers in the United States. Mr. Marengi joined Dell in July 1997 from Novell Inc. (Nasdaq), where he was president and chief operating officer. Mr. Marengi also served on the Boards of Directors of Quantum Corporation (NYSE) from 2008 to 2013 and Entorian Technologies, Inc. (formerly, the OTC Markets) from 2008 to 2012. Mr. Marengi was elected to the Board of Directors of Hovnanian Enterprises, Inc. in March 2006 and is the Chairman of the Company’s Compensation Committee and a member of the Company’s Audit Committee and Corporate Governance and Nominating Committee.

	Mr. Pagano was a partner at the law firm of Simpson Thacher & Bartlett LLP until his retirement at the end of 2012. He was the head of the firm’s capital markets practice from 1999 to 2012 and, before that, administrative partner of the firm from 1996 to 1999. He was a member of the firm’s executive committee during nearly all of the 1996 - 2012 period. He serves on the Board of Directors of Cheniere Energy Partners GP, LLC, the general partner of Cheniere Energy Partners (NYSE MKT), and also served on the Board of Directors of L3 Technologies, Inc. (NYSE) from 2013 until L3’s merger with Harris Corporation in 2019. Mr. Pagano was elected to the Board of Directors of Hovnanian Enterprises, Inc. in March 2013, is the Chairman of the Company’s Corporate Governance and Nominating Committee and is a member of the Company’s Audit Committee.

Name & Position	Stock Option Grants # of Shares Covered		Restricted Stock Unit Grants # of Shares Covered (1)		Total of All Columns in Table # of Shares Covered
Ara K. Hovnanian, President, Chief Executive Officer and Chairman of the Board		—		190,000		190,000
J. Larry Sorsby, Executive Vice President, Chief Financial Officer and Director		—		95,000		95,000
Lucian T. Smith III, Former Chief Operating Officer		—		—		—
Brad G. O’Connor, Senior Vice President, Chief Accounting Officer and Treasurer		—		7,000		7,000
Current Executive Officers as a Group		—		292,000		292,000
Robert B. Coutts, Director		—		6,949		6,949
Edward A. Kangas, Director		—		7,942		7,942
Joseph A. Marengi, Director		—		7,942		7,942
Vincent Pagano Jr., Director		—		6,949		6,949
Robin Stone Sellers, Director		—		6,949		6,949
Current Non-Executive Directors as a Group		—		36,731		36,731
All Employees, including All Current Officers who are not Executive Officers, as a Group		—		98,500		98,500

	Number of Class A Common Stock securities to be issued upon exercise of outstanding options, warrants and rights (1)(4)	Number of Class B Common Stock securities to be issued upon exercise of outstanding options, warrants and rights (1)(4)	Weighted average exercise price of outstanding Class A Common Stock options, warrants and rights (2)	Weighted average exercise price of outstanding Class B Common Stock options, warrants and rights (3)	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in columns (a)) (5)
Plan Category	(a)	(a)	(b)	(b)	(c)
Equity compensation plans approved by security holders:	709,852	546,472	$41.54	$56.95	203,082
Equity compensation plans not approved by security holders:	—	—			—
Total	709,852	546,472	$41.54	$56.94	203,082

	(1)	Includes the maximum number of shares that are potentially issuable under the MSUs granted in fiscal years 2016 through 2019 under the 2012 Plan and the actual number of shares for which performance has been met that are issuable under both the 2016 and 2018 Long-Term Incentive Programs under the 2012 Plan, subject to vesting. Also includes the maximum number of shares that are potentially issuable under the PSUs granted in fiscal 2020 under the 2020 Plan.

	(2)	Does not take into account 442,437 shares that may be issued upon the vesting of restricted stock and performance-based awards discussed in (1) above, nor 30,361 shares of restricted stock vested and deferred at the associates' election nor 50,763 shares of restricted stock deferred due to mandatory hold requirements, in each case, because they have no exercise price.

	(3)	Does not take into account 441,359 shares that may be issued upon the vesting of the performance-based awards discussed in (1) above nor 2,013 shares of restricted stock vested but not yet issued, in each case, because they have no exercise price.

	(4)	These shares include 6,399 shares of Class A Common Stock and 12,000 shares of Class B Common Stock that may be issued upon exercise of outstanding options with exercise prices greater than $150.00 per share.

	(5)	Under the Company’s equity compensation plans, securities may be issued in either Class A Common Stock or Class B Common Stock.

	●	Stock options outstanding:

	●	Weighted average exercise price of outstanding stock options:

	●	Weighted average remaining contractual term of outstanding stock options: years

	●	Full value stock awards outstanding (including performance-based stock awards based on achieving the actual outcome, where known, or the maximum potential outcome, where the performance period has not ended):

	●	Shares available for future grants of awards:

	●	Total Shares of Common Stock outstanding:

Fiscal Year	Number of Stock Options Granted (#)	Number of Time- Based RSUs Granted (#)	Number of Shares of Common Stock Vested Related to Performance- Based Awards (#) (1)	Weighted Average Number of Shares of Common Stock Outstanding (#) (2)
2020	—	142,231	4,284	6,188,627
2019	110,975	164,050	8,655	5,968,321
2018	37,825	37,888	5,390	5,940,594

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Fiscal 2020 EBIT	CEO Bonus*	CFO and COO Bonus*	CAO Bonus*
(millions)	(thousands)	(thousands)	(thousands)
Less than $200.0	$ 0.0	$ 0.0	$ 0.0
$ 210.0	$ 250.0	$ 200.0	$ 17.5
$ 220.0	$ 550.0	$ 310.0	$ 25.0
$ 230.0	$ 850.0	$ 420.0	$ 32.5
$ 240.0	$1,150.0	$ 530.0	$ 40.0
$ 250.0	$1,550.0	$ 680.0	$ 50.0
$ 260.0	$1,950.0	$ 830.0	$ 60.0
$ 270.0	$2,350.0	$ 980.0	$ 70.0
$ 280.0	$2,750.0	$1,130.0	$ 80.0
$ 290.0	$3,150.0	$1,280.0	$ 90.0
$ 300.0	$3,550.0	$1,430.0	$ 100.0

Number of Fiscal 2020 Quarter-Ends with Liquidity Balances At or Above	CEO Bonus*	CFO and COO Bonus*	CAO Bonus*
$200 Million	(thousands)	(thousands)	(thousands)
Less than 2	$ 0.0	$ 0.0	$ 0.0
2	$350.0	$200.0	$ 28.0
3	$550.0	$300.0	$ 50.0
4	$750.0	$450.0	$ 72.0

Fiscal 2020 Total Revenue	CEO Bonus*	CFO and COO Bonus*	CAO Bonus*
(millions)	(thousands)	(thousands)	(thousands)
Less than $2,400.0	$ 0.0	$ 0.0	$ 0.0
$2,400.0	$150.0	$ 75.0	$ 15.0
$2,450.0	$300.0	$125.0	$ 25.0
$2,500.0	$550.0	$200.0	$ 40.0

Alternative Capital Raises
Closed During Fiscal 2020	CEO Bonus*	CFO and COO Bonus*	CAO Bonus*
(millions)	(thousands)	(thousands)	(thousands)
$ 0.0	$ 0.0	$ 0.0	$ 0.0
$ 55.0	$100.0	$ 50.0	$ 10.0
$ 82.5	$200.0	$100.0	$ 20.0
$110.0	$450.0	$175.0	$ 35.0

New Communities Opened in	CEO Bonus*	CFO and COO Bonus*	CAO Bonus*
Fiscal 2020	(thousands)	(thousands)	(thousands)
0	$ 0.0	$ 0.0	$ 0.0
30	$250.0	$250.0	$ 50.0
40	$400.0	$400.0	$ 75.0
50	$550.0	$550.0	$100.0

Personal	CEO Bonus*	CFO and COO Bonus*	CAO Bonus*
Objectives**	(percent of salary)	(percent of salary)	(percent of salary)
Threshold	N/A	N/A	1.94%
Target	N/A	N/A	3.89%
Outstanding	N/A	N/A	5.83%

	*	The bonus is interpolated on a linear basis between the points shown in the tables. If EBIT exceeds $300 million, the EBIT bonus may be extrapolated at the Committee’s discretion.

	**	“Threshold”, “target” and “outstanding” levels are determined by the CEO and CFO, who may consult with other members of senior management, other than the CAO, and are used for internal evaluation purposes only.

Revenue Amount	Performance Multiplier*
$1 billion or less	0%

$1.5 billion	100%

$2 billion or more	200%

	Target Multiple of Base Salary	Target Payout Method
CEO	1.3500	100% cash
CFO	1.0000	100% cash
CAO	0.7500	100% cash

		Average Adjusted EBIT Return on Inventory for Fiscal 2020, Fiscal 2021 and Fiscal 2022
		10.50% or less	12.00%	13.50%	15.00%	16.50%	18.00%	19.50% or more
Cumulative Pre-tax Profit for Fiscal 2020 through Fiscal 2022 (in millions)	$100 or more	100% of target award	125% of target award	150% of target award	175% of target award	200% of target award	225% of target award	250% of target award
	$75	75% of target award	100% of target award	125% of target award	150% of target award	175% of target award	200% of target award	225% of target award
	$50	50% of target award	75% of target award	100% of target award	125% of target award	150% of target award	175% of target award	200% of target award
	$25	0% of target award	15% of target award	30% of target award	45% of target award	60% of target award	75% of target award	90% of target award
	Less than $25	0% of target award	0% of target award	0% of target award	0% of target award	0% of target award	0% of target award	0% of target award

	1.	60% of the award will become vested on October 31, 2022 and would be payable in January 2023;
	2.	20% of the award will become vested on October 31, 2023 and would be payable in January 2024; and
	3.	20% of the award will become vested on October 31, 2024 and would be payable in January 2025.

	Target Multiple
	of Base Salary	Target Payout Method
CEO	1.3500	50% cash / 50% shares
CFO	0.9000	50% cash / 50% shares
COO	0.9000	50% cash / 50% shares
CAO	0.5625	50% cash / 50% shares

	1.	60% of the award vested on October 31, 2020 and was paid in January 2021;
	2.	20% of the award will become vested on October 31, 2021 and would be payable in January 2022; and
	3.	20% of the award will become vested on October 31, 2022 and would be payable in January 2023;

	●	Auto allowance, including car maintenance and fuel expense;
	●	Personal use of the Company’s automobiles (including driver’s compensation) and of the Company’s fractional aircraft share (limited to the CEO);
	●	Executive term life insurance;
	●	Annual Executive Physical Exam Program;
	●	Golf membership or country club fee reimbursement for personal use (limited to the CEO and CFO); and
	●	Personal income tax preparation services (limited to the CEO).

Name and Principal Position	Year	Salary ($) (1)	Bonus ($)	Stock Awards ($) (2)	Option Awards ($) (3)	Non-Equity Incentive Plan Compensation ($) (4)	Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (5)	All Other Compen- sation ($) (6)	Total ($) (7)
Ara K. Hovnanian,	2020	1,252,429	—	1,435,450	—	5,887,437	54,484	367,661	8,997,461
President, Chief	2019	1,266,961	—	1,579,118	131,580	2,365,200	35,388	424,183	5,802,430
Executive Officer	2018	1,229,922	—	2,507,073	250,942	3,002,850	32,517	459,335	7,482,639
and Chairman of the Board

J. Larry Sorsby,	2020	712,917	—	717,725	—	2,828,242	46,580	185,887	4,491,351
Executive Vice	2019	721,188	—	565,672	131,580	1,427,160	27,673	168,627	3,041,900
President	2018	699,558	—	790,150	250,942	1,394,687	20,594	148,815	3,304,746
and Chief Financial Officer

Lucian T. Smith III,	2020	702,920	—	—	—	2,828,242	29,239	201,501	3,761,902
Chief Operating	2019	721,188	—	529,625	131,580	1,427,160	19,947	195,468	3,024,968
Officer (8)	2018	696,346	—	538,600	—	2,097,685	12,047	140,089	3,484,767

Brad G. O’Connor,	2020	435,923	—	146,580	—	580,450	11,877	61,748	1,236,578
Sr. Vice President,	2019	397,865	—	150,003	5,709	240,000	7,316	62,736	863,629
Chief Accounting	2018	370,210	—	104,106	27,719	245,885	5,574	55,880	809,374
Officer and Treasurer

Name	Term Life Insurance Premiums ($)	Company Contributions to the Executive’s Retirement Plan (401(k)) ($)	Company Contributions to the Executive Deferred Compensation Plan (EDCP) ($)
Ara K. Hovnanian	4,590	17,100	241,250
J. Larry Sorsby	6,552	17,100	110,453
Lucian T. Smith III	4,362	17,100	152,846
Brad G. O’Connor	1,793	17,100	21,941

Name	Year	Salary ($)	Cash Bonus ($)	LTIP Cash Realized ($)		Total of All Columns of Supplemental Table ($)
Ara K. Hovnanian	2020	1,252,429	3,835,240	1,786,019	(a)	6,873,688
	2019	1,266,961	2,365,200	6,080	(b)	3,638,241
	2018	1,229,922	2,813,150	183,620	(b)	4,226,692

J. Larry Sorsby	2020	712,917	2,049,465	677,759	(a)	3,440,141
	2019	721,188	1,427,160	2,293	(b)	2,150,641
	2018	699,558	1,323,155	69,240	(b)	2,091,953

Lucian T. Smith III	2020	702,920	2,049,465	677,759	(a)	3,430,144
	2019	721,188	1,427,160	1,981	(b)	2,150,329
	2018	696,346	2,035,878	59,826	(b)	2,792,050

Brad G. O’Connor	2020	435,923	323,068	224,022	(a)	983,013
	2019	397,865	240,000	763	(b)	638,628
	2018	370,210	222,093	23,029	(b)	615,332

	(a)	Reflects the cash portions of the 2018 LTIP awards that were realized in fiscal 2020 on the basis of performance through October 31, 2020, and vesting through the end of the fiscal year, which were paid in January 2021. These amounts are included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table along with the earned but unrealized cash portions of the 2018 LTIP awards and the performance-based annual cash bonus awards earned by the NEOs in fiscal 2020.

	(b)	Reflects the cash portions of the 2016 LTIP awards that were realized in fiscal 2018 and fiscal 2019 on the basis of performance through October 31, 2018, and vesting through the end of the fiscal year, which were paid in January 2019 and 2020, respectively. These amounts are included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table along with the performance-based annual cash bonus awards earned by the NEOs in fiscal 2018.

	Type of	Grant	Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($)			Estimated Future Payouts Under Equity Incentive Plan Awards (#)			All Other Stock Awards: Number of Shares or Stock Units	Grant Date Fair Value of Stock Awards
Name	Award	Date	Threshold	Target	Maximum	Threshold	Target	Maximum	(#)	($) (5)
Ara K.	Bonus (1)		0	2,300,000	5,850,000
Hovnanian	LTIP (2)	06/12/20	0	1,761,249	4,403,123
	PSUs (3)	06/12/20				0	95,000	190,000		1,435,450

J. Larry	Bonus (1)		0	1,345,000	2,805,000
Sorsby	LTIP (2)	06/12/20	0	742,630	1,856,575
	PSUs (3)	06/12/20				0	47,500	95,000		717,725

Lucian T.	Bonus (1)		0	1,345,000	2,805,000
Smith III

Brad G.	Bonus (1)		8,812	220,124	373,437
O’Connor	LTIP (2)	06/12/20	0	339,900	849,750
	RSUs (4)	06/12/20							7,000	146,580

		OPTION AWARDS (1)										STOCK AWARDS
Name	Grant Date	Number of Securities Underlying Unexercised Options Exercisable (#)		Number of Securities Underlying Unexercised Options Unexercisable (#)			Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)	Option Exercise Price ($)		Option Expiration Date		Number of Shares or Units of Stock that have not vested (#)			Market Value of Shares or Units of Stock that have not vested ($)			Equity Incentive Plan Awards: Number of Unearned Shares or other Rights that have not vested (#)			Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares or other Rights that have not vested ($)
Ara K.	06/10/11	13,500	(2)		—		—		48.25		06/09/21		—			—			—		—
Hovnanian	06/08/12	24,000			—		—		72.00		06/07/22		—			—			—		—
	06/14/13	12,000			—		—		157.00		06/13/23		—			—			—		—
	06/10/16	10,000	(3)		—		—		56.75		06/09/26		—			—			—		—
	06/10/16	—			—		—		—		—		—			—			3,000	(4)	95,280	(4)
	06/10/16	—			—		—		—		—		—			—			1,500	(5)	47,640	(5)
	06/10/16	—			—		—		—		—		—			—			1,500	(6)	47,640	(6)
	06/09/17	—			—		—		—		—		—			—			6,000	(7)	190,560	(7)
	06/09/17	—			—		—		—		—		—			—			3,000	(8)	95,280	(8)
	12/01/17	—			—		—		—		—		—	(9)		—	(9)		—		—
	06/08/18	—			10,000	(10)	—		61.00		06/07/28		—			—			—		—
	06/08/18	—			—		—		—		—		—			—			9,000	(11)	285,840	(11)
	06/08/18	—			—		—		—		—		—			—			6,000	(12)	190,560	(12)
	06/08/18	—			—		—		—		—		—			—			6,000	(13)	190,560	(13)
	03/18/19	—			—		—		—		—		—			—			147,410	(14)	4,681,742	(14)
	06/14/19	30,000	(15)		—		—		9.81		06/13/29		—			—			—		—
	06/14/19	—			—		—		—		—		—			—			72,000	(16)	2,286,720	(16)
	06/14/19	—			—		—		—		—		—			—			0	(17)	0	(17)
	06/14/19	—			—		—		—		—		—			—			0	(18)	0	(18)
	06/12/20	—			—		—		—		—		—			—			0	(19)	0	(19)

J. Larry	06/10/11	2,700	(2)		—		—		48.25		06/09/21		—			—			—		—
Sorsby	06/08/12	4,800			—		—		72.00		06/07/22		—			—			—		—
	06/14/13	2,400			—		—		157.00		06/13/23		—			—			—		—
	06/10/16	10,000	(3)		—		—		56.75		06/09/26		—			—			—		—
	06/10/16	—			—		—		—		—		—			—			600	(4)	19,056	(4)
	06/10/16	—			—		—		—		—		—			—			300	(5)	9,528	(5)
	06/10/16	—			—		—		—		—		—			—			300	(6)	9,528	(6)
	06/09/17	—			—		—		—		—		—			—			1,700	(7)	53,992	(7)
	06/09/17	—			—		—		—		—		—			—			850	(8)	26,996	(8)
	12/01/17	—			—		—		—		—		—	(9)		—	(9)		—		—
	06/08/18	—			10,000	(10)	—		61.00		06/07/28		—			—			—		—
	06/08/18	—			—		—		—		—		—			—			2,550	(11)	80,988	(11)
	06/08/18	—			—		—		—		—		—			—			1,700	(12)	53,992	(12)
	06/08/18	—			—		—		—		—		—			—			1,700	(13)	53,992	(13)
	03/18/19	—			—		—		—		—		—			—			62,155	(14)	1,974,043	(14)
	06/14/19	30,000	(15)		—		—		9.81		06/13/29		—			—			—		—
	06/14/19	—			—		—		—		—		—			—			20,400	(16)	647,904	(16)
	06/14/19	—			—		—		—		—		—			—			0	(17)	0	(17)
	06/14/19	—			—		—		—		—		—			—			0	(18)	0	(18)
	06/12/20	—			—		—		—		—		—			—			0	(19)	0	(19)

Lucian T.	06/08/12	1,000			—		—		54.00		06/07/22		—			—			—		—
Smith III	06/10/16	—			—		—		—		—		—			—			600	(4)	19,056	(4)
	06/09/17	—			—		—		—		—		—			—			800	(7)	25,408	(7)
	06/09/17	—			—		—		—		—		—			—			400	(8)	12,704	(8)
	12/01/17	—			—		—		—		—		—	(9)		—	(9)		—		—
	06/08/18	—			—		—		—		—		—			—			1,200	(11)	38,112	(11)
	06/08/18	—			—		—		—		—		—			—			800	(12)	25,408	(12)
	06/08/18	—			—		—		—		—		—			—			800	(13)	25,408	(13)
	03/18/19	—			—		—		—		—		—			—			55,940	(14)	1,776,654	(14)
	06/14/19	30,000	(15)		—		—		9.81		06/13/29		—			—			—		—
	06/14/19	—			—		—		—		—		—			—			20,400	(16)	647,904	(16)
	06/14/19	—			—		—		—		—		—			—			0	(17)	0	(17)
	06/14/19	—			—		—		—		—		—			—			0	(18)	0	(18)

(1)	The options represented in the table (except as discussed in footnotes (2), (3), (10) and (20) below) vest 25% per year beginning on the second anniversary of the date of grant. In each case, upon termination due to death, disability or qualified retirement, or, for awards granted after May 2014, in connection with a qualifying termination in the case of a change in control, the options, to the extent not previously vested and exercised, would become fully vested and exercisable, subject to having met the performance conditions, if any. As of October 31, 2020, Messrs. Hovnanian, Sorsby and Smith were retirement eligible and qualified for accelerated vesting on the basis of retirement. Therefore, for purposes of this table, all of these NEOs’ outstanding options for which the performance conditions, if any, have been met have been treated as immediately vested (except as discussed in footnotes (3) and (10) below). In addition, the Company has entered into a change in control severance agreement with Mr. O’Connor that would apply to vesting and exercise of his options upon a change in control. See footnote (6) to the Potential Payments Upon Termination or Change-in-Control Table. All stock option grants were made in the form of rights to receive shares of Class A Common Stock except, as discussed in the Compensation Discussion and Analysis, for the CEO, whose grants were made in the form of rights to receive shares of Class B Common Stock.

(2)	In February 2012, these awards were amended to require that, as a condition of vesting, the Company’s Adjusted EBITDA must exceed “fiscal 2011 actual EBITDA” for two consecutive fiscal years during the option term. Regardless of when the performance criteria were met, vesting would not have occurred sooner than 25% per year beginning on the second anniversary of the grant date. For this purpose, “fiscal 2011 actual EBITDA” was defined as the Company’s consolidated earnings before interest expense, income taxes, depreciation and amortization, each as reported in our consolidated financial statements for the year ended October 31, 2011. “Adjusted EBITDA” was based on EBITDA, calculated as described in the previous sentence, excluding inventory impairment losses and land option write-offs and gains or losses on extinguishment of debt. At the end of both fiscal 2012 and fiscal 2013, the Committee determined that the Company’s Adjusted EBITDA exceeded fiscal 2011 actual EBITDA and that the performance criteria of “two consecutive fiscal years” had been met.

(3)	Represents stock options granted on June 10, 2016 which have an exercise price set 33 1/3% above the closing stock price on the date of grant and vest on the fourth anniversary of the grant with no acceleration upon retirement or disability.

(4)	Represents the number and value of the shares underlying the portion of the MSU awards granted on June 10, 2016 that is not subject to financial performance conditions in addition to the stock price performance conditions applicable to all MSU awards. Based on the average closing trading price of the Company’s Class A Common Stock on the NYSE over the 60 calendar day period ending on October 31, 2020, stock price performance was between the threshold and target levels; therefore the number of shares underlying the awards is based on target stock price performance and the value is based on the closing trading price of the Company’s Class A Common Stock on October 30, 2020.

(5)	Represents the number and value of the shares underlying the portion of the MSU awards granted on June 10, 2016 that is subject to a debt reduction performance condition in addition to the stock price performance conditions applicable to all MSU awards. Because the actual performance achieved for the debt reduction performance condition was above the maximum performance level, the number and value of shares underlying the awards would have been based on maximum financial performance. However, based on the average closing trading price of the Company’s Class A Common Stock on the NYSE over the 60 calendar day period ending on October 31, 2020, stock price performance was between the threshold and target levels; therefore the number of shares underlying the awards is based on target stock price performance and the value is based on the closing trading price of the Company’s Class A Common Stock on October 30, 2020.