DEF 14A of Hovnanian Enterprises Inc, Feb 2, 2024

DEF 14A of Hovnanian Enterprises Inc

Filed Feb 2, 2024 · FY20230001140361-24-005336

Open on EDGAR

  1. MIAMI, FL 33131

    | 171 | Non-Employee Director Compensation | | 174 | The Audit Committee | | 177 | The Audit Committee Report | | 179 | Fees Paid to Principal Accountant | | 180 | Principal Accountant Independence | | 180 | Corporate Governance | | 182 | Board Oversight of Risk Management | | 186 | Environmental, Social & Governance (ESG) Practices | | 192 | Leadership Structure | | 192 | Certain Relationships & Related Transactions | | 196 | Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on March 21, 2024 | | 197 | General | | 199 | Shareholder Proposals for the 2025 Annual Meeting |

  2. *Lead Independent Director **Non-Independent Director

    *Lead Independent Director **Non-Independent Director

  3. *Lead Independent Director **Non-Independent Director

    | BOARD of DIRECTORS | |

  4. *Lead Independent Director **Non-Independent Director

    ARA K. HOVNANIAN President, Chief Executive Officer, Chairman of the Board & Director 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.

  5. *Lead Independent Director **Non-Independent Director

    | | 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, served on the Board of Directors, Compensation Committee and Corporate Governance Committee of Stanley Black and Decker (NYSE) and currently serves on the Board of Directors of Siemens Government Technologies, Inc., where he is Chairman of the Compensation Committee. Mr. Coutts is a member of the Board of the Baltimore Symphony Orchestra and on the investment committee of Wesley Theological Seminary. 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. | | ROBERT B. COUTTS | | | Independent Director | |

  6. *Lead Independent Director **Non-Independent Director

    | | Ms. Hernandez-Kakol retired from the position of Senior Partner and Global Head of Management Consulting Practice of KPMG LLP, which she held from May 2019 to October 2021. She has served on the Toyota Financial Services Bank (TFSB) Board since September 2022 and is a member of TFSB’s Audit, Risk and Community Reconstruction Act committees. In January 2023 she was elected to the LPGA Foundation Board. Ms. Hernandez-Kakol is NACD Directorship Certified®. Previously, she led the Global Customer and Operations practice at KPMG from 2015 to 2019. Prior to KPMG, Ms. Hernandez-Kakol was at BearingPoint from 2003 to 2008 as Managing Director and Senior Vice President. She rejoined KPMG in 2008, holding various partner roles. She also held various positions at Telcordia Technologies from 1988 to 1999. Ms. Hernandez-Kakol has served on the board of Junior Achievement of NJ, the Hispanic Information Technology Executive Council (HITEC), KPMG’s Women’s Advisory Board and the STEM Committee of the National Academy Foundation. Ms. Hernandez-Kakol was elected as a Director of Hovnanian Enterprises, Inc. in January 2022 and is a member of the Company’s Audit Committee and a member of the Compensation Committee. | | MIRIAM HERNANDEZ-KAKOL | | | Independent Director | |

  7. *Lead Independent Director **Non-Independent Director

    | | Mr. Kangas was the Global Chairman and Chief Executive Officer of Deloitte from December 1989 to May 2000, when he retired. He served as the Chairman of the Board of Deutsche Bank USA Corporation from 2015 to 2022. He served as Lead Director at United Technologies from 2010 to 2018. He was on the Board of Directors of IntelSat (NYSE) from 2012 to 2022, Tenet Healthcare Corporation (NYSE) from 2003 to 2019, Intuit from 2007 to 2016, AllScripts, Inc. (Nasdaq) from 2008 to 2012 and Vivus Inc. (Nasdaq) from 2018 to 2020. 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 Lead Independent Director of the Company’s Board of Directors, Chairman of the Company’s Audit Committee and a member of the Company’s Compensation Committee and Corporate Governance and Nominating Committee. | | EDWARD A. KANGAS | | | Lead Independent Director | |

  8. *Lead Independent Director **Non-Independent Director

    | | 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. | | JOSEPH A. MARENGI | | | Independent Director | |

  9. *Lead Independent Director **Non-Independent Director

    | | 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), where he is chairman of the Conflicts Committee and a member of the Audit Committee, and also served on the Board of Directors of L3 Technologies, Inc. (NYSE) from 2013 until L3’s merger with Harris Corporation in 2019, where he was chairman of the Nominating and Corporate Governance Committee and a member of the Audit Committee. 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. | | VINCENT PAGANO JR. | | | Independent Director | |

  10. *Lead Independent Director **Non-Independent Director

    | | Ms. Sellers most recently served as Chief Executive Officer of Christie’s International Real Estate from 2012 through 2014. As CEO of Christie’s, Ms. Sellers was responsible for all aspects of the company’s business, including its global sales, marketing strategy, new development projects and finance groups. Ms. Sellers was CEO of Crossroads Property Strategies from 2008 to 2012 and head of real estate and a partner at McKinsey & Company from 1989 through 2007. From 1978 through 1989, Ms. Sellers practiced law in the real estate departments of two major New York City law firms. Ms. Sellers is a member of the Board of Advisors of the Weitzman School of Design at the University of Pennsylvania, is a member of the Board of Directors of Forbes Global Properties, a private real estate marketing firm, where she was Chair of the Board from 2019 through 2023. She is also the founder of First Chance, an organization that pays bail for indigent women in Palm Beach County, Florida. Ms. Sellers was elected to the Board of Directors of Hovnanian Enterprises, Inc. in June 2018 and is a member of the Company’s Audit Committee and Corporate Governance and Nominating Committee. | | ROBIN STONE SELLERS | | | Independent Director | |

  11. *Lead Independent Director **Non-Independent Director

    | | Mr. Sorsby retired in October 2023 from the positions of Chief Financial Officer of Hovnanian Enterprises, Inc. which he held since 1996 and Executive Vice President which he held since November 2000. Previously, Mr. Sorsby was also Senior Vice President from March 1991 to November 2000. He was elected as a Director of the Company in 1997. From 2013 through 2023, he served as Chairman of the Board of Visitors for Urology at The Children’s Hospital of Philadelphia (“CHOP”) and also served on the Foundation Board of Advisors at CHOP from 2015 through 2023. | | J. LARRY SORSBY | | | Director | |

  12. *Lead Independent Director **Non-Independent Director

    | MEETINGS of the BOARD of DIRECTORS & COMMITTEES of the BOARD OF DIRECTORS | |

  13. *Lead Independent Director **Non-Independent Director

    During the year ended October 31, 2023, the Board of Directors held six meetings. In addition, Directors considered Company matters and had communications with the Chairman of the Board of Directors and others outside of formal meetings. During the fiscal year ended October 31, 2023, each current Director attended 100% of the meetings of the Board of Directors and five of six Directors attended 100% of the Committee meetings on which each Director served, with one Director attending 94% of such meetings. The Company’s Corporate Governance Guidelines (“Governance Guidelines”) provide that directors are expected to attend the Annual Meeting of Shareholders. All of the current members of the Board of Directors attended the Annual Meeting of Shareholders held on March 28, 2023. AUDIT COMMITTEE The members of the Audit Committee of the Board of Directors during the fiscal year ended October 31, 2023 were Mr. Kangas, Mr. Coutts, Ms. Hernandez-Kakol, Mr. Marengi, Mr. Pagano and Ms. Sellers. The Board of Directors has determined that all of the members of the Audit Committee meet the standards for independence in our Corporate Governance Guidelines (the “Governance Guidelines”), which are available on the Company’s website at www.khov.com under “Investor Relations”, “Corporate Governance”, and the independence requirements mandated by the NYSE listing standards. During the fiscal year ended October 31, 2023, the Audit Committee met on twelve occasions. The Audit Committee is currently chaired by Mr. Kangas and is responsible for reviewing and approving the scope of the annual audit undertaken by the Company’s independent registered public accounting firm and meeting with them to review the results of their work as well as their recommendations. The Audit Committee selects the Company’s independent registered public accounting firm and also approves and reviews their fees. The Audit Committee is also responsible for the oversight of the Company’s Internal Audit Department. The Vice President of Internal Audit for the Company reports directly to the Audit Committee on, among other things, the Company’s compliance with certain Company procedures which are designed to enhance management’s understanding of operating issues and the results of the Audit Department’s annual audits of the various aspects of the Company’s business. For additional information related to the Audit Committee, see “The Audit Committee” beginning on page 174. The duties and responsibilities of the Audit Committee are set forth in its charter, which is available at www.khov.com under “Investor Relations”, “Corporate Governance.” COMPENSATION COMMITTEE The members of the Compensation Committee of the Board of Directors during the fiscal year ended October 31, 2023 were Mr. Marengi, Mr. Coutts, Ms. Hernandez-Kakol and Mr. Kangas. The Board of Directors has determined that all of the members of the Compensation Committee meet the standards for independence in our Governance Guidelines and the independence requirements mandated by the rules of the NYSE and SEC. In addition, all members of the Compensation Committee qualify as “Non-Employee Directors” for purposes of Rule 16b-3 under Exchange Act. The Compensation Committee is currently chaired by Mr. Marengi and is responsible for reviewing salaries, bonuses and other forms of compensation for the Company’s senior executives, key management employees and non-employee Directors and is active in other compensation and personnel areas as the Board of Directors from time to time may request. For a discussion of the criteria used and factors considered by the Compensation Committee in reviewing and determining executive compensation, see “The Compensation Committee” and “Compensation Discussion and Analysis” below. During the fiscal year ended October 31, 2023, the Compensation Committee met on five occasions. The duties and responsibilities of the Compensation Committee are set forth in its charter, which is available at www.khov.com under “Investor Relations”, “Corporate Governance.” CORPORATE GOVERNANCE & NOMINATING COMMITTEE The members of the Corporate Governance and Nominating Committee of the Board of Directors are Messrs. Pagano, Kangas and Marengi and Ms. Sellers. The Board of Directors has determined that all of the members of the Corporate Governance and Nominating Committee meet the standards for independence in our Governance Guidelines and the independence requirements mandated by the NYSE listing standards. During the fiscal year ended October 31, 2023, the Corporate Governance and Nominating Committee met on four occasions. The Corporate Governance and Nominating Committee is currently chaired by Mr. Pagano. The Corporate Governance and Nominating Committee is responsible for corporate governance matters, reviewing and recommending nominees for the Board of Directors, succession planning, ESG and cybersecurity risk oversight and other Board-related policies. The Corporate Governance and Nominating Committee also oversees the annual performance evaluation of the Board of Directors and its committees to determine if the Board and its committees are functioning effectively, the Board of Directors’ periodic review of the Governance Guidelines and compliance with the Company’s Related Person Transaction Policy. With respect to the annual performance evaluation, the Company’s Governance Guidelines require that each Director annually prepares an assessment of each Board committee on which such Director serves as well as of the full Board of Directors as to the effectiveness of each such committee and the full Board of Directors and any recommendations for improvement. The results of the self-evaluation are reported to the Board. In conducting its nomination function, among other factors, the Corporate Governance and Nominating Committee generally considers the size of the Board of Directors best suited to fulfill its responsibilities, the Board of Directors’ overall membership composition to ensure the Board of Directors has the requisite expertise and consists of persons with sufficiently diverse backgrounds, the independence of non-employee directors and possible conflicts of interest of existing and potential members of the Board of Directors, as more fully described under “Proposal 1—Election of Directors—Board of Directors—Composition” above. The Company does not have a specific policy regarding shareholder nominations of potential directors to the Board of Directors, other than through the process described under “Shareholder Proposals for the 2025 Annual Meeting” below. The Corporate Governance and Nominating Committee will consider director candidates recommended by shareholders in the same manner as it considers candidates recommended by others, including the Board of Directors. Possible nominees to the Board of Directors may be suggested by any Director and given to the Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee may seek potential nominees and engage search consultants to assist it in identifying potential nominees. The Corporate Governance and Nominating Committee’s charter provides that it shall consider all factors it considers appropriate, including the benefits of racial and gender diversity. The Corporate Governance and Nominating Committee recommends to the Board of Directors a slate of nominees for the Board of Directors for inclusion in the matters to be voted upon at each Annual Meeting. The Company’s Restated By-laws provide that Directors need not be shareholders. Vacancies on the Board of Directors, other than those resulting from removal by shareholders, may be filled by action of the Board of Directors.

  14. *Lead Independent Director **Non-Independent Director

    The duties and responsibilities of the Corporate Governance and Nominating Committee are set forth in its charter, which is available at www.khov.com under “Investor Relations”, “Corporate Governance”, and the Governance Guidelines are available at the same website address under “Investor Relations”, “Corporate Governance/Guidelines.” STRATEGY COMMITTEE Effective November 1, 2023, the Board established the Strategy Committee. The Strategy Committee is responsible for setting the agenda for discussions by, and providing other assistance to, the Board of Directors with respect to identifying and setting strategic goals and the methods to achieve such goals, identifying opportunities to create value for the Company’s stockholders, evaluating and executing strategic transactions, and recommending strategy related topics for the Board of Directors’ meetings. The members of the Strategy Committee of the Board of Directors are Messrs. Hovnanian, Sorsby and Kangas. The Strategy Committee is currently chaired by Mr. Hovnanian. Since the Strategy Committee was not formed until after fiscal 2023, the Committee did not meet during the fiscal year ended October 31, 2023. The duties and responsibilities of the Strategy Committee are set forth in its charter, which is available at www.khov.com under “Investor Relations”, “Corporate Governance.” The election of the nominees to the Company’s Board of Directors for the ensuing year, to serve until the next Annual Meeting of Shareholders of the Company, and until their respective successors are elected and qualified, requires that each director be elected by the affirmative vote of a majority of the votes cast by the shareholders of Class A Common Stock and Class B Common Stock, voting together, represented in person or by proxy at the 2024 Annual Meeting. In determining whether each director has received the requisite number of affirmative votes, abstentions and broker non-votes will have no impact on such matter because such shares are not considered votes cast. Mr. Hovnanian and others with voting power over the shares held by the members of the family of Kevork S. Hovnanian (the “Hovnanian Family”) and various trusts and entities established for the benefit of the Hovnanian Family have informed the Company that they intend to vote in favor of the nominees named in this proposal. Because of their collective voting power, these nominees are assured election. Our Board of Directors recommends that shareholders vote FOR the election of the nominees named in this proposal to the Company’s Board of Directors. PROPOSAL II

  15. *Lead Independent Director **Non-Independent Director

    | —Ratification of the Selection |

  16. *Lead Independent Director **Non-Independent Director

    | of an Independent Registered |

  17. *Lead Independent Director **Non-Independent Director

    | Public Accounting Firm |

  18. *Lead Independent Director **Non-Independent Director

    PROPOSAL II The selection of an independent registered public accounting firm to audit financial statements of the Company to be made available or transmitted to shareholders and to be filed with the SEC for the fiscal year ending October 31, 2024 is submitted to this 2024 Annual Meeting for ratification. Deloitte & Touche LLP has been selected by the Audit Committee of the Company to audit such financial statements. In the event that the shareholders fail to ratify the appointment, the Audit Committee will consider the view of the shareholders in determining its selection of the Company’s independent registered public accounting firm for the subsequent fiscal year. Even if the selection is ratified, the Audit Committee may, in its discretion, direct the appointment of a new independent registered public accounting firm at any time if the Audit Committee determines that such a change would be in the best interests of the Company and its shareholders. The Company has been advised that representatives of Deloitte & Touche LLP will attend the 2024 Annual Meeting to respond to appropriate questions and will be afforded the opportunity to make a statement if the representatives so desire. VOTE REQUIRED Ratification of the selection of Deloitte & Touche LLP as the Company’s independent registered public accounting firm to examine financial statements of the Company for the year ending October 31, 2024 requires the affirmative vote of a majority of the votes cast by the shareholders of Class A Common Stock and Class B Common Stock, voting together, represented in person or by proxy at the 2024 Annual Meeting. In determining whether the proposal has received the requisite number of affirmative votes, abstentions will have no impact on such matter because such shares are not considered votes cast. Mr. Hovnanian and others with voting power over the shares held by the Hovnanian Family and various trusts and entities established for the benefit of the Hovnanian Family have informed the Company that they intend to vote in favor of this proposal. Because of their collective voting power, this proposal is assured passage. Our Board of Directors recommends that shareholders vote FOR the ratification of the selection of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending October 31, 2024. PROPOSAL III

  19. *Lead Independent Director **Non-Independent Director

    | —Approval of the Third |

  20. *Lead Independent Director **Non-Independent Director

    | Amended And Restated 2020 |

  21. *Lead Independent Director **Non-Independent Director

    | Hovnanian Enterprises, Inc. |

  22. *Lead Independent Director **Non-Independent Director

    | Stock Incentive Plan |

  23. *Lead Independent Director **Non-Independent Director

    PROPOSAL III Shareholders are being asked to consider and approve a proposal to further amend and restate the Second Amended and Restated 2020 Hovnanian Enterprises, Inc. Stock Incentive Plan (as proposed to be amended, the “Amended Plan”). The Amended Plan, if approved, will permit the Company to continue making equity-based and other incentive awards to its employees, directors and consultants in a manner intended to properly incentivize such individuals by aligning their interest with the interests of the Company’s shareholders. The Company has been granting equity-based incentive awards under the existing Second Amended and Restated 2020 Hovnanian Enterprises, Inc. Stock Incentive Plan (the “Existing Plan”), however, the Company presently has insufficient shares of Common Stock (“Shares”) remaining available for future grants under the Existing Plan to make equity grants at a level that would be commensurate with the Company’s past practices and performance. As of the January 22, 2024 record date for the 2024 Annual Meeting, approximately 287,509 Shares (the “Remaining Reserve”) remained available for future grants of awards under the Existing Plan. The proposed Amended Plan will have a reserve of up to 587,509 Shares for future grants, which represents an increase of 300,000 Shares above the current Remaining Reserve and an increase of 1,150,000 Shares above the initial reserve of 565,000 Shares that had been initially approved under the 2020 Hovnanian Enterprises, Inc. Stock Incentive Plan when it was originally adopted in 2020 (the “Original Plan”). The Amended Plan is substantially identical to the Existing Plan, except for the contemplated Share reserve increase. The number and type of awards that may be granted under the Amended Plan are not determinable at this time as the Compensation Committee or the Board, as applicable, will make these determinations in its sole discretion. The principal purpose of the proposed Amended Plan is to facilitate the ability to grant contemplated long-term performance awards to key employees, directors and consultants of the Company. As described below under “Compensation Discussion and Analysis,” equity-based awards have historically formed a significant portion of our total compensation in order to align key employees’ and directors’ interests with those of our shareholders. Our ability to make equity-based awards helps us attract, retain and motivate key employees and directors as well as foster long-term value-creation. The Company’s Board of Directors has approved the adoption of the Amended Plan and, if the Amended Plan is approved by shareholders at the 2024 Annual Meeting, it will become immediately effective as of the date of the 2024 Annual Meeting. If shareholders do not approve the Amended Plan, the Existing Plan will continue to remain in effect according to its terms, and we may continue to make awards (subject to the Remaining Reserve) under the Existing Plan. For a discussion of the Amended Plan, see “Material Features of the Amended Plan” below. The Amended Plan is set forth in Appendix A hereto. BURN RATE AND DILUTION ANALYSIS In reaching our conclusion as to the appropriateness of the additional share proposal, we reviewed key metrics that are typically used to evaluate such proposals. One such metric many investors use is a calculation that quantifies how quickly a company uses its shareholder capital. The total number of Shares issuable under awards we have granted under the Existing Plan, as a percentage of our annual weighted average Shares outstanding (commonly referred to as the “burn rate”), has been on average 3.1% over the last three completed fiscal years. As applicable for the performance-based awards, this calculation is based on the amount of Shares issuable at the actual level of performance under awards as of the dates they were vested, except for market share unit (“MSU”) grants that are not subject to financial performance conditions in addition to the stock price performance conditions and which are included at target as of the dates they were granted and subsequently adjusted to reflect actual earnings levels above target based on actual stock price performance achievement. In addition to burn rate, many investors look at the economic effect of dilution. Assuming all Shares of the Company being requested to be included as the share reserve under the Amended Plan pursuant to this proposal were fully dilutive as of January 22, 2024, the dilutive effect of the increased number of shares above the Remaining Reserve on all outstanding Shares would be approximately 4%. When evaluating our burn rate and shareholder dilution as described above and related analysis and recommendations by Institutional Shareholder Services (“ISS”), we believe that shareholders should take into consideration the following relevant factors: The dollar value of our annual equity grants is market standard for a company with our level of revenue and EBIT performance. However, due to our debt level, our award levels may appear disproportionate when compared to our market capitalization. Accordingly, if ISS used our enterprise value (which accounts for debt) instead of market capitalization to calculate our Shareholder Value Transfer (“SVT”), we would be more in line with ISS benchmarks. In 2019 and 2020, ISS compared us to Non-Russell 3000 companies with higher burn rate benchmarks. Beginning in 2021, ISS started comparing us to Russell 3000 companies which resulted in our burn rate benchmarks falling dramatically. However, due to the lag in reporting performance awards in the burn rate, our 2019 and 2020 grants which were made under higher burn rate benchmarks are now being reflected in our burn rate analysis even though we are being measured against a lower benchmark. Accordingly, under ISS’ evaluation protocols, our award levels that were appropriate when granted are nevertheless adversely impacting our analysis now. Because we traditionally net settle our equity awards to satisfy tax withholding, ISS’ burn rate and dilution calculations are artificially high as their calculations are based on gross shares rather than net shares issued. Our burn rate includes time-based MSUs at deemed target level performance when granted. Any incremental shares earned over target are added to the burn rate calculation in the year earned. However, in certain years our MSUs paid out at less than target level, without a corresponding reduction adjustment to our burn rate. Our Board of Directors recommends that shareholders vote FOR the approval of the Amended Plan. MATERIAL FEATURES OF THE AMENDED PLAN The following is a brief summary of the material features of the Amended Plan. Because this is only a summary, it does not contain all the information about the Amended Plan that may be important to you and is qualified in its entirety by the full text of the Amended Plan as set forth in Appendix A hereto. PURPOSE

  24. *Lead Independent Director **Non-Independent Director

    The purpose of the Amended Plan is to aid the Company and its affiliates in recruiting and retaining key employees, directors and consultants of outstanding ability and to motivate those employees, directors and consultants to exert their best efforts on behalf of the Company and its affiliates by providing incentives through the granting of “Awards”, which consist of options, stock appreciation rights or other stock-based Awards (including performance-based Awards) granted pursuant to the Amended Plan. All employees, directors and consultants of the Company and its affiliates are eligible to participate in the Amended Plan if they are selected by the Compensation Committee of the Board of Directors (the “Committee”) to participate in the Amended Plan (any such individual, a “Participant”). For the fiscal year ended October 31, 2023, approximately 81 employees, 6 directors (includes non-employee directors only) and no consultants were selected by the Committee to participate in the Existing Plan. The Company anticipates that future participation by employees and directors under the Amended Plan will be similar to their historical participation under the Existing Plan. ADMINISTRATION The Amended Plan is generally administered by the Committee, which may delegate its duties and powers in whole or in part to any subcommittee thereof consisting solely of at least two individuals who are each intended to be “Non-Employee Directors” within the meaning of Rule 16b-3 under the Exchange Act and “independent directors” within the meaning of the applicable rules, if any, of any national securities exchange on which shares of Common Stock of the Company are listed or admitted to trading; provided, however, that any action permitted to be taken by the Committee may be taken by the Board of Directors in its discretion. Additionally, if the Company’s Chief Executive Officer is serving as a member of the Board of Directors, the Board of Directors may by specific resolution constitute the Chief Executive Officer as a “committee of one” with the authority to grant Awards covering up to 40,000 Shares per fiscal year to certain non-executive officer Participants. AWARDS Awards are determined (“granted”) by the Committee and are subject to the terms and conditions stated in the Amended Plan and to such other terms and conditions, not inconsistent therewith, as the Committee shall determine. Under the terms of the Amended Plan, vesting of (or lapsing of restrictions on) an Award at the time of grant may not occur any more rapidly than on the first anniversary of the grant date for such Award (or the date of commencement of employment or service, in the case of a grant made in connection with a Participant’s commencement of employment or service), other than (i) in connection with a Change in Control (as defined in the Amended Plan) or (ii) as a result of a Participant’s death, retirement, disability or involuntary termination of employment without cause; provided, that such minimum vesting condition will not be required on Awards covering, in the aggregate, a number of Shares not to exceed 5% of the Absolute Share Limit, as defined and described below under “Limitations.” However, the Committee retains the ability under the Amended Plan to waive terms and conditions applicable to an Award after the time of grant (including with respect to the ability to accelerate or waive vesting conditions) in connection with a Participant’s death or disability. Any stock options or stock appreciation rights granted must have a per share exercise price that is not less than 100% of the fair market value of the Company’s Common Stock underlying such awards on the date an award is granted (other than in the case of awards granted in substitution of previously granted awards). The maximum term for stock options and stock appreciation rights granted under the Amended Plan is ten years from the initial date of grant. EFFECT OF CERTAIN EVENTS ON AMENDED PLAN AND AWARDS In the event of any change in the outstanding Shares of Common Stock by reason of any stock dividend or split, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of Shares or other corporate exchange or change in capital structure, any distribution to shareholders of Common Stock other than regular cash dividends or any similar event, the Committee in its sole discretion and without liability to any person shall make such substitution or adjustment, if any, as it deems to be equitable, as to (1) the number or kind of Common Stock or other securities that may be issued as set forth in the Amended Plan or pursuant to outstanding Awards, (2) the exercise price relating to outstanding options or stock appreciation rights, (3) the maximum number or amount of Awards that may be granted to a Participant during a fiscal year and/or (4) any other affected terms of such Awards. Except as otherwise provided in an Award agreement, in the event of a Change in Control, (1) outstanding Awards will be subject to “double-triggered” vesting protection in the event that the Participant is involuntarily terminated without “cause” or terminates for “good reason” within the two year period following such Change in Control, (2) any service-based vesting condition will be deemed fully satisfied if the Company’s Shares cease to be publicly traded on a national securities exchange and (3) performance-based vesting conditions with respect to Awards will be deemed achieved based on the Share price in effect immediately prior to the Change in Control (in the case of vesting conditions linked to Share price) or based on deemed target level performance achievement (in the case of other performance-vesting conditions). Additionally, in the event that the Company or other surviving entity following the Change in Control will not be assuming outstanding Awards following the Change in Control, vesting of outstanding Awards will be automatically accelerated and such Awards will then be canceled in exchange for a payment in cash or other property equal to the value thereof as determined by the Committee which, in the case of options and stock appreciation rights, may equal the excess, if any, of value of the consideration to be paid in the Change in Control transaction to holders of the same number of Shares of Common Stock of the Company subject to such options or stock appreciation rights (or, if no consideration is paid in any such transaction, the fair market value of the Shares of Common Stock of the Company subject to such options or stock appreciation rights) over the aggregate exercise price of such options or stock appreciation rights. LIMITATIONS The Amended Plan provides that the total number of Shares of Common Stock of the Company that may be issued under the Amended Plan is 1,715,000 (the “Absolute Share Limit”). The number of Shares covered by Awards granted under the Amended Plan and awards that were outstanding under the Company’s 2012 Amended and Restated Stock Incentive Plan (the “2012 Plan”) as of the date the Existing Plan was initially approved by shareholders that terminate or lapse without the payment of consideration will be available for future grants under the Amended Plan. The Amended Plan also provides that the maximum number of Shares subject to Awards granted during a calendar year to any non-employee director serving on the Board, taken together with any cash fees paid to such non-employee director during such calendar year, shall not exceed $600,000 in total value (calculating the value of any such Awards based on the grant date fair value of such Awards for financial reporting purposes). No Award may be granted under the Amended Plan after the tenth anniversary of January 24, 2020 (i.e., the date when the Board of Directors initially adopted the Original Plan), but Awards theretofore granted may be extended beyond that date.

  25. *Lead Independent Director **Non-Independent Director

    The Amended Plan generally prohibits the Company from taking actions that would constitute a “repricing” of stock options or stock appreciation rights (for example, lowering exercise prices for outstanding Awards). Additionally, the Amended Plan precludes the payment of dividends or dividend equivalent rights on Awards unless and until the corresponding Award has vested in accordance with its terms. AMENDMENT AND TERMINATION The Committee may amend, alter or discontinue the Amended Plan, but no amendment, alteration or discontinuation shall be made which, (a) without the approval of the shareholders of the Company, would (except as provided in the Amended Plan in connection with adjustments in certain corporate events), increase the total number of Shares of Common Stock of the Company reserved for the purposes of the Amended Plan or change the maximum number of Shares of Common Stock of the Company for which Awards may be granted to any Participant or amend the prohibitions on repricing set forth above or (b) without the consent of a Participant, would materially impair any of the rights or obligations under any Award theretofore granted to such Participant under the Amended Plan; provided, however, that the Committee may amend the Amended Plan in such manner as it deems necessary to permit the granting of Awards meeting the requirements of the Internal Revenue Code of 1986, as amended (the “Code”), or other applicable laws. The Committee may not amend, alter or discontinue the provisions relating to a Change in Control after the occurrence of a Change in Control. CLAWBACK/FORFEITURE Any Awards granted under the Amended Plan may be subject to reduction, cancellation, forfeiture or recoupment to the extent required by applicable law or listed company rules, to the extent otherwise provided in an Award agreement at the time of grant or as determined pursuant to the Company’s recoupment policy. NONTRANSFERABILITY OF AWARDS Unless otherwise determined by the Committee, an Award shall not be transferable or assignable by the Participant otherwise than by will or by the laws of descent and distribution. Notwithstanding the foregoing, and subject to the conditions stated in the Amended Plan, a Participant may transfer an option (other than an option that is also an incentive stock option granted pursuant to the Amended Plan) or stock appreciation right in whole or in part by gift or domestic relations order to a family member of the Participant. Under no circumstances will the Committee permit the transfer of an Award for value. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

  26. The Committee’s actions and procedures are discussed in more detail next and further below under “Compensation Discussion and Analysis.”

    The Committee’s actions and procedures are discussed in more detail next and further below under “Compensation Discussion and Analysis.” COMPENSATION REVIEW PROCESS FOR THE NAMED EXECUTIVE OFFICERS The Committee, in conjunction with the Board of Directors and with management’s input, is responsible for making decisions related to the overall compensation of the NEOs, excluding the CEO, whose compensation is determined solely by the Compensation Committee and the Board of Directors. At least annually, the Committee establishes objective financial measures for determining bonus awards to the NEOs. The Committee also considers salary, employee benefits and discretionary bonus awards, if any, for the NEOs. In determining overall compensation for the NEOs, the Committee may consult with other members of the Board of Directors, including the CEO and the CFO, rather than relying solely on the Company’s financial performance measures in determining their compensation. These individuals often provide the Committee with insight on the individual performance of executives (other than with respect to themselves). The CEO and CFO are not present for the Committee’s evaluation of their individual performance. The Committee also reviews and analyzes the compensation of the named executive officers of the Company’s peer group of nine publicly-traded homebuilding companies (the “Peer Group”), discussed further below. The Committee may engage outside compensation consultants in relation to various compensation issues. The Committee may also instruct a compensation consultant to provide assistance in fostering an overall compensation program that aligns with its compensation philosophy to guide, motivate, retain and reward its executives for the achievement of the Company’s financial performance, strategic initiatives and individual goals, including increased long-term shareholder value during a challenging business environment. Notwithstanding any input from compensation consultants and management, the Committee has the sole discretion to make all final decisions related to NEO compensation. OUTSIDE COMPENSATION CONSULTANT For fiscal 2023, the Committee engaged Frederic W. Cook & Co., Inc. (“FW Cook”) as the Committee’s outside compensation consultant to provide certain services related to executive and non-employee Director compensation. In fiscal 2023, FW Cook assisted the Committee with its review of the Company’s annual bonus, long-term incentive and equity compensation plans for the CEO and other NEOs as well as its review of the compensation program for the non-employee Directors and the Compensation Committee’s compensation risk assessment. FW Cook does not provide any other services to the Company unless approved by the Committee, and no such other services were provided in fiscal 2023. After considering the relevant factors, the Company determined that no conflicts of interest have been raised in connection with the services FW Cook performed for the Committee in fiscal 2023. The Committee’s primary objective in engaging FW Cook has been to obtain advice and feedback related to maintaining programs that provide competitive compensation opportunities for executives compared to the Peer Group. FW Cook also provided assistance to the Committee in fostering an overall compensation program as discussed above. The Committee weighs the advice and feedback from its compensation consultant and the members of the Board of Directors, as well as the views of, and information gathered by, the members of management it has consulted in conjunction with its review of other information the Committee considers relevant, when making decisions or making recommendations to the full Board of Directors regarding executive compensation. BOARD COMMUNICATION The Company’s Board of Directors is updated at least quarterly on any compensation decisions or recommendations made by the Committee, and the Committee requests feedback from the Board of Directors regarding specific compensation issues as it deems necessary. COMPENSATION COMMITTEE INTERLOCKS & INSIDER PARTICIPATION During the fiscal year ended October 31, 2023, the members of the Committee were Mr. Marengi, Mr. Coutts, Ms. Hernandez-Kakol and Mr. Kangas, none of whom at any time has been an officer or employee of the Company or any of its subsidiaries and did not have any relationships requiring disclosure under Item 404(a) of Regulation S-K in this Proxy Statement. None of our executive officers served on the board of directors or compensation committee of any other entity that has or had one or more executive officers who served on our Board of Directors or our Compensation Committee during fiscal 2023. COMPENSATION COMMITTEE REPORT The Committee has reviewed and discussed the Compensation Discussion and Analysis provided below with the Company’s management. Based on this review and discussion, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2023. COMPENSATION COMMITTEE Joseph A. Marengi, Chair Robert B. Coutts Miriam Hernandez-Kakol Edward A. Kangas COMPENSATION DISCUSSION & ANALYSIS 1. EXECUTIVE SUMMARY In recent years, the Committee has determined to weight the Company’s variable compensation programs toward rigorous performance conditions with metrics such as pretax profit, liquidity, shareholder value preservation, debt reduction, alternative capital raises, EBIT Return on Investment, gross margin and new communities opened. As context for basing the Company’s compensation programs on these metrics, the Committee considered that, at the point at which housing starts were at the lowest levels during the great housing recession in 2009, the Company had written off over $2.5 billion of asset value and, as a result, was significantly overleveraged. During this period, many homebuilders declared bankruptcy and certain others significantly diluted shareholders via new equity issuances or by selling their companies at extremely low valuations. Hovnanian’s management chose to preserve shareholder value by managing the Company for growth and taking creative steps to refinance and pay down its heavy debt load. From the beginning of 2009 through fiscal 2023, the Company has reduced its public debt by about $1.6 billion, including a $502 million debt reduction since October 31, 2020. Despite this reduction, the Company remains overleveraged, with interest rates on debt instruments significantly above its lower leveraged peers. Accordingly, the Company continues to have a large interest expense burden which causes profitability to be more challenging to achieve and makes it difficult to compare the Company with its peers on profitability alone. During the COVID-19 pandemic surge in housing demand in fiscal 2021 and the first half of fiscal 2022, even with an extraordinarily high interest burden compared to its peers, the Company achieved income before income taxes of over $189 million and $319 million in fiscal 2021 and fiscal 2022, respectively, as a result of its growth in deliveries and margin improvement. This improvement allowed the Company, for the first time since the great housing recession, to return to a ROAE metric for bonus compensation during fiscal 2022. When measuring pure operating performance by the ratio of adjusted EBIT to investment, the Company has performed in the top half of its Peer Group for each of the four years ending with fiscal 2023. In addition, the Company continues to rank highest among its Peer Group in inventory turns. COMPANY PERFORMANCE IN FISCAL 2023 The demand for new and existing homes is dependent on a variety of demographic and economic factors, including job and wage growth, household formation, consumer confidence, mortgage financing, interest rates, inflation and overall housing affordability.

  27. Pay-for-Performance

    Pay-for-Performance The Compensation Committee ties increases or decreases in overall compensation to the achievement of key performance factors the Board of Directors believes are critical to the Company’s success during that period. The Committee seeks to motivate management to achieve improved financial performance of the Company through bonus plans that reward higher performance with increased bonuses and hold management accountable for financial performance that falls below targeted levels by paying reduced bonuses. In addition, the periodic long-term incentive programs adopted by the Company conditions payouts on the achievement of targets for increasing profitability and EBIT Return on Investment, which differs from EBIT Return on Inventory, a metric used in the Company’s 2022 PSU program, in that it accounts for the Company’s investment in unconsolidated joint ventures, which the Compensation Committee views as appropriate because that is how the Company invests in certain communities, and lowering or refinancing debt, reducing interest expense and achieving strategic initiatives over multi-year performance periods. Moreover, in recent years, the CEO and CFO have received PSUs, MSUs and options, and the CAO has received PSUs and options, which are tied to financial performance and/or stock price performance. The PSU awards are tied to financial performance conditions (for 2023, absolute EBIT levels and EBIT Return on Investment rank relative to the Peer Group), and half of the MSU awards have been subject to financial performance conditions in addition to the stock price performance conditions applicable to all of the MSU awards. The rigor of the performance conditions related to the long-term incentive programs is demonstrated by the fact that, on average for LTIP awards granted during fiscal years 2018 through 2022, we have set the three-year cumulative pre-tax profit targets for the LTIPs at 252% of what was achieved for the most recently-completed three-year periods at the time the LTIP awards were granted. Because the Summary Compensation Table uses accounting constructs to estimate values of long-term equity incentive awards at the time of grant, the Committee does not believe that it adequately measures CEO compensation for the purpose of assessing pay-for-performance alignment. These estimated values can differ significantly from the actual value that is ultimately earned from these awards. For this reason, the Committee also considers realizable pay, which captures the impact of the Company’s current share price performance on previously granted long-term incentive awards and helps the Committee assess the alignment of the Company’s compensation programs with the interests of its shareholders.

  28. Emphasis on Long-Term Value Creation and Retention

    Emphasis on Long-Term Value Creation and Retention The Committee seeks to align the interests of management with the long-term interests of the Company’s shareholders by granting a significant portion of their total compensation in the form of equity awards that increase or decrease in value as the Company’s financial performance and stock price improve or decline. The Committee also seeks to retain management by using compensation methods that require executives to be employed through various performance periods in order to receive financial benefits of certain equity grants.

  29. Maintaining an Appropriate Peer Group

    Maintaining an Appropriate Peer Group To retain and attract executive talent with industry-specific knowledge, in constructing the Peer Group, the Committee selects those companies that compete directly with the Company in the homebuilding industry, are of comparable complexity in operations to the Company and are generally in the markets in which the Company competes. The Committee believes that it is important to compare the Company to others in the homebuilding industry, even if certain of these peers have different financial profiles, because the Company competes with homebuilding industry peers for executive talent with industry-specific knowledge and experience. Further, the Company competes directly in all of its markets with most of the Peer Group companies for customers, land and trade partners. In some markets, the Company is larger than some of the Peer Group companies even though it may be smaller nationally. The Committee reviews the composition of the Peer Group on an annual basis and makes adjustments, if needed. In fiscal 2023, the Committee did not make any changes to the Peer Group. The Committee reviews the executive compensation of the Peer Group companies and seeks to award competitive target total direct compensation opportunities (the sum of base salary, annual bonus/ incentive awards and target long-term incentive awards) for our NEOs compared to the Peer Group.

  30. No Employment Agreements with CEO or Former CFO

    No Employment Agreements with CEO or Former CFO The Company does not maintain employment or other agreements for our Mr. Hovnanian or Mr. Sorsby that provide contractual rights upon termination of employment (other than upon death or disability) except for the vesting of long-term incentive and equity-based awards in the case of retirement or in connection with a qualifying termination in the case of a change in control. The Company does have a change in control severance agreement with Mr. O’Connor, as discussed in footnote (5) to the Potential Payments Upon Termination or Change-in-Control Table. No Tax Gross-Ups or Defined Benefit Pension Plans for Any NEO.

  31. Investor Engagement

    Investor Engagement During fiscal 2023, the Company conducted proactive investor outreach programs, including having its executives attend four investor conferences as well as other meetings with the investment community and meeting by teleconference or in person with more than 112 investors either one-on-one or in small groups. As a result, the Company’s executives met with institutional holders representing approximately 70% of shares held by our top ten shareholders that are actively managed funds. From time to time, Mr. Hovnanian and Mr. Sorsby, who are also members of the Board of Directors, and/or Mr. O’Connor participated in these investor outreach programs and reported their findings from the investor feedback to the Board of Directors. During such meetings, none of the investors with whom the Company engaged during fiscal 2023 raised concerns about the Company’s compensation practices, including the design and payouts under the Company’s annual bonus programs. In fact, in the numerous investor meetings we have held over the years, compensation has rarely if ever been raised by investors as an issue to be discussed. COMPENSATION DECISIONS FOR FISCAL 2023 The Committee’s compensation decisions for fiscal 2023 reflected a conservative approach to fixed pay elements (base salary), the achievement of pre-established goals (annual bonuses) and long-term awards.

  32. Regular Annual Bonuses

    Regular Annual Bonuses Consistent with the achievement of specified financial objectives, fiscal 2023 annual bonuses were paid to all NEOs. The Committee considered investor support for prior annual bonus programs, their design and payouts when determining pay opportunities and setting performance metrics for fiscal 2023. Additional details are described under “Details of Compensation Elements—Annual Bonuses—Regular Bonuses” below.

  33. Discretionary Bonuses

    Discretionary Bonuses The Committee did not award discretionary bonuses to any NEO for fiscal 2023.

  34. Long-Term Awards, including PSUs and participation in the Long-Term Incentive Program

    Long-Term Awards, including PSUs and participation in the Long-Term Incentive Program As further described under “Details of Compensation Elements – Stock Grants,” for fiscal 2023, the Committee granted PSUs to the NEOs. The PSUs are tied to the specific financial performance conditions described below under “Details of Compensation Elements – Stock Grants.” The Committee also granted Long-Term Incentive Program (“LTIP”) awards to the NEOs in fiscal 2023 as further described below under “Details of Compensation Elements – Long-Term Incentive Programs.” The LTIP awards are tied to the achievement of specified financial and strategic performance conditions over a three-year performance period and are fully vested at the end of the performance period. The PSUs granted in fiscal 2023 are subject to time-based vesting conditions that extend beyond the performance period. The PSUs and LTIP awards are further subject to a mandatory two-year post-vesting delayed delivery.

  35. Long-Term Awards, including PSUs and participation in the Long-Term Incentive Program

    | 2. COMPENSATION PHILOSOPHY & OBJECTIVES | |

  36. Long-Term Awards, including PSUs and participation in the Long-Term Incentive Program

    The Committee, in conjunction with the Board of Directors and with senior management, has been instrumental in shaping the Company’s compensation philosophy and objectives because of its responsibilities and oversight of the Company’s various policies and procedures concerning executive compensation. As context for setting the Company’s compensation programs, the Committee considered the Company’s strategic goals. As such, the Committee has weighted the Company’s variable compensation programs toward rigorous performance conditions with metrics such as pretax profit, liquidity, shareholder value preservation, debt reduction, alternative capital raises, EBIT Return on Investment, gross margin and new communities opened. As context for basing the Company’s compensation programs on these metrics, the Committee considered that, at the point at which housing starts were at the lowest levels during the great housing recession in 2009, the Company had written off over $2.5 billion of asset value and, as a result, was significantly overleveraged. During this period, many homebuilders declared bankruptcy and certain others significantly diluted shareholders via new equity issuances or by selling their companies at extremely low valuations. Hovnanian’s management chose to preserve shareholder value by managing the Company for growth and taking creative steps to refinance and pay down its heavy debt load. From the beginning of 2009 through fiscal 2023, the Company has reduced its public debt by about $1.6 billion, including a $502 million debt reduction since October 31, 2020. Despite this reduction, the Company remains overleveraged, with interest rates on debt instruments significantly above its lower leveraged peers. Accordingly, the Company continues to have a large interest expense burden which causes profitability to be more challenging to achieve and makes it difficult to compare the Company with its peers on profitability alone. During the COVID-19 pandemic surge in housing demand in fiscal 2021 and the first half of fiscal 2022, even with an extraordinarily high interest burden compared to its peers, the Company achieved income before income taxes of over $189 million and $319 million in fiscal 2021 and fiscal 2022, respectively, as a result of its growth in deliveries and margin improvement. This improvement allowed the Company, for the first time since the great housing recession, to return to a ROAE metric for bonus compensation during fiscal 2022. When measuring pure operating performance by the ratio of adjusted EBIT to investment, the Company has performed in the top half of its Peer Group for each of the four years ending with fiscal 2023. In addition, the Company continues to rank highest among its Peer Group in inventory turns. The six primary objectives that the Committee considers in making compensation decisions are discussed below, as are our other philosophies and mechanisms for determining compensation. In making compensation-related decisions, the Committee also considered its role in promoting good corporate governance practices. PRIMARY OBJECTIVES FOR THE COMPENSATION PROGRAM The Company’s primary objectives for compensating its executives are as follows: To offer compensation that guides, motivates, retains and rewards its executives for the achievement of the Company’s financial performance, strategic initiatives and individual goals (as applicable); To fairly compensate its executives in a manner that is appropriate with respect to their individual performance, level of responsibilities, abilities and skills; To align the executives’ interests with the interests of our shareholders; To maintain competitive pay opportunities for its executives so that it retains its talent pool and, at the same time, has the ability to attract new and highly-qualified individuals to join the organization as it grows or in the event of succession or replacement of an executive;

  37. Long-Term Incentive Programs (“LTIPs”) (described below) (payable in cash, stock and/or phantom shares); and

    Long-Term Incentive Programs (“LTIPs”) (described below) (payable in cash, stock and/or phantom shares); and Other employee benefits, including limited perquisites. COMPENSATION MIX

  38. Long-Term vs. Short-Term Compensation

    Long-Term vs. Short-Term Compensation An important portion of each NEO’s Total Direct Compensation is long-term compensation, which may include stock options, PSUs, MSUs, RSUs and/or LTIP awards. Short-term compensation consists of base salary and the cash portion of annual bonus amounts. Long-term compensation is intended to foster long-term commitment by the executive, employee-shareholder alignment and improved long-term shareholder value. In fiscal 2023, the Committee adopted a LTIP for the NEOs and other key senior executives of the Company, as discussed below. 4. DETAILS of COMPENSATION ELEMENTS BASE SALARIES Base salaries are intended to reward executives for their day-to-day contributions to the Company. The Committee believes that base salaries within the competitive range are necessary to retain the Company’s executive talent pool, and it set the fiscal 2023 base salaries of the NEOs at a level it believed to be necessary to retain such executive officers’ services. Base salaries of all the NEOs are reviewed annually by the Committee and are subject to adjustment based on factors that may include individual performance, change in responsibilities, average salary increases or decreases in the industry, compensation for similar positions in the Company’s Peer Group or broad-based compensation survey data if comparable data were unavailable from the Peer Group companies, as well as other factors, such as cost of living increases and internal pay relationships with other executives. For fiscal 2023, the Committee approved a 4.5% base salary increase, effective December 24, 2022, for Mr. O’Connor, which is in line with the Company’s ordinary course merit-based salary and cost of living increase practices. Upon Mr. Hovnanian and Mr. Sorsby’s recommendation, the Committee determined not to increase their respective base salaries for fiscal 2023. In addition, effective March 6, 2023, Messrs. Hovnanian, Sorsby and O’Connor voluntarily agreed to a 5% base salary decrease in light of staff reductions due to the slowdown in the housing market at that time. Based on discussions with FW Cook and Peer Group market data gathered by management, the Committee determined that, including these adjustments, the base salaries for the NEOs are within the competitive range necessary to retain the executive officers’ services. ANNUAL BONUSES

  39. Regular Bonuses

    Regular Bonuses The Company provides each of the NEOs with an opportunity to earn annual bonuses, which are intended to reward executives for the attainment of short-term financial objectives and for which the relevant metrics and formula are assessed annually. When it set bonus formulas in December 2022, the Committee considered the increase in inflation to 40-year high levels, the fact that mortgage rates had more than doubled since January 2022 and that housing demand in the second half of 2022 had significantly decreased. As a result, the Committee determined to emphasize the importance of maintaining appropriate levels of liquidity, including the use of alternative capital raises by incorporating these metrics into the NEO’s bonus programs for fiscal 2023. The Committee also determined to maintain the existing ROAE bonus components for each NEO, subject to tiered bonus caps based on 2023 Pre-tax Profit, which were substantially lower than the maximum potential bonuses under their fiscal 2022 bonus formulas. In particular, depending on the level of 2023 Pre-tax Profit achieved, the CEO’s 2023 bonus cap ranged from $2.8 million to $3.8 million, which represented a significant reduction from the CEO’s fiscal 2022 bonus cap of $12 million. The Committee has discretion to reduce or eliminate the amount of any bonus amounts payable to any participant based on performance or any other factors the Committee deems appropriate. Bonus opportunities are intended to be competitive with industry-wide practices in order to retain and attract executive talent. The following description provides detail as to the components used to determine each NEO’s fiscal 2023 annual bonus, namely (1) ROAE, (2) Pre-tax Profit, (3) Liquidity Balances and (4) Alternative Capital Raises, each as defined below. For additional context as to the Committee’s approach to setting the Company’s compensation programs, see also the above discussion under “Compensation Philosophy and Objectives.” Due to the large percentage of long-term compensation paid in the form of stock pursuant to PSUs and the LTIP programs, all bonuses for fiscal 2023 were paid 100% in cash. ROAE is defined as net income available to common shareholders divided by average equity (total equity at the beginning of the fiscal year and at the end of each fiscal quarter during the year divided by five). Net income used in calculating ROAE excludes the impact of any items deemed by the Committee to be unusual or nonrecurring items and excludes losses from land impairments and gains or losses from debt repurchases/debt retirement such as call premiums and related issuance costs. For fiscal 2023, the Committee set rigorous ROAE goals which required the achievement of a 20% ROAE in order for the NEOs to earn their respective maximum ROAE bonuses. For reference, the average return on equity for the S&P 500 over the last 25 years was 15.92%. “Pre-tax Profit” is defined as income (loss) before income tax expense and before income (loss) from unconsolidated joint ventures as reflected on the Company’s audited financial statements plus income (loss) before income tax expense for the Company’s unconsolidated joint ventures as reflected on their respective financial statements for the twelve months ended October 31, 2023, excluding the impact of any items deemed by the Committee to be unusual or nonrecurring items and excluding losses from land impairments and gains or losses from debt repurchases/debt retirement such as call premiums and related issuance costs. The Liquidity Balances component of the NEOs’ bonus formulas was based on the number of fiscal 2023 quarter-ends in which Liquidity Balances were at or above $200 million. “Liquidity Balances” are defined as homebuilding cash and cash equivalents plus restricted cash that collateralizes letters of credit plus the available borrowing capacity under the Company’s revolving credit facility. This element of the bonus calculation directly correlates with the Company’s strategic goal of enhancing our liquidity in order to grow the Company in light of our challenges accessing the capital markets. The Alternative Capital Raises component of the NEOs’ bonus formulas measured amounts raised by the Company or its unconsolidated joint ventures from alternative capital sources as determined by the Committee (including, but not limited to, financing by joint ventures, land banking transactions and non-recourse debt, but excluding SEC registered and 144A debt financing transactions) that were closed during fiscal 2023. This element of the bonus calculation directly correlates with the Company’s strategic goal of enhancing our liquidity through innovative sources of additional capital in order to grow the Company in light of our challenges accessing the capital markets. The bonus formulas for the NEOs are illustrated by the following tables. For the CFO and CAO, the bonuses are based on base salaries in effect prior to the voluntary 5% base salary decrease on March 6, 2023.

  40. Regular Bonuses

    | | CEO Bonus* | CFO Bonus* | CAO Bonus* | | ROAE | | | | | | Percentage of | Percentage of | Percentage of | | | Pre-tax Profit | Base Salary | Base Salary | | 0.00% | 0.00% | 0.00% | 0.00% | | 5.00% | 1.00% | 50.00% | 20.00% | | 10.00% | 1.25% | 100.00% | 40.00% | | 15.00% | 1.50% | 215.00% | 80.00% | | 20.00% | 2.00% | 330.00% | 120.00% |

  41. Plus

    | Number of Fiscal | CEO | CFO | CAO | | 2023 Quarter-Ends | Bonus* | Bonus* | Bonus* | | with Liquidity Balances | thousands | thousands | thousands | | at or Above $200 million | | | | | 1 | $0.0 | $0.0 | $0.0 | | 2 | $700.0 | $350.0 | $100.0 | | 3 | $1,050.0 | $525.0 | $150.0 | | 4 | $1,400.0 | $700.0 | $200.0 |

  42. Plus

    | Alternative Capital | | | | | Raises Closed During | CEO Bonus* | CFO Bonus* | CAO Bonus* | | Fiscal 2023 | | | | | millions | thousands | thousands | thousands | | $100.0 | $0.0 | $0.0 | $0.0 | | $125.0 | $700.0 | $350.0 | $100.0 | | $150.0 | $1,050.0 | $525.0 | $150.0 | | $200.0 | $1,400.0 | $700.0 | $200.0 |

  43. Plus

    | *The bonuses are interpolated on a linear basis between the points shown in the table and are subject to the caps described below. |

  44. Subject to the following Bonus Caps

    Subject to the following Bonus Caps

  45. Subject to the following Bonus Caps

    | | CEO | CFO | CAO | | Pre-tax Profit | Bonus Cap** | Bonus Cap** | Bonus Cap** | | millions | thousands | thousands | thousands | | Less than $40.0 | $2,800.0 | $1,400.0 | $400.0 | | $40.0 | $3,300.0 | $1,725.0 | $450.0 | | $80.0 or More | $3,800.0 | $2,050.0 | $500.0 |

  46. Subject to the following Bonus Caps

    | **The bonus caps are interpolated on a linear basis between the points shown in the table. |

  47. Subject to the following Bonus Caps

    For fiscal 2023, the Company achieved the maximum performance levels for ROAE, Liquidity Balances and Alternative Capital Raises. Specifically, fiscal 2023 ROAE, Pre-tax Profit and Alternative Capital Raises as defined under the bonus formulas for the NEOs were 42.9%, $370.2 million and $342.3 million, respectively, and Liquidity Balances were above $200 million for all four fiscal quarter-ends. As a result, Messrs. Hovnanian, Sorsby and O’Connor earned cash bonuses equal to $3,800,000, $2,050,000 and $500,000, respectively, which represented their maximum potential bonuses. The fiscal 2023 bonus payouts for Messrs. Hovnanian, Sorsby and O’Connor were 45%, 21.5% and 14% lower, respectively, than their fiscal 2022 bonus payouts.

  48. Discretionary Bonuses

    Discretionary Bonuses The Committee has the authority to make discretionary bonus awards, which it considers under special circumstances, including exceptional contributions not reflected in the regular bonus measures, new hire sign-on bonuses and retention rewards. No discretionary bonus awards were granted to the NEOs in fiscal 2023.

  49. STOCK GRANTS

    STOCK GRANTS The Committee may make grants of stock options, stock appreciation rights, MSUs, PSUs, restricted stock and RSUs, unrestricted shares of stock or stock-based awards settled in cash. In fiscal 2023, the Committee awarded PSUs to the NEOs. Equity awards are intended to establish a strong commitment to maintain employment with the Company and to focus on creating long-term shareholder value. Because the ultimate value received by equity award recipients is directly tied to the Company’s stock price, such awards serve to link the interests of management and shareholders and to motivate executive officers to make decisions that will increase the long-term total return to shareholders. Certain of the equity awards also include financial performance conditions, which are intended to incentivize recipients to direct the Company to achieve specified financial performance goals. Additionally, grants under the Existing Plan include vesting and termination provisions that the Committee believes will encourage equity award recipients to remain long-term employees of the Company. The Committee ultimately approves the size of the grants taking into account the recommendations of the CEO (other than for his own grant) and other criteria as determined by the Committee. The Committee considers the grant date value of awards as well as the number of shares to ensure that a significant portion of NEO compensation is tied to the Company’s stock price performance and shareholder value creation. The Committee will continue to determine the appropriate mix of equity and other award types based on the objectives of the compensation program, the Company’s business needs, the potential dilution impact and the pool of shares remaining available for grant under the Company’s shareholder-approved incentive plans.

  50. Fiscal 2023 Equity Awards

    Fiscal 2023 Equity Awards In determining the fiscal 2023 equity awards for the NEOs, the Committee considered, without giving specific weight to any one factor, then-available information on Peer Group equity awards for the NEOs, the anticipated changes in equity award values across industries, the Company’s available share pool and the potential impact on shareholder dilution, the Company’s stock performance, the historical equity awards provided to each NEO, the desire to retain the employment of each NEO and the desire to continue to link a substantial portion of each NEO’s compensation with future Company performance. As previously discussed, the Committee’s outside compensation consultant, FW Cook, also assisted the Committee with respect to its review of the Company’s compensation program for the CEO and other NEOs, including its equity awards. All equity awards granted to NEOs in fiscal 2023 were made in the form of rights to receive shares of Class A Common Stock, except for the CEO, who received his equity awards in the form of rights to receive shares of Class B Common Stock. In making such determination for the CEO, the Committee discussed the various reasons for making awards in Class B Common Stock and considered and evaluated the feedback gathered over time and reported to the Committee by senior human resources personnel about the diligence review thereof, which included discussions with the Company’s senior management and other associates and external parties, such as significant capital providers and joint venture partners and important suppliers and contractors with whom the Company continues to have significant business relationships. Such parties expressed that Hovnanian generational family ownership and control has high value in that it fosters strong engagement and it continues to be important to the Company’s business dealings and relationships and to attracting and retaining current and prospective employees. The Committee also reviewed an independent analysis and valuation of what premium or discount, if any, a Class B Common Stock share would have relative to a Class A Common Stock share, taking into account selected transactions and companies offering dual-class stock. Such analysis found, on average, no premium associated with high voting stock even when such stock retained its high vote status upon a sale, which is in contrast to Class B Common Stock which must be converted to Class A Common Stock upon a sale. After such discussion and review and analysis thereof, the Committee determined that the value to the CEO of receiving Class B Common Stock was equal to the value if he had received Class A Common Stock and that making the CEO’s equity awards in the form of rights to receive shares of Class B Common Stock best served the Company’s and its shareholders’ interests by promoting continuity of direction and management and stability in the Company’s business and employee relationships through Hovnanian generational family ownership and control, which has been and continues to be critical to the growth and success of the Company. There was a less than 3.8% change in the percentage of Hovnanian shareholder votes controlled by Ara Hovnanian caused by the later of vesting or delivery, in fiscal 2023, of Class B Hovnanian Common Stock awards. The Committee decided to award PSUs to the NEOs in fiscal 2023 because it believes PSUs provide a clear linkage to shareholder value creation and balance retention and performance objectives. Of the PSUs awarded to the NEOs in fiscal 2023, half of the PSUs were tied to absolute EBIT levels, and the other half of the PSUs were tied to EBIT Return on Investment rank relative to the Peer Group as further discussed below. The absolute EBIT metric was chosen because the Committee determined that it supports the Company’s strategic goal of improving profitability and interest coverage. The relative EBIT Return on Investment metric was chosen because the Committee determined that it measures pure operating performance compared to the Peer Group on an equal basis because it neutralizes each company’s leverage. EBIT Return on Investment differs from EBIT Return on Inventory, a metric used in the Company’s 2022 PSU program, in that it accounts for the Company’s investment in unconsolidated joint ventures, which the Committee views as appropriate because that is how the Company invests in certain communities. If the performance conditions are met, the earned PSUs vest on the third anniversary of the grant date. The earned PSUs are further subject to a mandatory two-year post-vesting delayed delivery such that the PSU awards will not be completely distributed until five years following the grant date, or June 9, 2028. Mr. Hovnanian: In fiscal 2023, Mr. Hovnanian received 31,202 target PSUs with a grant date fair value of $2,274,002 compared to 36,312 target PSUs in fiscal 2022 with a grant date fair value of $1,516,026. Mr. Sorsby: In fiscal 2023, Mr. Sorsby received 14,766 target PSUs with a grant date fair value of $1,076,146 compared to 17,184 target PSUs in fiscal 2022 with a grant date fair value of $717,432. Mr. O’Connor: In fiscal 2023, Mr. O’Connor received 2,882 target PSUs with a grant date fair value of $210,040 compared to 3,354 target PSUs in fiscal 2022 with a grant date fair value of $140,030. The number of PSUs tied to absolute EBIT levels which become earned PSUs shall equal the product of the target number of PSUs multiplied by the applicable Performance Multiplier set forth below. For this purpose, “EBIT” shall mean income (loss) before interest and income tax expense during the performance period as reflected on the Company’s audited financial statements for such performance period plus income (loss) before interest and income tax expense for the Company’s unconsolidated joint ventures as reflected on their respective financial statements for the twelve months ending April 30, 2024, excluding: (1) expense/income recorded during the performance period from any Phantom Share based awards related to changes in the stock price above or below the stock price at the date of grant; (2) the impact of any items deemed by the Committee to be unusual or nonrecurring items; and (3) losses from land impairments and gains or losses from debt repurchases/debt retirement such as call premiums and related issuance costs.

  51. Fiscal 2023 Equity Awards

    | EBIT for the | | | 4 Quarters Ending | Performance | | April 30, 2024 | Multiplier* | | More than 7.7% below target | 50% | | Target | 100% | | 15.4% above target | 200% |

  52. Fiscal 2023 Equity Awards

    The number of PSUs tied to EBIT Return on Investment rank relative to the Peer Group which become earned PSUs shall equal the product of the target number of PSUs multiplied by the applicable Performance Multiplier. The Performance Multiplier ranges from 50% to 200% depending on EBIT Return on Investment rank with the maximum multiplier requiring a rank in the top three. “EBIT Return on Investment” shall mean the quotient resulting from dividing EBIT by Average Investment. “EBIT” shall mean income (loss) before interest and income tax expense during the performance period as reflected on each company’s audited financial statements for such performance period, excluding losses from land impairments and gains or losses from debt repurchases/debt retirement such as call premiums and related issuance costs and, for Hovnanian Enterprises, Inc., excluding: (1) expense/income recorded during the performance period from any Phantom Share based awards related to changes in the stock price above or below the stock price at the date of grant and (2) the impact of any items deemed by the Committee to be unusual or nonrecurring items. “Average Investment” shall mean the average of the sum of the ending inventory, investment in unconsolidated joint ventures, investment in build for rent assets, definite life intangibles and goodwill balances from each company’s audited balance sheet, excluding capitalized interest and the impact of consolidated inventory not owned, for each of the five most recently completed consecutive fiscal quarters as of April 30, 2024.

  53. Achievement under the 2022 PSUs

    Achievement under the 2022 PSUs In fiscal 2022, the Committee granted PSUs to the NEOs because it believes PSUs provide a clear linkage to shareholder value creation and balance retention and performance objectives. Half of the fiscal 2022 PSUs were tied to absolute EBIT levels, while the other half of the PSUs were tied to EBIT Return on Inventory rank relative to the Peer Group, each as further discussed below. The absolute EBIT metric was chosen because the Committee determined that it supports the Company’s strategic goal of improving profitability and interest coverage. The relative EBIT Return on Inventory metric was chosen because the Committee determined that it measures pure operating performance compared to the Peer Group on a leverage neutral basis. Earned PSUs vest on the third anniversary of the grant date and are further subject to a mandatory two-year post-vesting delayed delivery such that the PSU awards will not be completely distributed until five years following the grant date, or June 10, 2027.

  54. Achievement under the 2022 PSUs

    | | Target 2022 PSUs | Target 2022 PSUs | | | Tied to Absolute | Tied to Relative | | | EBIT Levels | EBIT ROI Rank | | Mr. Hovnanian | 18,156 | 18,156 | | Mr. Sorsby | 8,592 | 8,592 | | Mr. O’Connor | 1,677 | 1,677 |

  55. Achievement under the 2022 PSUs

    The number of PSUs tied to absolute EBIT levels which become earned PSUs shall equal the product of the target number of PSUs multiplied by the applicable Performance Multiplier set forth below. For a definition of “EBIT” used in relation to our 2022 PSUs please see our proxy statement relating to our 2023 annual shareholder meeting filed with the SEC on February 10, 2023.

  56. Achievement under the 2022 PSUs

    | EBIT for the 4 Quarters Ending | Performance | | April 30, 2023 | Multiplier* | | $300 million or less (Threshold) | 50% | | $350 million (Target) | 100% | | $450 million or more (Maximum) | 200% |

  57. Achievement under the 2022 PSUs

    The Company’s EBIT for the four quarters ending April 30, 2023 was $426.3 million, resulting in a payout of 176.3% of the target award. The earned PSUs vest on the third anniversary of the grant date and are further subject to a mandatory two-year post-vesting delayed delivery such that the PSU awards will not be completely distributed until five years following the grant date, or June 10, 2027. The number of PSUs tied to EBIT Return on Inventory rank relative to the Peer Group which become earned PSUs shall equal the product of the target number of PSUs multiplied by the applicable Performance Multiplier as set forth below. For a definition of “EBIT Return on Inventory” used in relation to our 2022 PSUs please see our proxy statement relating to our 2023 annual shareholder meeting filed with the SEC on February 10, 2023.

  58. Achievement under the 2022 PSUs

    | Relative EBIT ROI Rank Compared to Peers | | | for Each Company’s 4 Most Recently Completed | Performance | | Fiscal Quarters as of April 30, 2023 | Multiplier* | | Bottom Three (Threshold) | 50% | | Rank 6 (Target) | 100% | | Top Three (Maximum) | 200% |

  59. Achievement under the 2022 PSUs

    Our relative EBIT Return on Inventory rank compared to our Peers for each company’s four most recently completed fiscal quarters as of April 30, 2023 was the highest, resulting in a payout of 200% of the target award. The earned PSUs vest on the third anniversary of the grant date and are further subject to a mandatory two-year post-vesting delayed delivery such that the PSU awards will not be completely distributed until five years following the grant date, or June 10, 2027.

  60. LONG-TERM INCENTIVE PROGRAMS

    LONG-TERM INCENTIVE PROGRAMS

  61. 2023 Long-Term Incentive Program

    2023 Long-Term Incentive Program In fiscal 2023, the Company adopted a Long-Term Incentive Program (the “2023 LTIP”) under the Existing Plan to further aid the Company in retaining key employees and to motivate them to exert their best efforts on behalf of the Company. Specifically, the 2023 LTIP is entirely performance-based and is intended to incentivize achievement of specified relative EBIT Return on Investment goals as of October 31, 2025, specified levels of new community openings (including domestic joint ventures) in fiscal year 2025 with National Portfolio Plans that include Looks, which are plans that are used across our markets and include curated packages for customers to select, rather than a large number of a la carte options, and specified levels of public debt refinanced or reduced by October 31, 2025. The Committee chose these metrics to align and incentivize the NEOs to focus on attaining operating efficiencies, improving our bottom line and achieving our strategic goals. In particular, refinancing or reducing public debt as a financial measure incentivizes management to work towards improvement of our balance sheet. Each of the NEOs is a participant in the 2023 LTIP. Award payouts, if any, will be determined based on actual performance for the full 36-month performance period and will be subject to holding requirements, as described below. This performance period commenced on November 1, 2022 (the beginning of fiscal 2023) and will end on October 31, 2025 (that is, the performance period covers fiscal 2023, 2024 and 2025). After the performance period, the LTIP share portion of the awards remain subject to a mandatory two-year post-vesting delayed delivery such that the awards will not be completely distributed until five years after the beginning of the performance period, or October 31, 2027. The LTIP phantom share portion of the awards will be distributed following the end of the performance period. Like MSU, PSU and other LTIP awards, in accordance with the Committee’s intentions, the payout under the 2023 LTIP will be determined based on the Company’s performance. Award payouts, if any, will be based on a specific target multiple of each participant’s base salary in effect on January 1, 2023. The following describes the target multiple of base salary and form of payout for each NEO:

  62. 2023 Long-Term Incentive Program

    | | Target Multiple | | | | of Base Salary | Payout Method | | Mr. Hovnanian | 1.35 | 50% shares/50% phantom shares | | Mr. Sorsby | 1.00 | 50% shares/50% phantom shares | | Mr. O’Connor | 0.75 | 50% shares/50% phantom shares |

  63. 2023 Long-Term Incentive Program

    The Awards are reflected in the Summary Compensation Table as “Stock Awards” in fiscal 2023 even though the LTIP share portion remains subject to mandatory delayed delivery restrictions through fiscal 2027, as discussed above. Any cash-settled phantom shares that vest will be distributed at the end of the performance period, while the remaining PSU awards that vest, if any, are further subject to a mandatory two-year post-vesting delayed delivery such that the awards will not be completely distributed until October 31, 2027. Potential award payouts range from 0% to 250% of the target award depending on performance against three metrics: (1) EBIT Return on Investment relative to the Peer Group for the four most recently completed fiscal quarters as of October 31, 2025, (2) the percent of new community openings, including domestic joint ventures, in fiscal 2025 that include National Portfolio plans with Looks, which are plans that are used across our markets and include curated packages for customers to select, rather than a large number of a la carte options, and (3) the refinancing or reduction of a specified level of the Company’s public bonds by October 31, 2025. For purposes of the LTIP, “EBIT Return on Investment” shall mean the quotient resulting from dividing EBIT by Average Investment. For purposes of the LTIP, “EBIT” shall mean income (loss) before interest and income tax expense during the performance period as reflected on each company’s audited financial statements for such performance period, excluding losses from land impairments and gains or losses from debt repurchases/debt retirement such as call premiums and related issuance costs and, for Hovnanian Enterprises, Inc., excluding: (1) expense/income recorded during the Performance Period from any Phantom Share based awards related to changes in the stock price above or below the stock price at the date of grant and (2) the impact of any items deemed by the Committee to be unusual or nonrecurring items. “Average Investment” shall mean the average for each of the 5 most recently completed consecutive fiscal quarters as of October 31, 2025 of the sum of the ending inventory, definite life intangibles and goodwill balances from each company’s audited balance sheet, excluding capitalized interest and the impact of consolidated inventory not owned.

  64. Achievement under the 2021 Long-Term Incentive Program

    Achievement under the 2021 Long-Term Incentive Program In fiscal 2021, the Company adopted a Long-Term Incentive Program (the “2021 LTIP”) to further aid the Company in retaining key employees and to motivate them to exert their best efforts on behalf of the Company. Specifically, the 2021 LTIP was entirely performance-based and was intended to incentivize achievement of specified pre-tax profit goals as a measure of operational improvement and specified improvements in the Company’s annualized interest incurred based on outstanding homebuilding debt (“Annualized Interest Incurred”). The Committee chose these metrics to align and incentivize the NEOs to focus on gaining operating efficiencies and improving our bottom line. In particular, using annualized interest expense as a financial measure incentivizes management to work towards improvement of our balance sheet. Each of the NEOs was a participant in the 2021 LTIP, and their award payouts were determined based on actual performance for the full 36-month performance period, subject to certain vesting requirements over an additional 24-month period, as described below. This performance period commenced on November 1, 2020 (the beginning of fiscal 2021) and ended on October 31, 2023 (that is, the performance period covered fiscal 2021, 2022 and 2023). After the performance period, the awards, as discussed further below, remain subject to vesting conditions during fiscal 2024 and 2025. Like MSU, PSU and other LTIP awards, in accordance with the Committee’s intentions, the payout under the 2021 LTIP was determined based on the Company’s performance. Award payouts were based on a specific target multiple of the NEO’s base salary in effect on January 1, 2021. The following describes the target multiple of base salary and form of payout for each NEO:

  65. Achievement under the 2021 Long-Term Incentive Program

    | | Target Multiple | | | | of Base Salary | Payout Method | | Mr. Hovnanian | 1.35 | 100% shares | | Mr. Sorsby | 1.00 | 100% shares | | Mr. O’Connor | 0.75 | 100% shares |

  66. Achievement under the 2021 Long-Term Incentive Program

    The Awards were reflected in the Summary Compensation Table as “Stock Awards” in fiscal 2021 even though they remain subject to vesting restrictions during 2023, 2024 and 2025 and mandatory holding restrictions through fiscal 2025, 2026 and 2027, as discussed below. For purposes of the 2021 LTIP, “Pre-tax Profit” is defined as income (loss) before income tax expense and before income (loss) from unconsolidated joint ventures as reflected on the Company’s audited financial statements plus income (loss) before income tax expense for the Company’s unconsolidated joint ventures as reflected on their respective financial statements for the thirty-six month period ending October 31, 2023, excluding the impact of any items deemed by the Committee to be unusual or nonrecurring items and excluding losses from land impairments and gains or losses from debt repurchases/debt retirement such as call premiums and related issuance costs. “Annualized Interest Incurred” is defined as the annualized interest due on the outstanding Homebuilding Debt as of October 31, 2023. “Homebuilding Debt” is defined as total (recourse) notes payable, including the outstanding balances at October 31, 2023 on any revolving credit agreements, and non-recourse property-specific debt, excluding accrued interest, as reflected on our consolidated audited balance sheet, less any debt that has an equity component such as debt convertible into equity, tangible equity units and/or exchangeable notes (not net debt). The following table illustrates the percentage of the target award that would have been achieved at each performance level. Awards are interpolated on a linear basis between performance levels but will not be extrapolated above the maximum performance levels listed below:

  67. Achievement under the 2021 Long-Term Incentive Program

    | Cumulative | | | | | | | | | Pre-tax | | | | | | | | | Profit for | | | | | | | | | Fiscal 2021 | | | | | | | | | Through | Annualized Interest Incurred Based on Outstanding | | | | | | | | Fiscal 2023 | Homebuilding Debt at October 31, 2023 | | | | | | | | millions | $165.0 or more | $158.3 | $151.7 | $145.0 | $138.3 | $131.7 | $125.0 or less | | $475.0 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 | | $350.0 | 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 | | $225.0 | 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 | | $100.0 | 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 $100.0 | 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 |

  68. Achievement under the 2021 Long-Term Incentive Program

    For the period from fiscal 2021 through fiscal 2023, the Company achieved $918.5 million in cumulative Pre-tax Profit, and Annualized Interest Incurred was $114.5 million, resulting in a payout of 250% of the target award. As an additional condition of earning each portion of the award and as a retention inducement, following the performance period, a participant must also be employed through the vesting dates outlined below (other than in cases of death, disability, qualified retirement or specified termination following a change in control of the Company). Mr. Sorsby’s departure from the Company as of October 31, 2023 was deemed a qualified retirement such that he will receive these awards. 60% of the award vested on October 31, 2023 and will be payable on October 31, 2025;

  69. Golf membership or country club fee reimbursement for personal use (limited to Messrs. Hovnanian and Sorsby); and

    Golf membership or country club fee reimbursement for personal use (limited to Messrs. Hovnanian and Sorsby); and Personal income tax preparation services (limited to the CEO). There are no tax gross-ups on any of the executive perquisites. The Committee annually reviews the elements and level of executive perquisites for the NEOs. In particular, in evaluating the appropriateness of these benefits for the CEO, the Committee takes into consideration the CEO’s security, health and safety and the degree to which he is required to travel to various Company locations and business functions on a daily basis. Based on its review, the Committee has requested that the CEO use Company-provided transportation to enhance his security and the efficient use of his time. The Company makes a matching contribution to all participants, including the NEOs, in the Company’s 401(k) plans of up to 6% of eligible employee compensation, based on tenure. The Company also makes contributions to the executive deferred compensation plan (“EDCP”) for the NEOs and certain other members of senior leadership of the Company to provide up to 6% of earnings above the annual 401(k) limit for the calendar year, based on tenure. Calendar year contributions are credited in the subsequent fiscal year and reflected in the proxy statement for that year. Contributions credited in fiscal 2022 with respect to calendar year 2021 earnings were higher than anticipated due to a higher than expected increase in the Company’s stock value. Although, in light of this development, Mr. Hovnanian requested that his contribution based on calendar year 2021 earnings be reduced, such reduction was not possible because the contribution had already been credited to his EDCP account. Upon Mr. Hovnanian’s recommendation, the Committee determined to cap his contribution to be credited in fiscal 2023 based on calendar year 2022 earnings at $450,000. To limit contributions going forward, Mr. Hovnanian further recommended, and the Committee approved, changing the contribution formula for all participants to exclude equity and other long-term compensation beginning with contributions to be credited in fiscal 2024 based on calendar year 2023 earnings. Specific benefits and the incremental costs of such benefits are described in detail in the footnotes to the Summary Compensation Table. The Company does not offer any defined benefit pension plans to its employees. 5. ACTIONS for FISCAL 2024 The Committee approved a base salary increase to $600,000, effective November 1, 2023, for Mr. O’Connor, in light of his promotion to Chief Financial Officer. Given the Company’s improved financial performance, effective December 23, 2023, the Committee restored Mr. Hovnanian’s salary to $1,150,000, which was his base salary prior to the voluntary decrease on March 6, 2023. The Committee increased the alternative capital raises goals in the NEOs’ fiscal 2024 bonus plans to further enhance our liquidity in order to grow the Company. In light of his promotion, the Committee increased Mr. O’Connor’s fiscal 2024 bonus potential to align with his new position. Given the Company’s improved financial performance, the Committee raised the fiscal 2024 bonus cap for Mr. Hovnanian to $7 million, which is higher than his 2023 bonus cap but lower than his 2022 bonus cap. The Committee also adopted a new Long-Term Incentive Program (the “2024 LTIP”). Each of the NEOs will be a participant in the 2024 LTIP, and their award payouts will be determined based on the Company’s achievement of specified levels of (1) EBIT Return on Investment relative to the Peer Group for the four most recently completed fiscal quarters as of October 31, 2026 and (2) Net Debt to Capital at October 31, 2026. At the end of the performance period, 50% of the awards, if any, which would be payable in cash-settled phantom shares will be distributed and the remaining 50% of the awards, if any, which would be payable in shares of Company stock, are further subject to a mandatory two-year post-vesting delayed delivery such that the awards will not be completely distributed until October 31, 2028. The performance period for the 2024 LTIP commenced on November 1, 2023 and will end on October 31, 2026. 6. TAX DEDUCTIBILITY & ACCOUNTING IMPLICATIONS As a general matter, the Committee takes into account the various tax and accounting implications of compensation. When determining amounts of equity grants to executives and employees, the Committee also examines the accounting cost associated with the grants. 7. TIMING & PRICING OF EQUITY AWARDS With the exception of grants related to new hires and promotions, PSUs, RSUs, MSUs and options are granted on the second Friday in June for all eligible employees. The Company’s practice of setting “fixed” equity award grant dates is designed to avoid the possibility that the Company could grant stock awards prior to the release of material, non-public information that is likely to result in an increase in its stock price or delay the grant of stock awards until after the release of material, non-public information that is likely to result in a decrease in the Company’s stock price. Exercise prices of stock options, when granted, are generally set at, and cannot be lower than, the closing price per share of the Company’s Class A Common Stock on the NYSE on the day of grant. 8. STOCK OWNERSHIP GUIDELINES & DELAYED DELIVERY PERIODS STOCK OWNERSHIP GUIDELINES The Board of Directors has adopted stock ownership guidelines, which set forth recommended minimum amounts of stock ownership, directly or beneficially, for the CEO, CFO, COO (if any) and non-employee Directors. The Corporate Governance and Nominating Committee reviews adherence to the Company’s stock ownership guidelines on an annual basis, which guidelines are incorporated into the Company’s Governance Guidelines. The Company believes these guidelines further enhance the Company’s commitment to aligning the interests of our non-employee Directors and senior management with those of our shareholders. Under the terms of the ownership guidelines, once the stock ownership guidelines are met, they are deemed satisfied for subsequent annual review periods, regardless of decreases in the Company’s stock price on the NYSE. SENIOR EXECUTIVE OFFICERS The guidelines provide that the following senior executive officers of the Company are requested to achieve and maintain minimum stock ownership amounts as follows within five years after they become subject to the guidelines:

  70. COO (if any): 3 times current base salary

    COO (if any): 3 times current base salary As of October 31, 2023, Messrs. Hovnanian and Sorsby were in compliance with the guidelines. See “Non-Employee Director Compensation” for information on the stock ownership guidelines for non-employee Directors. MANDATORY DELAYED DELIVERY PERIOD The Compensation Committee of the Board of Directors of the Company has adopted a policy whereby equity awards granted to the company’s executive officers are subject to a mandatory two-year post-vesting delayed delivery period such that, even after vesting conditions for the applicable award are satisfied and the award is fully vested, delivery of the underlying shares is delayed until the second anniversary of the vesting date, other than equity awards that vest in connection with a qualified termination of employment occurring within two years following a change of control, as governed by the terms of the applicable award agreement. ANTI-HEDGING AND PLEDGING POLICIES We have a securities trading policy that sets forth guidelines and restrictions applicable to employees’ and directors’ transactions involving our stock. Among other things, this policy prohibits our employees and directors from engaging in short-term or speculative transactions involving our stock, including purchasing our stock on margin, short sales of our stock (that is, selling stock that is not owned and borrowing shares to make delivery), buying or selling puts, calls or other derivatives related to our stock and arbitrage trading or day trading of our stock. In addition, our employees and directors are not allowed to pledge Company stock without the consent of the Company. EXECUTIVE COMPENSATION 1. SUMMARY COMPENSATION TABLE The following table summarizes the compensation for the fiscal years ended October 31, 2023, October 31, 2022 and October 31, 2021 of the CEO, CFO and CAO. These three individuals compose our named executive officers (“NEOs”).

  71. COO (if any): 3 times current base salary

    | | | | | | | Non-Equity | Change in Pension Value and Nonqualified | | | | Name and Principal Position | Year | Salary | Bonus | Stock Awards | Option Awards | Incentive Plan Compen- sation | Deferred Compen- sation Earnings | All Other Compen-sation | Total | | | | ($) (1) | ($) | ($) (2) | ($) (3) | ($) (4) | ($) (5) | ($) (6) | ($) (7) | | Ara K. Hovnanian President, Chief Executive Officer and Chairman of the Board | 2023 | 1,116,385 | | 3,826,502 | | 3,800,000 | 71,083 | 668,428 | 9,482,398 | | | 2022 | 1,154,423 | — | 3,068,492 | — | 11,316,803 | 78,883 | 890,896 | 16,509,497 | | | 2021 | 1,257,273 | — | 3,330,082 | — | 7,437,438 | 64,861 | 388,528 | 12,478,182 | | J. Larry Sorsby Executive Vice President, Chief Financial Officer | 2023 | 923,841 | | 1,867,863 | | 2,050,000 | 94,902 | 675,815 | 5,612,421 | | | 2022 | 790,607 | — | 1,509,133 | — | 4,469,122 | 94,489 | 493,915 | 7,357,266 | | | 2021 | 762,338 | — | 1,482,319 | — | 3,501,250 | 70,497 | 177,486 | 5,993,890 | | Brad G. O’Connor Senior Vice President, Chief Accounting Officer and Treasurer | 2023 | 488,037 | | 589,626 | | 500,000 | 22,791 | 185,029 | 1,785,483 | | | 2022 | 483,650 | — | 503,235 | — | 1,430,918 | 21,473 | 106,243 | 2,545,519 | | | 2021 | 466,230 | — | 490,905 | — | 752,500 | 17,619 | 62,004 | 1,789,258 |

  72. Narrative to the Nonqualified Deferred Compensation for Fiscal 2023 Table

    Narrative to the Nonqualified Deferred Compensation for Fiscal 2023 Table The EDCP’s total account balance is equal to the “Company Contribution Account” balance. The “Company Contribution Account” balance consists of the annual Company “make-whole” contribution amounts under the plan. During calendar years 2022 and 2023, amounts in the “Company Contribution Account” balances were credited with earnings based on the weighted average yield on the Company’s then outstanding senior secured and unsecured notes as of the preceding December 1st, or 9.4% for calendar year 2022 and 9.5% for calendar year 2023. Following a termination of employment, a participant’s account balance in the EDCP will be paid in a lump sum or in annual installments of between two to 15 years, as further set forth in the EDCP and pursuant to the terms of the participant’s elections. 6 . POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL The following table summarizes payments and benefits that would be payable to each of the NEOs in the event of his termination of employment or upon the occurrence of a change-in-control (each a “triggering event”). For purposes of this table, the effective date of the triggering event is assumed to be October 31, 2023, the last day of fiscal 2023. The table does not include any payments that are described in the “Nonqualified Deferred Compensation for Fiscal 2023” table above.

  73. Narrative to the Nonqualified Deferred Compensation for Fiscal 2023 Table

    | | Voluntary Termination | | Involuntary Termination | | Change in Control | | | Named Executive Officer | With or Without Good Reason | | | | | With Involuntary Termination Other Than for Cause or Termination with Good Reason | | | | Qualified Retirement | With or Without Cause | Death or Disability | Without Termination | | | Form of Compensation | ($) | ($) | ($) | ($) | ($) | ($) | | Ara K. Hovnanian | | | | | | | | Accelerated vesting of annual bonus awards (1) | — | — | — | — | — | — | | Accelerated vesting of equity awards (2) | — | 447,525 | — | 447,525 | — | 5,116,720 | | Accelerated vesting of LTIP awards (3) | — | — | — | — | — | 3,930,275 | | Contractual disability/death payment (4) | — | — | — | 10,000,000 | — | — | | Cash severance payment | — | — | — | — | — | — | | Accrued and unpaid vacation (6) | — | — | — | — | — | — | | TOTAL | — | 447,525 | — | 10,447,525 | — | 9,046,995 |

  74. Narrative to the Nonqualified Deferred Compensation for Fiscal 2023 Table

    | | Voluntary Termination | | Involuntary Termination | | Change in Control | | | Named Executive Officer | With or Without Good Reason | | | | | With Involuntary Termination Other Than for Cause or Termination with Good Reason | | | | Qualified Retirement | With or Without Cause | Death or Disability | Without Termination | | | Form of Compensation | ($) | ($) | ($) | ($) | ($) | ($) | | J. Larry Sorsby | | | | | | | | Accelerated vesting of annual bonus awards (1) | — | — | — | — | — | — | | Accelerated vesting of equity awards (2) | — | 447,525 | — | 447,525 | — | 2,182,163 | | Accelerated vesting of LTIP awards (3) | — | — | — | — | — | 882,604 | | Contractual disability/death payment | — | — | — | — | — | — | | Cash severance payment | — | — | — | — | — | — | | Accrued and unpaid vacation (6) | | | | | | | | TOTAL | — | 447,525 | — | 447,525 | — | 3,064,767 | | Brad G. O’Connor | | | | | | | | Accelerated vesting of annual bonus awards (1) | — | — | — | — | — | — | | Accelerated vesting of equity awards (2) (5) | — | — | — | 987,457 | — | 1,187,698 | | Accelerated vesting of LTIP awards (3) (5) | — | — | — | 487,126 | — | 1,434,764 | | Contractual disability/death payment | — | — | — | — | — | — | | Cash severance payment (5) | — | — | — | — | — | 967,018 | | Accrued and unpaid vacation (6) | 34,136 | 34,136 | 34,136 | 34,136 | — | 34,136 | | TOTAL | 34,136 | 34,136 | 34,136 | 1,508,719 | — | 3,623,616 |

  75. Narrative to the Nonqualified Deferred Compensation for Fiscal 2023 Table

    For purposes of this table presentation, consideration of the forms of compensation or additional payments or benefits to an NEO in the event of a triggering event includes: Accelerated vesting of annual bonus awards. According to the Company’s bonus program’s policies and procedures, the fiscal 2023 regular bonus award is considered earned only if an NEO is on the payroll and employed by the Company on the date that it is scheduled to be paid. However, if an NEO’s termination were due to retirement on or after age 58, a reduction in force, position elimination, death or disability, the NEO would be eligible for a prorated payment through his termination date, less any amounts previously paid. Because Messrs. Hovnanian and Sorsby have reached age 58, any voluntary termination of their employment would be considered a qualified retirement. Any such prorated payments would be paid on the date the bonuses are regularly scheduled to be paid. All bonus amounts payable with respect to fiscal 2023 are reflected in the Summary Compensation Table and are not also included in the table above. (2) Accelerated vesting of equity awards. The values in this table are calculated at the closing trading price of the Company’s Class A Common Stock on October 31, 2023 ($69.48). Stock Options and RSUs: Under circumstances other than 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, upon termination, any unvested stock options and RSUs are canceled in accordance with their respective agreements. In the event of 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, any unvested RSUs vest and are settled within 60 days, subject to delay if required under Section 409A of the Internal Revenue Code. In the event of 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, unvested stock options immediately become fully vested and exercisable. In the case of death prior to the vesting date, these stock options immediately become fully vested and exercisable. The “Death or Disability” column reflects the values for RSUs and stock options that have in-service time-based vesting dates after October 31, 2023, if any. The “Qualifying Retirement” and “Change in Control – With Involuntary Termination Other Than for Cause or Termination with Good Reason” column reflects the values for RSUs and stock options that have in-service time-based vesting dates after October 31, 2023, if any. Messrs. Hovnanian and Sorsby were retirement-eligible under their stock option agreements as of October 31, 2023. MSUs: Under circumstances other than death, disability, qualified retirement or in connection with a qualifying termination in the case of a change in control, any unvested MSUs are canceled upon termination. MSUs accelerate in connection with a qualifying termination in the case of a change in control but not in the event of death, disability or qualified retirement. In the case of death, disability or qualified retirement, the MSUs remain outstanding and the participant is eligible to receive the earned shares in accordance with the regular vesting schedule. The number of shares underlying the MSU awards granted during fiscal 2019 for Messrs. Hovnanian and Sorsby are calculated based on the average closing trading price of the Company’s Class A Common Stock on the NYSE over the 30 calendar day period ending on October 31, 2023 ($78.14) but valued based on the closing trading price of the Company’s Class A Common Stock on October 31, 2023. PSUs: Under circumstances other than death, disability, qualified retirement or in connection with a qualifying termination in the case of a change in control, any unvested PSUs are canceled upon termination. PSUs accelerate in connection with a qualifying termination in the case of a change in control. In the event of death, disability or qualified retirement before the end of the performance period, PSUs remain outstanding until actual performance is determined following the end of the performance period and then any earned PSUs shall become vested and deliverable within 60 days after the delivery date. In the event of death, disability or qualified retirement after the end of the performance period, any previously unvested earned PSUs shall become vested and deliverable within 60 days after the delivery date. The delivery date is the date that is the earlier of (1) the second anniversary of the vesting date or (2) the second anniversary of the date of the participant’s qualified termination. Because the effective date of the triggering event is assumed to be October 31, 2023 which is before the end of the PSU performance period for the 2023 PSUs, no 2023 PSU values are included under the “Death or Disability” and “Qualifying Retirement” columns and the 2023 PSU values in the “Change in Control – With Involuntary Termination Other Than for Cause or Termination with Good Reason” column are based on target performance. Accelerated vesting of LTIP awards. 2023 LTIP: Except in the case of death, disability, a qualified retirement or a qualifying termination in the case of a change in control, 2023 LTIP participants who terminate prior to the end of the performance period (October 31, 2025) forfeit all of their 2023 LTIP awards. In the case of death, disability or a qualified retirement following a period of employment covering at least one-third of the performance period, the participant is eligible to receive a prorated portion of their phantom share award and share award payable in October 2025 and October 2027, respectively. In the event the participant is involuntarily terminated without cause or the participant terminates employment for good reason, in either case, within two years following a change in control, the remaining portion of the participant’s earned award shall become fully vested and immediately payable. Because the effective date of the triggering event is assumed to be October 31, 2023 which is before the end of the performance period, the values in the “Change in Control – With Involuntary Termination Other Than for Cause or Termination with Good Reason” column are based on target performance. 2022 LTIP: Except in the case of death, disability, a qualified retirement or a qualifying termination in the case of a change in control, 2022 LTIP participants who terminate prior to the end of the performance period (October 31, 2024) forfeit all of their 2022 LTIP awards. In the case of death prior to the end of the performance period, the participant is eligible to receive a prorated award payable in October 2026. In the case of disability or a qualified retirement following a period of employment covering at least one-third of the performance period, the participant is eligible to receive a prorated award payable in October 2026. In the event the participant is involuntarily terminated without cause or the participant terminates employment for good reason, in either case, within two years following a change in control, the remaining portion of the participant’s earned award shall become fully vested and immediately payable. Because the effective date of the triggering event is assumed to be October 31, 2023 which is before the end of the performance period, the values in the “Change in Control – With Involuntary Termination Other Than for Cause or Termination with Good Reason” column are based on target performance.

  76. Narrative to the Nonqualified Deferred Compensation for Fiscal 2023 Table

    2021 LTIP: In the case of death following the end of the performance period, 2021 LTIP participants are entitled to receive the unpaid portion of the award within 75 days. In the case of disability or a qualified retirement, the participant is eligible to receive the unpaid award in accordance with the regular payout schedule. As of October 31, 2023, Messrs. Hovnanian and Sorsby were “retirement eligible” under their 2021 LTIP agreements, and their outstanding 2021 LTIP awards are considered vested. In the event the participant is involuntarily terminated without cause or the participant terminates employment for good reason, in either case, within two years following a change in control, the remaining portion of the participant’s earned award shall become fully vested and immediately payable. The values in the “Death and Disability” and “Change In Control With Involuntary Termination Other Than for Cause or Termination with Good Reason” columns include the unvested portion of Mr. O’Connor’s 2021 LTIP award based on the closing trading price of the Company’s Class A Common Stock on the NYSE on October 31, 2023 ($69.48). 2020 LTIP: In the case of death following the end of the performance period, 2020 LTIP participants are entitled to receive the unpaid portion of the award within 75 days. In the case of disability or qualified retirement, the participant is eligible to receive the unpaid award in accordance with the regular payout schedule. As of October 31, 2023, Messrs. Hovnanian and Sorsby were “retirement eligible” under their 2020 LTIP agreements, and their outstanding 2020 LTIP awards are considered vested. In the event the participant is involuntarily terminated without cause or the participant terminates employment for good reason, in either case, within two years following a change in control, the remaining portion of the participant’s earned award shall become fully vested and immediately payable. The values in the “Death and Disability” and “Change In Control With Involuntary Termination Other Than for Cause or Termination with Good Reason” columns include the unvested portion of Mr. O’Connor’s 2020 LTIP award. (4) Contractual disability and death payment. The Company has an agreement with Mr. Hovnanian which provides that in the event of his disability or death during his employment with the Company he (or his designated beneficiary, estate or legal representative) will be entitled to receive a lump sum payment of $10 million. (5) Change in control severance payment. The Company has entered into a change in control agreement with Mr. O’Connor. Such agreement provides that if, within two years of the occurrence of a change in control, Mr. O’Connor is involuntarily terminated other than for cause or Mr. O’Connor terminates for good reason (a material reduction in duties, title or responsibilities or any reduction in base salary), Mr. O’Connor, upon execution of the Company’s standard release, would receive a lump sum cash payment equal to one year’s annual base salary plus the average of the last three years’ bonuses and become 100% vested in all outstanding stock options, RSUs and deferred shares granted prior to the change in control, to the extent not previously vested. In addition, if the change in control occurs following the end of a LTIP performance period, the unpaid cash and stock portions of the LTIP award will continue to be paid to Mr. O’Connor on the scheduled payout dates. The amounts in the table reflect the additional payments that Mr. O’Connor would have received had a change in control occurred and his employment was terminated involuntarily other than for cause or for good reason on the last day of the fiscal year. This agreement does not provide for excise tax gross-ups. Accrued and unpaid vacation. Represents accrued but unpaid vacation payable upon termination for any reason. Mr. Hovnanian does not accrue vacation. 7 . PAY RATIO DISCLOSURE As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K under the Securities Exchange Act of 1934, we are providing the following disclosure about the relationship of the median of the annual total compensation of our employees to the annual total compensation of Mr. Hovnanian, our President, Chief Executive Officer and Chairman of the Board. For fiscal year 2023, The median of the annual total compensation of all of our employees, other than Mr. Hovnanian, was $128,806;

  77. Liquidity

    | | | | | | Change in Pension Value and Nonqualified Deferred Compensation Earnings | | | | | Fees Earned or Paid in Cash | Stock Awards | Option Awards | Non-Equity Incentive Plan Compensation | | All Other Compensation | | | Name | | | | | | | Total | | | ($) (1) | ($) (2) | ($) | ($) | ($) | ($) (3) | ($) | | Robert B. Coutts | 176,500 | 105,020 | — | — | — | 15,000 | 296,520 | | Miriam Hernandez-Kakol | 174,000 | 105,020 | — | — | — | 15,000 | 294,020 | | Edward A. Kangas | 274,000 | 120,033 | — | — | — | 15,000 | 409,033 | | Joseph A. Marengi | 224,000 | 120,033 | — | — | — | 15,000 | 359,033 | | Vincent Pagano | 176,500 | 105,020 | — | — | — | 15,000 | 296,520 | | Robin Stone Sellers | 176,500 | 105,020 | — | — | — | 15,000 | 296,520 |