DEF 14A of Hovnanian Enterprises Inc, Feb 7, 2025

DEF 14A of Hovnanian Enterprises Inc

Filed Feb 7, 2025 · FY20240001140361-25-003579

Open on EDGAR

  1. (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

    | | 104 | Actions for Fiscal 2025 | | | 105 | Tax Deductibility & Accounting Implications | | | 106 | Policy & Practices on Granting Equity Awards | | | 107 | Stock Ownership Guidelines & Delayed Delivery Periods | | EXECUTIVE COMPENSATION | 110 | | | | 110 | Summary Compensation Table | | | 114 | Grants Of Plan-Based Awards in Fiscal 2024 | | | 116 | Outstanding Equity Awards at Fiscal 2024 Year-End | | | 122 | Option Exercises & Stock Vested in Fiscal 2024 | | | 124 | Nonqualified Deferred Compensation for Fiscal 2024 | | | 128 | Potential Payments Upon Termination or Change-In-Control | | | 134 | Pay Ratio Disclosure | | | 136 | Pay Versus Performance | | | 141 | Non-Employee Director Compensation |

  2. PROXY STATEMENT

    PROXY STATEMENT

  3. PROXY STATEMENT

    | GENERAL | | | HOVNANIAN ENTERPRISES, INC. 90 Matawan Road, Fifth Floor, Matawan, N.J. 07747 | The accompanying proxy is solicited on behalf of the Board of Directors (the “Board”) of Hovnanian Enterprises, Inc. (the “Company”, “we”, “us” or “our”) for use at the 2025 Annual Meeting of Shareholders (the “2025 Annual Meeting”) referred to in the foregoing Notice and at any adjournment thereof. Shares represented by properly executed proxies that are received or executed in time and not revoked will be voted in accordance with the specifications provided thereon. If no specifications are made in an executed proxy, the persons named in the accompanying proxy card(s) will vote the shares represented by such proxies (1) for the Board of Directors’ slate of directors, (2) for the ratification of the selection of Deloitte & Touche LLP, an independent registered public accounting firm, to examine the financial statements of the Company for the fiscal year ending October 31, 2025, (3) for the approval, in a non-binding, advisory vote, of the compensation of the Company’s named executive officers, and (4) on any other matters as recommended by the Board of Directors, unless contrary instructions are given. Any person may revoke a previously designated proxy before it is exercised. If you voted by Internet, telephone or mail and are a shareholder of record, you may change your vote and revoke your proxy by (1) delivering written notice of revocation to Elizabeth Tice, Secretary, Hovnanian Enterprises, Inc., 90 Matawan Road, Fifth Floor, Matawan, N.J. 07747, provided such notice of revocation is received no later than March 26, 2025, (2) voting again by Internet or telephone at a later time before the closing of voting facilities at 11:59 p.m. (Eastern Time) on March 26, 2025, (3) submitting a properly signed proxy card with a later date that is received no later than March 27, 2025 prior to voting at the meeting or (4) revoking your proxy and voting in person at the 2025 Annual Meeting. If you hold your shares in street name, you may submit new voting instructions by contacting your bank, broker or other nominee. You may also change your vote or revoke your proxy in person at the 2025 Annual Meeting if you obtain a signed proxy from the record holder (bank, broker or other nominee) giving you the right to vote the applicable shares. Please note that attendance at the 2025 Annual Meeting will not by itself revoke a proxy. |

  4. PROXY STATEMENT

    | We will bear the costs of soliciting proxies from the holders of our Class A Common Stock and Class B Common Stock (collectively, the “Common Stock”). We are initially soliciting these proxies by mail and electronic mail, but solicitation may be made by our directors, officers and selected other employees telephonically, electronically or by other means of communication. Directors, officers and employees who help us in the solicitation will not be specially compensated for those services, but they may be reimbursed for their out-of-pocket expenses incurred in connection with the solicitation. Brokerage houses, nominees, fiduciaries and other custodians will be requested to forward soliciting materials to beneficial owners and will be reimbursed for their reasonable out-of-pocket expenses incurred in sending proxy materials to beneficial owners. |

  5. PROXY STATEMENT

    VOTING RIGHTS & SECURITY OWNERSHIP of CERTAIN BENEFICIAL OWNERS & MANAGEMENT The Board of Directors has set January 28, 2025 as the record date for the 2025 Annual Meeting. As of the close of business on the record date, the outstanding voting securities of the Company consisted of 5,195,297 shares of Class A Common Stock, each share entitling the holder thereof to one vote, and 729,354 shares of Class B Common Stock, each share entitling the holder thereof to ten votes if certification of specified ownership criteria have been timely met. Other than as set forth in the table below, there are no persons known to the Company to be the beneficial owners of shares representing more than 5% of either the Company’s Class A Common Stock or Class B Common Stock, which represent the classes of the Company’s voting stock. The following table sets forth, as of January 28, 2025, (1) the Class A Common Stock and Class B Common Stock of the Company beneficially owned by holders of more than 5% of either the Class A Common Stock or the Class B Common Stock of the Company and (2) the Class A Common Stock, Class B Common Stock and Depositary Shares of the Company beneficially owned by each Director, each nominee for Director, each executive officer named in the tables set forth under “Executive Compensation” beginning on page 110 (the “named executive officers”) and all Directors and executive officers as a group. Currently none of the Directors and executive officers own any shares of 7.625% Series A Preferred Stock.

  6. PROXY STATEMENT

    | | Class A Common Stock (1) | | Class B Common Stock (1) | | | | Amount and Nature of Beneficial Ownership | Percent of Class (2) | Amount and Nature of Beneficial Ownership | Percent of Class (2) | | Directors, Nominees for Director, Named Executive Officers & Directors and Executive Officers as a Group | | | | | | Ara K. Hovnanian (3) | 25,203 | 0.49% | 142,026 | 18.22% | | Alexander A. Hovnanian (4) | 14,830 | 0.29% | 97,009 | 13.24% | | Robert B. Coutts | 31,117 | 0.60% | — | — | | Miriam Hernandez-Kakol | — | — | — | — | | Edward A. Kangas | 5,116 | 0.10% | — | — | | Joseph A. Marengi | 22,535 | 0.43% | — | — | | Brad G. O’Connor | 14,947 | 0.29% | — | — | | Vincent Pagano Jr. | 19,414 | 0.37% | — | — | | Robin Stone Sellers | 13,350 | 0.26% | — | — | | J. Larry Sorsby (5) | 106,540 | 2.03% | — | — | | Michael P. Wyatt | 5,772 | 0.11% | — | — | | All Directors and executive officers as a group (11 persons) | 438,261 | 8.34% | 732,982 | 93.62% | | Holders of More Than 5% | | | | | | Kevork S. Hovnanian Family Limited Partnership (6) | — | — | 193,353 | 26.51% | | Hovnanian Family 2012 L.L.C. (7) | 1 | 0.00% | 126,407 | 17.33% | | Trusts for Kevork S. Hovnanian’s Family (8) | 179,436 | 3.45% | 174,187 | 23.88% | | BlackRock, Inc. (9) | 469,480 | 9.04% | — | — | | The Vanguard Group (10) | 331,451 | 6.38% | — | — |

  7. PROXY STATEMENT

    (1) The figures in the table with respect to Class A Common Stock do not include the shares of Class B Common Stock beneficially owned by the specified persons. Shares of Class B Common Stock are convertible at any time on a share-for-share basis to Class A Common Stock. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission (the “SEC”), which generally attribute ownership to persons who have or share voting or investment power with respect to the relevant securities. Shares of Common Stock that may be acquired within 60 days upon exercise of outstanding stock options are deemed to be beneficially owned. Securities not outstanding, but included in the beneficial ownership of each such person, are deemed to be outstanding for the purpose of computing the percentage of outstanding securities of the class owned by such person, but are not deemed to be outstanding for the purpose of computing the percentage of the class owned by any other person. Except as indicated in these footnotes, and subject to community property laws where applicable, the persons named in the table have sole voting and investment power with respect to all securities shown as beneficially owned by them. Shares of Class A Common Stock subject to options currently exercisable or exercisable within 60 days of January 28, 2025, whether or not in-the-money, include the following: B. O’Connor (6,500), V. Pagano (2,014), J. Sorsby (50,000), M. Wyatt (2,250) and all Directors and executive officers as a group (60,764). Shares of Class B Common Stock subject to options currently exercisable or exercisable within 60 days of January 28, 2025, whether or not in-the-money, include the following: Ara Hovnanian (50,000), Alexander Hovnanian (3,600) and all Directors and executive officers as a group (53,600). On July 29, 2008, the Company’s Board of Directors declared a dividend of one Preferred Stock Purchase Right for each outstanding share of Class A Common Stock and Class B Common Stock (which ratio of rights to shares is subject to adjustment in accordance with the Company’s Rights Agreement with Computershare Trust Company, N.A. (as amended, the “Amended Stockholder Rights Plan”)). The dividend was paid to stockholders of record on August 15, 2008. Subject to the terms, provisions and conditions of the Company’s Amended Stockholder Rights Plan, if the Preferred Stock Purchase Rights become exercisable, each Preferred Stock Purchase Right would initially represent the right to purchase from the Company 1/10,000th of a share of Series B Junior Preferred Stock for a per share purchase price as specified in the Amended Stockholder Rights Plan. However, prior to exercise, a Preferred Stock Purchase Right does not give its holder any rights as a stockholder, including without limitation, any dividend, voting or liquidation rights. (2) Based upon the number of shares outstanding plus options currently exercisable or exercisable within 60 days of January 28, 2025, held by the applicable Director, nominee for Director, named executive officer, group or other holder. (3) Includes 11,645 shares of Class A Common Stock and 10,976 shares of Class B Common Stock held in family-related trusts as to which Ara Hovnanian has shared voting power and shared investment power and 668 shares of Class A Common Stock and 812 shares of Class B Common Stock held by Mr. Hovnanian’s wife. (4) Includes 14,272 shares of Class A Common Stock and 82,404 shares of Class B Common Stock held by trusts for the benefit of Ara Hovnanian’s family members, and over which Mr. Alexander Hovnanian is the investment trustee with dispositive power and voting power. The business address of the trusts is 90 Matawan Road, Fifth Floor, Matawan, New Jersey 07747. (5) Includes 4,056 shares of Class A Common Stock held through a grantor retained annuity trust, of which Mr. Sorsby’s wife is the trustee, and 3,200 shares of Class A Common Stock held through a revocable trust, of which Mr. Sorsby and his wife are trustees. (6) Represents 193,353 shares of Class B Common Stock held by the Kevork S. Hovnanian Family Limited Partnership, a Connecticut limited partnership (the “Limited Partnership”). Ara Hovnanian is the managing general partner of the Limited Partnership, and accordingly, the shares held by the Limited Partnership are included in “All Directors and executive officers as a group,” but such shares are not also included in Mr. Hovnanian’s separate figure of beneficial ownership. The business address of the Family Limited Partnership is 90 Matawan Road, Fifth Floor, Matawan, New Jersey 07747. (7) Represents 1 share of Class A Common Stock and 126,407 shares of Class B Common Stock held by the Hovnanian Family 2012 L.L.C. (the “2012 LLC”). Ara Hovnanian is the special purpose manager with respect to investments in the Company, and accordingly, the shares held by the 2012 LLC are included in “All Directors and executive officers as a group,” but such shares are not also included in Mr. Hovnanian’s separate figure of beneficial ownership. The business address of the 2012 LLC is 90 Matawan Road, Fifth Floor, Matawan, New Jersey 07747. (8) Represents 179,436 shares of Class A Common Stock and 174,187 shares of Class B Common Stock held by the various trusts for the benefit of members of the family of Kevork S. Hovnanian. Ara Hovnanian is the special purpose trustee with respect to investments in the Company and, accordingly, the shares held by these trusts are included in “All Directors and executive officers as a group,” but such shares are not also included in Mr. Hovnanian’s separate figure of beneficial ownership. The business address of the trusts is 90 Matawan Road, Fifth Floor, Matawan, New Jersey 07747. (9) Information shown is based on information reported by the filer on Schedule 13G/A filed with the SEC on February 5, 2025, in which BlackRock, Inc. reported sole dispositive power over 469,480 shares of Class A Common Stock and sole voting power over 459,992 shares of Class A Common Stock (the percentage of Class A Common Stock is based on 5,195,297 shares of Class A Common Stock outstanding on January 28, 2025, the record date). The address for BlackRock, Inc. is 50 Hudson Yards, New York, NY 10001. This ownership is permitted under Article Eighth of the Restated Certificate of Incorporation and under the Rights Agreement, dated as of August 14, 2008, as amended by Amendment No. 1 to the Rights Agreement, effective January 11, 2018, by Amendment No. 2 to the Rights Agreement, effective January 18, 2021, and Amendment No. 3 to the Rights Agreement, effective January 11, 2024, between Hovnanian Enterprises, Inc. and Computershare Trust Company, N.A. (as successor to National City Bank), as Rights Agent. (10) Information shown is based on information reported by the filer on Schedule 13G filed with the SEC on November 12, 2024, in which The Vanguard Group reported sole dispositive power over 323,154 shares of Class A Common Stock, shared dispositive power over 8,297 shares of Class A Common Stock, sole voting power over 0 shares of Class A Common Stock and shared voting power of 3,925 shares of Class A Common Stock (the percentage of Class A Common Stock is based on 5,195,297 shares of Class A Common Stock outstanding on January 28, 2025, the record date). The address for The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355. This ownership is permitted under Article Eighth of the Restated Certificate of Incorporation and under the Rights Agreement, dated as of August 14, 2008, as amended by Amendment No. 1 to the Rights Agreement, effective January 11, 2018, by Amendment No. 2 to the Rights Agreement, effective January 18, 2021, and Amendment No. 3 to the Rights Agreement, effective January 11, 2024, between Hovnanian Enterprises, Inc. and Computershare Trust Company, N.A. (as successor to National City Bank), as Rights Agent. DELINQUENT SECTION 16(A) REPORTS

  8. PROXY STATEMENT

    Section 16(a) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), requires our officers, directors and persons who own more than 10% of our common stock to file reports of ownership and changes in ownership with the SEC. These officers, directors and 10% stockholders are also required by SEC rules to furnish the Company with copies of all Section 16(a) reports they file. Based solely on a review of copies of Forms 3, 4 or 5 filed by the Company on behalf of its directors and officers or otherwise provided to the Company, the Company believes that during and with respect to the year ended October 31, 2024, its officers, directors and greater than 10% stockholders complied with all applicable Section 16(a) filing requirements.

  9. PROXY STATEMENT

    | PROPOSAL I | | | | —Election of Directors |

  10. PROXY STATEMENT

    ELECTION of DIRECTORS The Company’s Amended and Restated By-laws (the “Restated By-laws”) provide that the Board of Directors shall consist of up to eleven Directors who shall be elected annually by the shareholders. The Company’s Restated Certificate of Incorporation (the “Restated Certificate of Incorporation”) requires that, at any time when any shares of Class B Common Stock are outstanding, one-third of the Directors shall be independent, as defined therein. The Board of Directors has determined that a Board of Directors consisting of the eight nominees listed below is the best composition in order to satisfy both the independence requirements of the Restated Certificate of Incorporation as well as the rules of the New York Stock Exchange (the “NYSE”). The Board of Directors has also determined that Mr. Coutts, Ms. Hernandez-Kakol, Mr. Kangas, Mr. Marengi, Mr. Pagano and Ms. Sellers are independent as defined under the Restated Certificate of Incorporation and the NYSE rules. The Restated Certificate of Incorporation may be found on the Company’s website at www.khov.com under “Investor Relations,” “Corporate Governance,” “Highlights.” The following individuals have been recommended to the Board of Directors by the Corporate Governance and Nominating Committee and approved by the Board of Directors to serve as Directors of the Company to hold office until the next Annual Meeting of Shareholders and until their respective successors have been duly elected and qualified. In the event that any of the nominees for Director should become unavailable to serve as a Director, it is intended that the shares represented by proxies will be voted for such substitute nominees as may be nominated by the Board of Directors, unless the number of Directors constituting a full Board of Directors is reduced. The Company has no reason to believe, however, that any of the nominees is, or will be, unavailable to serve as a Director. Proxies cannot be voted for a greater number of persons than the number of nominees shown below.

  11. PROXY STATEMENT

    | BOARD of DIRECTORS | |

  12. PROXY STATEMENT

    | Name | Age | Company Affiliation | Year First Became a Director | | Ara K. Hovnanian | 67 | President, Chief Executive Officer, Chairman of the Board & Director | 1981 | | Robert B. Coutts | 74 | Independent Director | 2006 | | Miriam Hernandez-Kakol | 71 | Independent Director | 2022 | | Edward A. Kangas | 80 | Lead Independent Director | 2002 | | Joseph A. Marengi | 71 | Independent Director | 2006 | | Vincent Pagano Jr. | 74 | Independent Director | 2013 | | Robin Stone Sellers | 72 | Independent Director | 2018 | | J. Larry Sorsby | 69 | Director | 1997 |

  13. PROXY STATEMENT

    The Board of Directors seeks to ensure that the Board of Directors is composed of members whose particular experience, qualifications, attributes and skills, when taken together, will allow the Board of Directors to satisfy its oversight responsibilities effectively. As discussed below under “Corporate Governance and Nominating Committee” beginning on page 40, a slate of Directors to be nominated for election at the annual shareholders’ meeting each year is approved by the Board of Directors after recommendation by the Corporate Governance and Nominating Committee. In the case of a vacancy on the Board of Directors (other than one resulting from removal by shareholders), the Corporate Governance and Nominating Committee will identify individuals believed to be qualified candidates to serve on the Board of Directors and shall review the candidates who have met those qualifications with the Company’s Chairman, who will determine if the candidate is eligible for recommendation by the Corporate Governance and Nominating Committee to the full Board of Directors. If recommended, the Board of Directors will then approve a director nominee to fill the vacancy on the Board of Directors. In identifying candidates for Director, the Corporate Governance and Nominating Committee, the Chairman and the Board of Directors take into account (1) the comments and recommendations of members of the Board of Directors regarding the qualifications and effectiveness of the existing Board of Directors or additional qualifications that may be required when selecting new board members that may be identified in connection with the self-assessments described below under “Corporate Governance and Nominating Committee” beginning on page 40, (2) the requisite expertise and diverse backgrounds of the Board of Directors’ overall membership composition, (3) the independence of non-employee Directors and possible conflicts of interest of existing and potential members of the Board of Directors and (4) all other factors such bodies and persons consider appropriate. Although the Company has no formal policy regarding diversity, the Corporate Governance and Nominating Committee and the Board of Directors include diversity as one of several criteria that they consider in connection with selecting candidates for the Board of Directors. The Board of Directors seeks to ensure that it is composed of members whose background, expertise, qualifications, attributes and skills, when taken together, allow the Board of Directors to satisfy its oversight responsibilities effectively. Our current Board of Directors includes two individuals who identify as female and one who identifies as a racial minority. When considering whether directors and nominees have the experience, qualifications, attributes and skills, taken as a whole, to enable the Board of Directors to satisfy its oversight responsibilities effectively in light of the Company’s business and structure, the Corporate Governance and Nominating Committee and the Board of Directors focused primarily on the information discussed in each of the Directors’ individual biographies set forth below on pages 33 to 37. In particular, the Corporate Governance and Nominating Committee and the Board of Directors considered, with regard to: Mr. Coutts, his strong background in the manufacturing sector and technology and program experience, believing that his experience with a large multinational corporation engaged in the manufacture of complicated products and experience managing significant Defense and National Interest cyber and systems programs is invaluable in evaluating the multiple integrated processes in the homebuilding business and also valuable in performance management and other aspects of the Company’s operations; Ms. Hernandez-Kakol, her significant experience, expertise and background in growing enterprises and executing strategy and her broad perspective brought by her track record of successfully bringing new solutions to market to drive growth; Mr. Kangas, his significant experience, expertise and background in accounting matters, including the broad perspective brought by his experience in advising clients in many diverse industries; Mr. Marengi, his strong background in the technology sector, because new technologies and their cost and benefit analyses and vigilance in the areas of cybersecurity and data protection are important to the Company; Mr. Pagano, his significant experience, expertise and background in legal and capital markets matters, including the broad perspective brought by his experience in advising clients in the homebuilding industry and many other diverse industries; Ms. Sellers, her strong background in the real estate and home sales industries and her broad perspective brought by experience in advising clients in real estate and other industries and her experience managing and advising worldwide residential marketing and sales businesses; Mr. Hovnanian, our Chief Executive Officer and Chairman of the Board, his more than forty-five years of experience with the Company; and Mr. Sorsby, our former Chief Financial Officer, his more than thirty-five years of experience with the Company.

  14. PROXY STATEMENT

    | Board of Directors’ Experience Matrix | Ara K. Hovnanian** | Robert B. Coutts | Miriam Hernandez-Kakol | Edward A. Kangas* | Joseph A. Marengi | Vincent Pagano Jr. | Robin Stone Sellers | J. Larry Sorsby** | | Enterprise Leadership Experience as a senior executive of a large commercial organization. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Homebuilding/Real Estate Professional experience in acquiring, managing or selling of residential real estate. | ✓ | | | | | ✓ | ✓ | ✓ | | Financial Professional experience in preparing, auditing or evaluating financial statements or in the management of commercial investments. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Technology/Cybersecurity Experience in the management of technology applications and/or cybersecurity risk. | | ✓ | ✓ | | ✓ | | | | | Public Company Experience serving as a director of another public company. | | ✓ | | ✓ | ✓ | ✓ | | | | Risk Management Experience with the implementation of strategic risk plans and/or the management of the associated risks. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Human Capital Experience in attracting, developing and retaining of talent and/or succession planning. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Sales & Marketing Experience in the operation and management of sales and marketing strategies, branding and consumer trends. | ✓ | | ✓ | ✓ | ✓ | | ✓ | ✓ | | Corporate Governance Experience in corporate governance for a public company. | ✓ | ✓ | | ✓ | ✓ | ✓ | | ✓ |

  15. PROXY STATEMENT

    | *Lead Independent Director **Non-Independent Director |

  16. PROXY STATEMENT

    | BOARD of DIRECTORS | |

  17. PROXY STATEMENT

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

  18. PROXY STATEMENT

    Mr. Hovnanian has been Chief Executive Officer since July 1997 after being appointed President in 1988 and Executive Vice President in 1983. Mr. Hovnanian joined the Company in 1979, has been a Director of the Company since 1981 and was Vice Chairman from 1998 through November 2009. In November 2009, he was elected Chairman of the Board following the death of Kevork S. Hovnanian, the chairman and founder of the Company and the father of Mr. Hovnanian. Mr. Hovnanian is Chairman of the Company’s Strategy Committee. ROBERT B. COUTTS 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. MIRIAM HERNANDEZ-KAKOL 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. EDWARD A. KANGAS Lead 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. In addition, by virtue of his position as the Company’s Lead Independent Director, Mr. Kangas also serves as an ex officio member of the Strategy Committee. JOSEPH A. MARENGI 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. VINCENT PAGANO JR. 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. ROBIN STONE SELLERS 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, a real estate consulting firm, 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 and the McHarg Center for Urbanism and Ecology, both at the University of Pennsylvania, and was Chair of the Board of Forbes Global Properties, a private real estate marketing firm, 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. J. LARRY SORSBY Director

  19. PROXY STATEMENT

    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. 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. Mr. Sorsby was elected as a Director of Hovnanian Enterprises, Inc. in 1997, and is a member of the Company’s Strategy Committee.

  20. PROXY STATEMENT

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

  21. PROXY STATEMENT

    During the year ended October 31, 2024, the Board of Directors held four 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, 2024, each Director attended 100% of the meetings of the Board of Directors and 100% of the Committee meetings on which each Director served. The Company’s Corporate Governance Guidelines (“Governance Guidelines”) provide that directors are expected to attend the Annual Meeting of Shareholders. All of the members of the Board of Directors attended the Annual Meeting of Shareholders held on March 21, 2024. AUDIT COMMITTEE The members of the Audit Committee of the Board of Directors during the fiscal year ended October 31, 2024 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,” “Highlights” and the independence requirements mandated by the NYSE listing standards. During the fiscal year ended October 31, 2024, 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 144. 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, 2024 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, 2024, the Compensation Committee met on four 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,” “Highlights.” 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, 2024, 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. In addition, the Corporate Governance and Nominating Committee has a Cybersecurity Subcommittee whose members are Ms. Sellers and Messrs. Coutts and Marengi. The Cybersecurity Subcommittee is currently chaired by Ms. Sellers. During fiscal year ended October 31, 2024, the Cybersecurity Subcommittee met on three occasions. 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.

  22. PROXY STATEMENT

    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 2026 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. 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,” “Highlights” and the Governance Guidelines are available at the same website address under “Investor Relations,” “Corporate Governance,” ”Guidelines.” 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. During the fiscal year ended October 31, 2024, the Strategy Committee met on four occasions. 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,” “Highlights.” VOTE REQUIRED 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 2025 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.

  23. PROXY STATEMENT

    | PROPOSAL II | | | | —Ratification of the Selection of an Independent Registered Public Accounting Firm |

  24. PROXY STATEMENT

    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, 2025 is submitted to this 2025 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 2025 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, 2025 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 2025 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, 2025.

  25. PROXY STATEMENT

    | PROPOSAL III | | —Advisory Vote on Executive Compensation |

  26. PROXY STATEMENT

    PROPOSAL III In accordance with the requirements of Section 14A of the Exchange Act (which was added by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”)) and the related rules of the SEC, we are including in these proxy materials a separate resolution subject to shareholder vote to approve, in a non-binding advisory vote, the compensation of our named executive officers (“NEOs”), as disclosed on pages 58 to 140. In considering their vote, shareholders may wish to review with care the information on the Company’s compensation policies and decisions regarding the NEOs presented in “Compensation Discussion and Analysis” on pages 58 to 108, as well as the discussion regarding the Compensation Committee on pages 52 to 57. As we discuss in the “Compensation Discussion and Analysis” section, the Board of Directors believes that the Company’s long-term success depends in large measure on the talents of the Company’s employees. The Company’s compensation system plays a significant role in the Company’s ability to attract, retain and motivate the highest quality associates in a difficult market. The principal underpinnings of the Company’s compensation system are an acute focus on performance, shareholder alignment, sensitivity to the relevant marketplace and a long-term orientation. 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 (“LTIPs”) adopted by the Company have conditioned payouts on the achievement of certain targets for increasing profitability and earnings before interest and taxes (“EBIT”) Return on Investment and lowering or refinancing debt, reducing interest expense and achieving strategic initiatives over multi-year performance periods. Moreover, in recent years, the NEOs have received performance share units (“PSUs”) and options, which are tied to financial performance and/or stock price performance. The PSU awards are tied to financial performance conditions (for 2024, absolute EBIT levels and absolute EBIT Return on Investment levels). As discussed in the “Compensation Discussion and Analysis” section, 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 at 252% of what was achieved for the most recently completed three -year periods at the time the LTIP awards were granted. In addition, LTIP awards granted during fiscal years 2023 and 2024 require Relative EBIT Return on Investment to be in the top quintile compared to our Peer Group (as defined below) to earn the maximum potential award for that metric. Moreover, our 2024 LTIP requires a 2,270 and 3,603 basis point improvement in net debt to capital at target and maximum performance, respectively, compared to the average net debt to capital level on the last day of the three most recently completed fiscal years at the time the award was granted. 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 2024, the Company has reduced its public debt by about $1.6 billion, including a $579 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 return on average equity (“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 five years ending with fiscal 2024. In addition, the Company continues to rank highest among its Peer Group in inventory turns. The Compensation Committee’s policies and actions have included the following: Selection of bonus metrics that correspond to the financial and strategic operational needs of the Company during the relevant period. Focus on increasing profitability and EBIT Return on Investment and lowering or refinancing debt, reducing interest expense and achieving strategic initiatives over multi-year performance periods through periodic LTIP awards for all NEOs. Practice of tying portions of equity awards to performance criteria. For example, in fiscal 2024, the NEOs were granted PSUs, half of which are tied to absolute EBIT levels and half of which are tied to absolute EBIT Return on Investment levels. Additional details are described below under “Compensation Discussion and Analysis—Details of Compensation Elements—Stock Grants.” Active management of both equity award levels and the number of shares available for new equity-based awards. The text of the resolution in respect of this proposal is as follows: “Resolved, that the compensation paid to the Company’s named executive officers as disclosed pursuant to Item 402 of Regulation S-K in the Proxy Statement relating to the Company’s Annual Meeting of Shareholders to be held on March 27, 2025, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby approved.” The approval of the compensation paid to the Company’s named executive officers 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 2025 Annual Meeting. In determining whether the proposal 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.

  27. PROXY STATEMENT

    1 . EXECUTIVE SUMMARY BACKGROUND 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 2024, the Company has reduced its public debt by about $1.6 billion, including a $579 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 five years ending with fiscal 2024. In addition, the Company continues to rank highest among its Peer Group in inventory turns. COMPANY PERFORMANCE IN FISCAL 2024 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. From January 2022 to October 2023, 30-year mortgage rates more than doubled. The sharp increase in interest rates, persistently high levels of inflation and doubt about the stability of the economy, negatively impacted housing demand beginning in the second half of fiscal 2022 and into fiscal 2023. During the first quarter of fiscal 2024, mortgage rates declined, which had a positive effect on our sales pace. Rates fluctuated for the remainder of fiscal 2024 and affordability generally remains challenging for homebuyers. We have been aggressive in our pricing, incentives and concessions in order to align with the current market. We continue to use our increased inventory of quick-move-in homes (“QMI homes”) to help meet buyers’ needs for more affordable housing in the recent uncertain interest rate environment. The time between contract signing and closing is shorter with a QMI home as compared to a to be built home, which provides customers with more certainty on their mortgage pricing. The availability of QMI homes also allows us to offer mortgage interest rate buydown assistance, which is a tool we offer through our wholly-owned mortgage banking subsidiary (“K. Hovnanian Mortgage”), to help ease the impact of higher monthly payments from rising interest rates. We pay the cost of interest rate buydowns for customers that qualify through K. Hovnanian Mortgage and decide to use the program. The level of interest rate based incentives utilized differs across our markets and is one of several available options we use to drive sales and close homes. The number of existing home sales listings are at all-time low levels, which limits the supply of homes available for purchase, leading to increased demand for new homes, which leads to improved pricing power. During fiscal 2024, there was stronger demand for our homes as compared to the prior year, which led to a significant increase in net contracts and net contracts per average active selling community year over year. We were able to increase net prices in approximately 34% of our communities during the fourth quarter of fiscal 2024. There still remains a great degree of uncertainty due to inflation, the continued possibility of an economic recession, employment risk and the potential for further mortgage rate increases. While we continue to experience some lingering supply chain issues, we remain focused on continuing to shorten our construction cycle times and building on our national initiatives to drive down costs with our material providers and trade partners. The changing conditions in the housing market, and in the general economy, make it difficult to predict how strongly our business will be impacted by these external factors over fiscal 2025 and beyond. Our cash position allowed us to spend $995.4 million on land purchases and land development for long-term growth during fiscal 2024, and still have total liquidity of $338.2 million, including $210.0 million of homebuilding cash and cash equivalents and $125.0 million of borrowing capacity under our senior secured revolving credit facility as of October 31, 2024. Additional information on our results for the year ended October 31, 2024 were as follows: For the year ended October 31, 2024, sale of homes revenues increased 9.3% as compared to the prior year, primarily due to a 9.6% increase in homes delivered, partially offset by a 0.3% decrease in average sales price. The increase in deliveries in fiscal 2024 was primarily the result of a 15.0% increase in community count as well as an increase in QMI contracts. Homebuilding gross margin percentage decreased from 19.6% for the year ended October 31, 2023 to 18.7% for the year ended October 31, 2024, and homebuilding gross margin percentage, before cost of sales interest expense and land charges, decreased from 22.7% for the year ended October 31, 2023 to 22.0% for the year ended October 31, 2024. The decreases were primarily due to the increased use of incentives and concessions, including additional mortgage interest rate buydowns, to make our homes more affordable. Homebuilding gross margin percentage, before cost of sales interest expense and land charges, is a non-GAAP measure. See page 33 of the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2024 for a reconciliation of this measure to homebuilding gross margin percentage, the most directly comparable GAAP measure. Selling, general and administrative expenses (including corporate general and administrative) increased $37.5 million for the year ended October 31, 2024 as compared to the prior year, however, as a percentage of total revenue, such costs were relatively flat at 11.4% for the year ended October 31, 2024 compared to 11.1% for the year ended October 31, 2023. The increase was primarily due to an increase in advertising expenses and compensation expense, mainly related to increased headcount and annual merit increases, along with grants of phantom stock awards under our 2019, 2023 and 2024 long-term incentive plans, for which expense is impacted by the change in our stock price each period. The Company increased its headcount in fiscal 2024 in preparation for anticipated growth in community count and deliveries in fiscal 2025.

  28. 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 LTIPs adopted by the Company have conditioned payouts on the achievement of certain targets for increasing profitability and EBIT Return on Investment, and lowering or refinancing debt, reducing interest expense and achieving strategic initiatives over multi-year performance periods. Moreover, in recent years, the NEOs have received PSUs which are tied to financial performance conditions (for 2024, absolute EBIT and absolute EBIT Return on Investment levels). The rigor of the performance conditions related to the LTIPs 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. In addition, LTIP awards granted during fiscal years 2023 and 2024 require Relative EBIT Return on Investment to be in the top quintile compared to our Peer Group to earn the maximum potential award for that metric. Moreover, our 2024 LTIP requires a 2,270 and 3,603 basis point improvement in net debt to capital at target and maximum performance, respectively, compared to the average net debt to capital level on the last day of the three most recently completed fiscal years at the time the award was 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.

  29. 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.

  30. 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 year 2024, due to the merger of M.D.C. Holdings, Inc. with Sekisui House, Ltd., the Committee determined to modify the Company’s Peer Group by removing M.D.C. Holdings, Inc. and adding Dream Finders Homes, Inc. 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.

  31. No Employment Agreements with NEOs other than CFO

    No Employment Agreements with NEOs other than CFO Other than with respect to the Chief Financial Officer (the “CFO”), the Company does not maintain employment or other agreements for our NEOs 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 (6) to the Potential Payments Upon Termination or Change-in-Control Table. No Tax Gross-Ups or Defined Benefit Pension Plans for Any NEO.

  32. Investor Engagement

    Investor Engagement During fiscal 2024, the Company conducted proactive investor outreach programs, including having its executives attend five investor conferences as well as other meetings with the investment community and meeting by teleconference or in person with more than 139 investors either one-on-one or in small groups. As a result, the Company’s executives met with institutional holders representing approximately 77% of shares held by our top ten shareholders that are actively managed funds. From time to time, Mr. Ara Hovnanian, who is also a member 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 2024 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 2024 The Committee’s compensation decisions for fiscal 2024 reflected a conservative approach to fixed pay elements (base salary), the achievement of pre-established goals (annual bonuses) and long-term awards.

  33. Regular Annual Bonuses

    Regular Annual Bonuses Consistent with the achievement of specified financial objectives, fiscal 2024 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 2024. Additional details are described under “Details of Compensation Elements—Annual Bonuses—Regular Bonuses” below.

  34. Discretionary Bonuses

    Discretionary Bonuses The Committee did not award discretionary bonuses to any NEO for fiscal 2024.

  35. 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 2024, 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 LTIP awards to the NEOs in fiscal 2024 as further described below under “Details of Compensation Elements – Long-Term Incentive Programs.” The LTIP awards are tied to the achievement of specified financial performance conditions over a three-year performance period and are fully vested at the end of the performance period. The PSUs granted in fiscal 2024 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.

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

    | 2 . COMPENSATION PHILOSOPHY & OBJECTIVES | |

  37. 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 2024, the Company has reduced its public debt by about $1.6 billion, including a $579 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 five years ending with fiscal 2024. 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;

  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, 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 2024, 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 2024 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. Given the Company’s improved financial performance, effective December 23, 2023, the Committee restored Mr. Ara Hovnanian’s salary to $1,150,000, which was his base salary prior to the voluntary decrease on March 6, 2023. In light of his promotion to Chief Financial Officer, the Committee approved a base salary increase to $600,000, effective November 1, 2023, for Mr. O’Connor. For fiscal 2024, the salaries for Mr. Alexander Hovnanian and Mr. Wyatt were set at $600,000 and $600,222, respectively. 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 setting bonus formulas applicable to all NEOs other than Mr. Wyatt in December 2023, the Committee determined to continue to emphasize the importance of maintaining appropriate levels of liquidity, including the use of alternative capital raises, by retaining these metrics in the NEO’s bonus programs for fiscal 2024 and increasing the fiscal 2024 alternative capital raises goals to further enhance our liquidity in order to grow the Company. The Committee also determined to maintain the ROAE bonus components for each NEO. However, given the Company’s improved financial performance, the Committee raised the fiscal 2024 bonus cap for Mr. Ara Hovnanian to $7 million, which is higher than his 2023 bonus cap but lower than his 2022 bonus cap. In light of his promotion, the Committee increased Mr. O’Connor’s fiscal 2024 bonus potential to align with his new position. 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 the fiscal 2024 annual bonuses for Mr. Ara Hovnanian, Mr. O’Connor and Mr. Alexander Hovnanian, 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 2024 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: (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. For fiscal 2024, 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 15.97%. “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, 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 excluding losses from land impairments; and (3) 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 2024 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 2024. 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 Mr. Ara Hovnanian, Mr. O’Connor and Mr. Alexander Hovnanian are illustrated by the following tables.

  40. Regular Bonuses

    | | Mr. Ara Hovnanian Bonus* | Mr. O’Connor Bonus** | Mr. Alexander Hovnanian Bonus** | | ROAE | | | | | | Percentage of Pre-tax Profit | Percentage of Base Salary | Percentage of Base Salary | | 0.00% or less | 0.00% | 0.00% | 0.00% | | 5.00% | 1.00% | 20.00% | 20.00% | | 10.00% | 1.25% | 40.00% | 40.00% | | 15.00% | 1.50% | 80.00% | 80.00% | | 20.00% or more | 2.00% | 100.00% | 100.00% |

  41. Regular Bonuses

    | Number of Fiscal 2024 Quarter-Ends | Mr. Ara Hovnanian Bonus* | Mr. O’Connor Bonus** | Mr. Alexander Hovnanian Bonus** | | with Liquidity Balances at or Above $200 million | thousands | thousands | thousands | | 1 | $0.0 | $0.0 | $0.0 | | 2 | $700.0 | $125.0 | $125.0 | | 3 | $1,050.0 | $175.0 | $175.0 | | 4 | $1,400.0 | $225.0 | $225.0 |

  42. Regular Bonuses

    | Alternative Capital Raises Closed During Fiscal 2024 | Mr. Ara Hovnanian Bonus* | Mr. O’Connor Bonus** | Mr. Alexander Hovnanian Bonus** | | millions | thousands | thousands | thousands | | $150.0 or less | $0.0 | $0.0 | $0.0 | | $175.0 | $700.0 | $125.0 | $125.0 | | $200.0 | $1,050.0 | $175.0 | $175.0 | | $250.0 or more | $1,400.0 | $225.0 | $225.0 |

  43. Regular Bonuses

    | *Mr. Ara Hovnanian’s bonus is interpolated on a linear basis between the points shown in the table and subject to an overall cap of $7 million. | | **The bonuses for Mr. O’Connor and Mr. Alexander Hovnanian are interpolated on a linear basis between the points shown in the table. |

  44. Regular Bonuses

    For fiscal 2024, the Company achieved the maximum performance levels for ROAE, Liquidity Balances and Alternative Capital Raises. Specifically, fiscal 2024 ROAE, Pre-tax Profit and Alternative Capital Raises as defined under the bonus formulas for the NEOs were 34.6%, $350.4 million and $574.3 million, respectively, and Liquidity Balances were above $200 million for all four fiscal quarter-ends. Based on the above bonus formulas, Mr. Ara Hovnanian would have earned a cash bonus of $9,807,009 in the absence of the fiscal 2024 bonus cap. As a result of the application of the fiscal 2024 bonus cap, Mr. Ara Hovnanian earned $7,000,000, while Mr. O’Connor and Mr. Alexander Hovnanian earned cash bonuses equal to $1,050,000 and $1,050,000, respectively, which represented their maximum potential bonuses. The following description provides detail as to the components used to determine the fiscal 2024 annual bonus for Mr. Wyatt who serves as President of the East Group, a division of the Company which operates in Delaware, Florida, Georgia, Maryland, New Jersey, Ohio, Pennsylvania, South Carolina, Virginia and West Virginia. Mr. Wyatt’s bonus was based on the financial results of the East Group, since he was directly responsible for growing and maximizing the profits of the East Group. Mr. Wyatt’s bonus formula for fiscal 2024 provided for a bonus award equal to a percentage of (1) East Group Pre-Tax Profit based on achieving targeted levels of East Group Return on Inventory plus (2) a percentage of his base salary based on achieving targeted levels of East Group Customer Satisfaction plus (3) a percentage of his base salary based on achieving targeted levels of East Group Mortgage Capture, as illustrated by the table below. Return on Inventory is defined as Pre-Tax Profit divided by the average inventory balance of the East Group. Pre-Tax Profit for this purpose is defined as the profit for the East Group reflecting joint ventures as wholly- owned after profit sharing accrual and the allocation of all applicable business unit overhead(s), plus, if applicable, the allocable portion of title profits for the East Group after profit sharing accrual and all applicable overheads of the title company and $1,500 per home closed through K. Hovnanian Mortgage. In addition, for Fiscal Year 2024, Pre-tax Profit included $600 for each home that closed in the East Group and generated the $1,000 Department of Energy (“DOE”) Zero Energy Ready Home (ZERH) Multi-Family tax credit, $1,500 for each home that closed in the East Group and generated the $2,500 ENERGY STAR tax credit and $3,000 for each home that closed in the East Group and generated the $5,000 ZERH Single Family tax credit. Average Inventory Balance for this purpose is calculated as the average balance in the inventory accounts utilizing the last day ending balances of these accounts for each of the five consecutive fiscal quarters ending with the last quarter of the fiscal year. Customer Satisfaction is based on the average score for the “How likely would you be to recommend K. Hovnanian Homes to family and friends” question on the 45/60 day survey or its successor. It is evaluated quarterly based on the higher of the previous quarter’s results or the available cumulative results beginning August 1st of the previous fiscal year. Mortgage Capture is calculated based on all closings net of cash sales and Mt. Laurel obligations. In addition, certain denied or specialty loans that K. Hovnanian Mortgage cannot offer may be excluded from the capture rate provided that K. Hovnanian Mortgage’s conditions for backing out denied/specialty loans are met.

  45. The bonus formula for Mr. Wyatt is

    The bonus formula for Mr. Wyatt is illustrated by the following tables.

  46. Mr. Wyatt*

    | East Group Return on Inventory | Mr. Wyatt Bonus | | 0.00 – 10.00% | 1.25% of East Group Pre-tax Profit | | 15.00% | 1.50% of East Group Pre-tax Profit | | 20.00% | 1.75% of East Group Pre-tax Profit | | 25.00% or more | 2.00% of East Group Pre-tax Profit |

  47. Mr. Wyatt*

    | East Group Customer Satisfaction | Mr. Wyatt Bonus | | 85.00% | 10.00% of base salary | | 88.00% | 20.00% of base salary | | 91.00% or more | 30.00% of base salary |

  48. Mr. Wyatt*

    | East Group Mortgage Capture | Mr. Wyatt Bonus | | 80.00% | 5.00% of base salary | | 82.50% | 10.00% of base salary | | 85.00% or more | 15.00% of base salary |

  49. Mr. Wyatt*

    | *The bonus is interpolated on a linear basis between the points shown in the tables, provided that if East Group Return on Inventory is zero or lower, the portion of the bonus award for Customer Satisfaction and Mortgage Capture will be reduced to 50% of the bonus amounts for those categories listed above. |

  50. 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 2024. 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 2024, 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 Third Amended and Restated 2020 Hovnanian Enterprises, Inc. Stock Incentive Plan (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.

  51. Fiscal 2024 Equity Awards

    Fiscal 2024 Equity Awards In determining the fiscal 2024 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 2024 were made in the form of rights to receive shares of Class A Common Stock, except for the awards to Mr. Ara Hovnanian and Mr. Alexander Hovnanian, each of whom received equity awards in the form of rights to receive shares of Class B Common Stock. In making such determination for Messrs. Hovnanian, 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 share of Class B Common Stock would have relative to a share of Class A Common Stock, 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 Messrs. Hovnanian of receiving Class B Common Stock was equal to the value if they had received Class A Common Stock and that making their 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 4.0% and 0.2% change in the percentage of Hovnanian shareholder votes controlled by Mr. Ara Hovnanian and Mr. Alexander Hovnanian, respectively, caused by the later of vesting or delivery, in fiscal 2024, of Class B Hovnanian Common Stock awards. The Committee decided to award PSUs to the NEOs in fiscal 2024 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 2024, half of the PSUs were tied to absolute EBIT levels, and the other half of the PSUs were tied to absolute EBIT Return on Investment levels 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 absolute EBIT Return on Investment metric was chosen because the Committee determined that it measures pure operating performance. 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 14, 2029. Mr. Ara Hovnanian: In fiscal 2024, Mr. Ara Hovnanian received 19,086 target PSUs with a grant date fair value of $2,274,096 compared to 31,202 target PSUs in fiscal 2023 with a grant date fair value of $2,274,002. Mr. O’Connor: In fiscal 2024, Mr. O’Connor received 4,616 target PSUs with a grant date fair value of $549,996 compared to 2,882 target PSUs in fiscal 2023 with a grant date fair value of $210,040. Mr. Wyatt: In fiscal 2024, Mr. Wyatt received 1,176 target PSUs with a grant date fair value of $140,120. Mr. Alexander Hovnanian: In fiscal 2024, Mr. Alexander Hovnanian received 4,616 target PSUs with a grant date fair value of $549,996. 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 (1) income (loss) before interest and income tax expense during the performance period as reflected on the Company’s financial statements for such performance period; (2) minus the Company’s share of unconsolidated joint venture income (loss) as reflected on the Company’s financial statements; and (3) 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, 2025, excluding: (a) 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; (b) the impact of any items deemed by the Committee to be unusual or nonrecurring items; and (c) losses from land impairments and gains or losses from debt repurchases/debt retirement such as call premiums and related issuance costs.

  52. Fiscal 2024 Equity Awards

    | EBIT for the 4 Quarters Ending April 30, 2025 | Performance Multiplier* | | More than 6.7% below target | 50% | | Target | 100% | | 13.3% or more above target | 200% | | | *The applicable Performance Multiplier is interpolated on a linear basis between the points shown in the table. |

  53. Fiscal 2024 Equity Awards

    The number of PSUs tied to absolute EBIT Return on Investment which become earned PSUs shall equal the product of the target number of PSUs multiplied by the applicable Performance Multiplier as set forth below. “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 the Company’s financial statements for such performance period, 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. “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 the Company’s balance sheet, excluding capitalized interest and the impact of consolidated inventory not owned, for each of the five consecutive fiscal quarters ending April 30, 2025.

  54. Fiscal 2024 Equity Awards

    | EBIT Return on Investment for the 4 Quarters Ending April 30, 2025 | Performance Multiplier* | | More than 25% below target | 50% | | Target | 100% | | 25% or more above target | 200% | | | *The applicable Performance Multiplier is interpolated on a linear basis between the points shown in the table. |

  55. Achievement under the 2023 PSUs

    Achievement under the 2023 PSUs In fiscal 2023, 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 2023 PSUs were tied to absolute EBIT levels, while the other half of the PSUs were tied to EBIT Return on Investment 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 Investment 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 9, 2028.

  56. Achievement under the 2023 PSUs

    | | Target 2023 PSUs Tied to Absolute EBIT Levels | Target 2023 PSUs Tied to Relative EBIT Return on Investment Rank | | Mr. Ara K. Hovnanian | 15,601 | 15,601 | | Mr. Brad G. O’Connor | 1,441 | 1,441 | | Mr. Michael P. Wyatt | 961 | 961 | | Mr. Alexander A. Hovnanian | 3,087 | 3,087 |

  57. Achievement under the 2023 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 2023 PSUs please see our proxy statement relating to our 2024 annual shareholder meeting filed with the SEC on February 2, 2024.

  58. Achievement under the 2023 PSUs

    | EBIT for the 4 Quarters Ending April 30, 2024 | Performance Multiplier* | | $300 million or less (Threshold) | 50% | | $325 million (Target) | 100% | | $375 million or more (Maximum) | 200% | | | * The applicable Performance Multiplier is interpolated on a linear basis between the points shown in the table. |

  59. Achievement under the 2023 PSUs

    The Company’s EBIT for the four quarters ending April 30, 2024 was $563.9 million, 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 9, 2028. 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 as set forth below. For a definition of “EBIT Return on Investment” used in relation to our 2023 PSUs please see our proxy statement relating to our 2024 annual shareholder meeting filed with the SEC on February 2, 2024.

  60. Achievement under the 2023 PSUs

    | Relative EBIT Return on Investment Rank Compared to Peers for Each Company’s 4 Most Recently Completed Fiscal Quarters as of April 30, 2024 | Performance Multiplier* | | Bottom Three (Threshold) | 50% | | Rank 6 (Target) | 100% | | Top Three (Maximum) | 200% | | | *The applicable Performance Multiplier is interpolated on a linear basis between the points shown in the table. |

  61. Achievement under the 2023 PSUs

    Our relative EBIT Return on Investment rank compared to our Peers for each company’s four most recently completed fiscal quarters as of April 30, 2024 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 9, 2028. LONG-TERM INCENTIVE PROGRAMS

  62. 2024 Long-Term Incentive Program

    2024 Long-Term Incentive Program The 2024 Long-Term Incentive Program (the “2024 LTIP”) is entirely performance-based and is intended to incentivize achievement of specified relative EBIT Return on Investment goals as of October 31, 2026 and specified levels of net debt to capital at October 31, 2026. The Committee chose these metrics to align and incentivize the NEOs to focus on attaining operating efficiencies and improving our bottom line and our balance sheet. Each of the NEOs is a participant in the 2024 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, 2023 (the beginning of fiscal 2024) and will end on October 31, 2026 (that is, the performance period covers fiscal 2024, 2025 and 2026). 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, 2028. The cash-settled LTIP phantom share portion of the awards will be distributed following the end of the performance period. Like PSU and other LTIP awards, in accordance with the Committee’s intentions, the payout under the 2024 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, 2024. Relative to the 2023 LTIP, the Committee determined to increase Mr. Ara Hovnanian’s specific target multiple of base salary for the 2024 LTIP from 1.35 to 1.75 in order to (1) account for the fact that Mr. Hovnanian had not in recent years, upon his recommendation, received an increase in base salary whereas the other NEOs have received increases in their respective base salaries consistent with the Company’s ordinary course merit-based salary and cost of living increase practices and (2) more closely align Mr. Hovnanian’s LTIP award value with peer group practices. The following describes the target multiple of base salary and form of payout for each NEO:

  63. 2024 Long-Term Incentive Program

    | | Target Multiple of Base Salary | Payout Method | | Mr. Ara K. Hovnanian | 1.75 | 50% shares/50% phantom shares | | Mr. Brad G. O’Connor | 0.75 | 50% shares/50% phantom shares | | Mr. Michael P. Wyatt | 0.675 | 50% shares/50% phantom shares | | Mr. Alexander A. Hovnanian | 0.75 | 50% shares/50% phantom shares |

  64. 2024 Long-Term Incentive Program

    The Awards are reflected in the Summary Compensation Table as “Stock Awards” in fiscal 2024 even though the LTIP share portion remains subject to mandatory delayed delivery restrictions through fiscal 2028, as discussed above. Potential award payouts range from 0% to 250% of the target award depending on performance against two metrics: (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) specified levels of net debt to capital as of October 31, 2026. 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 five most recently completed consecutive fiscal quarters as of October 31, 2026 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. “Net debt to capital” shall mean the quotient resulting from (A) the result of (1) Homebuilding Debt minus (2) cash divided by (B) the result of (1) Homebuilding Debt minus (2) cash plus (3) equity from the Company’s audited financial statements as of October 31, 2026. “Homebuilding Debt” is defined as public debt plus non-recourse financing from the Company’s audited financial statements as of October 31, 2026.

  65. Achievement under the 2022 Long-Term Incentive Program

    Achievement under the 2022 Long-Term Incentive Program In fiscal 2022, the Company adopted a Long-Term Incentive Program (the “2022 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 2022 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 2022 LTIP, and their award payouts were determined based on actual performance for the full 36-month performance period and subject to holding requirements as described below. This performance period commenced on November 1, 2021 (the beginning of fiscal 2022) and ended on October 31, 2024 (that is, the performance period covered fiscal 2022, 2023 and 2024). After the performance period, 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, 2026. Like PSU and other LTIP awards, in accordance with the Committee’s intentions, the payout under the 2022 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, 2022. The following describes the target multiple of base salary and form of payout for each NEO:

  66. Achievement under the 2022 Long-Term Incentive Program

    | | Target Multiple of Base Salary | Payout Method | | Mr. Ara K. Hovnanian | 1.35 | 100% shares | | Mr. Brad G. O’Connor | 0.75 | 100% shares | | Mr. Michael P. Wyatt | 0.675 | 100% shares | | Mr. Alexander A. Hovnanian | 0.675 | 100% shares |

  67. Achievement under the 2022 Long-Term Incentive Program

    The Awards were reflected in the Summary Compensation Table as “Stock Awards” in fiscal 2022 for Mr. Ara Hovnanian and Mr. O’Connor even though they remain subject to mandatory delayed delivery restrictions through fiscal 2026, as discussed above. For purposes of the 2022 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, 2024, 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, 2024. “Homebuilding Debt” is defined as total (recourse) notes payable, including the outstanding balances at October 31, 2024 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 were interpolated on a linear basis between performance levels but were not extrapolated above the maximum performance levels listed below:

  68. Achievement under the 2022 Long-Term Incentive Program

    | Cumulative Pre-tax Profit for Fiscal 2022 Through Fiscal 2024 | Annualized Interest Incurred Based on Outstanding Homebuilding Debt at October 31, 2024 | | | | | | | | millions | $120.0 or more | $110.0 | $100.0 | $90.0 | $80.0 | $70.0 | $60.0 or less | | $775.0 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 | | $650.0 | 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 | | $525.0 | 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 | | $400.0 | 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 $400.0 | 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 |

  69. Achievement under the 2022 Long-Term Incentive Program

    For the period from fiscal 2022 through fiscal 2024, the Company achieved $1.1 billion in cumulative Pre-tax Profit, and Annualized Interest Incurred at October 31, 2024 was $98.9 million, resulting in a payout of 152.74% of the target award. OTHER EMPLOYEE BENEFITS The Company provides additional employee benefits that the Committee believes enhance executive safety, efficiency and time that the executive is able to devote to Company affairs. We do not believe that special perquisites or other personal benefits should play a major role in our executive compensation program. However, some NEOs are provided one or more of the following items: Auto allowance, including car maintenance and fuel expense; Personal use of the Company’s automobiles and of the Company’s fractional aircraft share (limited to Messrs. Hovnanian); Executive term life insurance;

  70. Golf membership or country club fee reimbursement for personal use (limited to the CEO); and

    Golf membership or country club fee reimbursement for personal use (limited to the CEO); 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 participating NEOs and certain other members of senior leadership of the Company to provide up to 6% of earnings, excluding equity and other long-term compensation, above the annual 401(k) limit for the calendar year, based on tenure. 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 2025 The Committee approved a 4% base salary increase, effective December 21, 2024, for each of Messrs. O’Connor, Wyatt and Alexander Hovnanian, in line with the Company’s ordinary course merit-based salary and cost of living increase practices. Upon his recommendation, the Committee determined not to increase Mr. Ara Hovnanian’s base salary for fiscal 2025. The Committee increased the alternative capital raises goals in the NEOs’ fiscal 2025 bonus plans to further enhance our liquidity in order to grow the Company. In addition, the Committee increased the fiscal 2025 bonus potential for Messrs. O’Connor and Alexander Hovnanian. The Committee also adopted a new Long-Term Incentive Program (the “2025 LTIP”). Each of the NEOs will be a participant in the 2025 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, 2027 and (2) net debt to capital at October 31, 2027. At the end of the performance period, 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 November 1, 2029. The performance period for the 2025 LTIP commenced on November 1, 2024 and will end on October 31, 2027. In addition, the Committee increased the target multiple of base salary for Messrs. O’Connor and Alexander Hovnanian to one times their respective base salaries in effect on January 1, 2025. 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. POLICY & PRACTICES ON GRANTING EQUITY AWARDS In conjunction with promoting high ethical standards for the distribution of equity-based incentives, the Committee has an established practice of granting PSUs, RSUs and options for all employees on a predetermined schedule, specifically the second Friday in June (other than in limited circumstances such as newly hired or promoted employees). The Committee’s practice of setting equity award grant dates on a predetermined schedule 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. The Committee does not otherwise take into account material, non-public information when determining the terms of stock awards, and the Company does not time the disclosure of material, non-public information for the purposes of affecting the value of executive compensation. During the fiscal year ended October 31, 2024, the Company did not grant stock options (or similar awards) to any NEO. 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 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. We do not include unearned performance awards and unexercised options towards the achievement of the ownership guidelines. 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:

  71. CFO: 3 times current base salary

    CFO: 3 times current base salary As of October 31, 2024, the CEO and CFO 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. INSIDER TRADING, ANTI-HEDGING AND PLEDGING POLICIES We have adopted a securities trading policy that sets forth guidelines and restrictions governing the purchase, sale or other transactions to acquire, transfer or dispose of our securities by the Company, our directors, officers, employees, family members of our directors, officers and employees and trusts, corporations and other entities controlled by such persons, that are reasonably designed to promote compliance with insider trading laws, rules and regulations and the NYSE listing standards. 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, 2024, October 31, 2023 and October 31, 2022 of Mr. Ara K. Hovnanian and Mr. Brad G. O’Connor (the Company’s NEOs for such years), and the compensation for the fiscal year ended October 31, 2024 for Mr. Michael P. Wyatt and Mr. Alexander A. Hovnanian. These four individuals compose our named executive officers (“NEOs”).

  72. CFO: 3 times current base salary

    | Name and Principal Position | Year | Salary | Bonus | Stock Awards | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation | Total | | | | ($) (1) | ($) | ($) (2) | ($) (3) | ($) (4) | ($) (5) | ($) (6) | ($) (7) | | Ara K. Hovnanian President, Chief Executive Officer and Chairman of the Board | 2024 | 1,150,442 | — | 4,286,655 | — | 7,000,000 | 76,349 | 683,004 | 13,196,450 | | | 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 | | Brad G. O’Connor Chief Financial Officer | 2024 | 604,615 | — | 1,000,008 | — | 1,050,000 | 25,395 | 85,409 | 2,765,427 | | | 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 | | Michael P. Wyatt Group President | 2024 | 588,412 | — | 545,121 | — | 5,676,461 | — | 19,007 | 6,829,001 | | Alexander A. Hovnanian Executive Vice President, National Homebuilding Operations | 2024 | 604,615 | — | 1,000,008 | — | 1,050,000 | — | 38,978 | 2,693,601 |

  73. Narrative to the Nonqualified Deferred Compensation for Fiscal 2024 Table

    Narrative to the Nonqualified Deferred Compensation for Fiscal 2024 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 2023 and 2024, 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 9.5% for calendar year 2023 and 10.0% for calendar year 2024. 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, 2024, the last day of fiscal 2024. The table does not include any payments that are described in the “Nonqualified Deferred Compensation for Fiscal 2024” table above.

  74. Narrative to the Nonqualified Deferred Compensation for Fiscal 2024 Table

    | | Voluntary Termination | | Involuntary Termination | | | Change in Control | | | | | | | | | | With Involuntary | | | | | | | | | Termination | | Named | With or | | | | | | Other Than | | Executive Officer | Without | | | | | | for Cause or | | | Good | Qualified | Without | With | Death or | Without | Termination with | | | Reason | Retirement | Cause | Cause | Disability | Termination | Good Reason | | Form of Compensation | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | Ara K. Hovnanian | | | | | | | | | Accelerated vesting of annual bonus awards (1) | — | — | — | — | — | — | — | | Accelerated vesting of equity awards (2) | — | — | — | — | — | — | 3,359,899 | | Accelerated vesting of LTIP awards (3) | — | — | — | — | — | — | 9,232,242 | | Contractual disability/death payment (4) | — | — | — | — | 10,000,000 | — | — | | Cash severance payment | — | — | — | — | — | — | — | | Accrued and unpaid vacation (5) | — | — | — | — | — | — | — | | TOTAL | — | — | — | — | 10,000,000 | — | 12,592,141 |

  75. Narrative to the Nonqualified Deferred Compensation for Fiscal 2024 Table

    | | Voluntary Termination | | Involuntary Termination | | | Change in Control | | | | | | | | | | With Involuntary | | | | | | | | | Termination | | Named | With or | | | | | | Other Than | | Executive Officer | Without | | | | | | for Cause or | | | Good | Qualified | Without | With | Death or | Without | Termination with | | | Reason | Retirement | Cause | Cause | Disability | Termination | Good Reason | | Form of Compensation | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | Brad G. O’Connor | | | | | | | | | Accelerated vesting of annual bonus awards (1) | — | — | — | — | — | — | — | | Accelerated vesting of equity awards (2) (6) | — | — | — | — | 2,433,577 | — | 3,246,178 | | Accelerated vesting of LTIP awards (3) (6) | — | — | — | — | 401,371 | — | 2,606,976 | | Contractual disability/death payment | — | — | — | — | — | — | — | | Cash severance payment (6) | — | — | — | — | — | — | 1,310,389 | | Accrued and unpaid vacation (5) | 48,594 | 48,594 | 67,055 | 48,594 | 48,594 | — | 48,594 | | TOTAL | 48,594 | 48,594 | 67,055 | 48,594 | 2,883,542 | — | 7,212,137 |

  76. Narrative to the Nonqualified Deferred Compensation for Fiscal 2024 Table

    | | Voluntary Termination | | Involuntary Termination | | | Change in Control | | | | | | | | | | With Involuntary | | | | | | | | | Termination | | Named | With or | | | | | | Other Than | | Executive Officer | Without | | | | | | for Cause or | | | Good | Qualified | Without | With | Death or | Without | Termination with | | | Reason | Retirement | Cause | Cause | Disability | Termination | Good Reason | | Form of Compensation | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | Michael P. Wyatt | | | | | | | | | Accelerated vesting of annual bonus awards (1) | — | — | — | — | — | — | — | | Accelerated vesting of equity awards (2) | — | — | — | — | 2,095,580 | — | 2,302,603 | | Accelerated vesting of LTIP awards (3) | — | — | — | — | 366,515 | — | 2,373,899 | | Contractual disability/death payment | — | — | — | — | — | — | — | | Cash severance payment | — | — | — | — | — | — | — | | Accrued and unpaid vacation (5) | 50,338 | 50,338 | 50,338 | 50,338 | 50,338 | — | 50,338 | | TOTAL | 50,338 | 50,338 | 50,338 | 50,338 | 2,512,433 | — | 4,726,840 |

  77. Narrative to the Nonqualified Deferred Compensation for Fiscal 2024 Table

    | | Voluntary Termination | | Involuntary Termination | | | Change in Control | | | | | | | | | | With Involuntary | | | | | | | | | Termination | | Named | With or | | | | | | Other Than | | Executive Officer | Without | | | | | | for Cause or | | | Good | Qualified | Without | With | Death or | Without | Termination with | | | Reason | Retirement | Cause | Cause | Disability | Termination | Good Reason | | Form of Compensation | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | Alexander A. Hovnanian | | | | | | | | | Accelerated vesting of annual bonus awards (1) | — | — | — | — | — | — | — | | Accelerated vesting of equity awards (2) | — | — | — | — | 4,993,903 | — | 5,806,503 | | Accelerated vesting of LTIP awards (3) | — | — | — | — | 254,730 | — | 2,440,266 | | Contractual disability/death payment | — | — | — | — | — | — | — | | Cash severance payment | — | — | — | — | — | — | — | | Accrued and unpaid vacation (5) | — | — | — | — | — | — | — | | TOTAL | — | — | — | — | 5,248,633 | — | 8,246,769 |

  78. Narrative to the Nonqualified Deferred Compensation for Fiscal 2024 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 2024 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 Mr. Ara Hovnanian has reached age 58, any voluntary termination of his 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 2024 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, 2024 ($176.04). 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, 2024, if any. The “Qualified Retirement” and “Change in Control – With Involuntary Termination Other Than for Cause or Termination with Good Reason” columns reflect the values for RSUs and stock options that have in-service time-based vesting dates after October 31, 2024, if any. Mr. Ara Hovnanian was retirement-eligible under his stock option agreements as of October 31, 2024. 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, 2024 which is before the end of the PSU performance period for the 2024 PSUs, no 2024 PSU values are included under the “Death or Disability” and “Qualified Retirement” columns and the 2024 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. 2024 LTIP: Except in the case of death, disability, a qualified retirement or a qualifying termination in the case of a change in control, 2024 LTIP participants who terminate prior to the end of the performance period (October 31, 2026) forfeit all of their 2024 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 2026 and October 2028, 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, 2024 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. 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, 2024 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. 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, 2024, Mr. Ara Hovnanian was “retirement eligible” under his 2021 LTIP agreement, and his 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, 2024 ($176.04). (4)

  79. Narrative to the Nonqualified Deferred Compensation for Fiscal 2024 Table

    Contractual disability and death payment. The Company has an agreement with Mr. Ara 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) Accrued and unpaid vacation. Represents accrued but unpaid vacation payable upon termination. Messrs. Hovnanian do not accrue vacation. 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.

  80. Narrative to the Nonqualified Deferred Compensation for Fiscal 2024 Table

    | 7. | PAY RATIO DISCLOSURE |

  81. Narrative to the Nonqualified Deferred Compensation for Fiscal 2024 Table

    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. Ara Hovnanian, our President, Chief Executive Officer and Chairman of the Board. For fiscal year 2024, The median of the annual total compensation of all of our employees, other than Mr. Hovnanian, was $116,316;

  82. Identification of Median Employee

    | 8. | PAY VERSUS PERFORMANCE |

  83. Identification of Median Employee

    | | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Fiscal Year (1) | SCT Total Compensation for CEO | Compensation Actually Paid (2) to CEO | Average SCT Total Compensation for Other NEOs | Average Compensation Actually Paid (2) to Other NEOs | Cumulative TSR | Cumulative Peer Group TSR (3) | Net Income | Relative EBIT Return on Investment Rank vs. Peer Group (4) | | 2024 | $13,196,450 | $48,275,823 | $4,096,010 | $8,113,013 | $554.28 | $238.31 | $242,000,000 | Rank 1 of 10 | | 2023 | $9,482,398 | $25,775,449 | $3,698,952 | $7,602,823 | $218.77 | $147.84 | $205,900,000 | Rank 1 of 10 | | 2022 | $16,509,497 | $6,487,161 | $4,951,393 | $1,554,549 | $126.98 | $98.87 | $225,500,000 | Rank 1 of 10 | | 2021 | $12,478,182 | $38,816,881 | $3,891,574 | $11,054,990 | $265.30 | $138.49 | $607,800,000(5) | Rank 4 of 10 |

  84. Compensation Actually Paid and TSR

    Compensation Actually Paid and TSR

  85. Compensation Actually Paid and Net Income

    Compensation Actually Paid and Net Income

  86. Compensation Actually Paid and EBIT ROI Rank

    Compensation Actually Paid and EBIT ROI Rank COMPANY’S MOST IMPORTANT FINANCIAL PERFORMANCE MEASURES The following are the most important financial performance measures (shown in alphabetical order), as determined by the Company, that link compensation actually paid to our CEO and other NEOs to the Company’s performance for the most recently completed fiscal year.

  87. Liquidity

    | Name | Fees Earned or Paid in Cash ($) (1) | Stock Awards ($) (2) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (3) | All Other Compensation ($) (4) | Total ($) | | Robert B. Coutts | 177,000 | 104,971 | — | — | — | 15,000 | 296,971 | | Miriam Hernandez-Kakol | 177,000 | 104,971 | — | — | — | 15,000 | 296,971 | | Edward A. Kangas | 272,000 | 119,984 | — | — | — | 15,000 | 406,984 | | Joseph A. Marengi | 222,000 | 119,984 | — | — | — | 15,000 | 356,984 | | Vincent Pagano | 174,500 | 104,971 | — | — | — | 15,000 | 294,471 | | Robin Stone Sellers | 174,500 | 104,971 | — | — | — | 15,000 | 294,471 | | J. Larry Sorsby | 187,000 | 89,958 | — | — | 51,727 | 15,374 | 344,059 |