Our equity-based compensation plans provide for the granting of Options and RSUs to key management employees, including executive officers and members of our Board of Directors ("Directors"). The exercise price of Options granted is equal to the closing price of our common stock on the New York Stock Exchange (the “NYSE”) on the day prior to the date of grant, and Options are granted with a 10-year term. Both Option and RSU grants typically vest in separate tranches over periods of 3 to 6 years. Grants to key management employees are generally divided such that vesting for 50% of the grant is contingent solely on continued employment, while vesting for the remaining 50% of the grant is contingent upon both continued employment and the achievement of a performance metric based on our return on capital performance relative to a peer group during a three year period specified on the date of grant. Grants to Directors vest solely based on continued service as a Director.

During the second quarter of 2026, we issued 44,318 Options and 5,486 RSUs to key management employees and Directors, substantially all of which vest on December 31, 2028. Total Option and RSU grants for the six month period ended June 30, 2026 totaled 47,060 and 5,918, respectively, and were granted under the NVR, Inc. 2018 Equity Incentive Plan (the "2018 Plan") as follows:


Options Granted						2018 Plan
Options - service-only						24,300
Options - performance-based						22,760
Total Options Granted						47,060
RSUs Granted
RSUs - service-only						2,994
RSUs - performance-based						2,924
Total RSUs Granted						5,918


	Shares	Weighted Avg. Per Share Exercise Price		Weighted Avg. Remaining Contract Life (years)	Aggregate Intrinsic Value
Stock Options
Outstanding at December 31, 2025	333,292	$	3,880.52
Granted	47,060	$	5,833.82
Exercised	(16,441)	$	3,453.78
Forfeited	(1,422)	$	5,194.85
Outstanding at June 30, 2026	362,489	$	4,148.31	4.9	$	972,763
Exercisable at June 30, 2026	214,575	$	3,495.82	3.2	$	711,871

RSUs
Outstanding at December 31, 2025	16,913
Granted	5,918
Vested	(7,221)
Forfeited	(204)
Outstanding at June 30, 2026	15,406				$	104,967
Vested, but not issued at June 30, 2026	—				—

To estimate the grant-date fair value of our Options, we use the Black-Scholes option-pricing model (the “Pricing Model”). The Pricing Model estimates the per share fair value of an Option on its date of grant based on the following factors: the Option’s exercise price; the price of the underlying stock on the date of grant; the estimated dividend yield; a risk-free interest rate; the estimated Option term; and the expected volatility. For the risk-free interest rate, we use U.S. Treasury STRIPS which mature at approximately the same time as the Option’s expected holding term. For the estimated option life, the assumption is based on the Company's historical Option exercise experience, giving consideration to the contractual term, vesting provisions, and expected employee exercise behavior. For expected volatility, we have concluded that our historical volatility over the Option’s expected holding term provides the most reasonable basis for this estimate.


Estimated option life (range)	3.89 - 6.69
Risk free interest rate (range)	3.82% - 4.14%
Expected volatility (range)	24.10% - 28.75%
Expected dividend rate	—%
Weighted average grant-date fair value per share of options granted	$	1,564.21

Compensation cost for Options and RSUs is recognized on a straight-line basis over the requisite service period for the entire award (from the date of grant through the period of the last separately vesting portion of the grant). For the recognition of equity-based compensation, the Options and RSUs which are subject to a performance condition are treated as a separate award from the “service-only” Options and RSUs, and compensation cost is recognized when it becomes probable that the stated performance target will be achieved. We currently believe that it is probable that the stated performance condition will be satisfied at the target level for all of our performance-based Options and RSUs granted. Compensation cost is recognized within the income statement in the same expense line as the cash compensation paid to the respective employees.

We recognize forfeitures of equity-based awards as a reduction to compensation costs in the period in which they occur. During the three and six month periods ended June 30, 2026, we recognized $19,293 and $32,580 in equity-based compensation costs, respectively. During the three and six month periods ended June 30, 2025, we recognized $17,813 and $36,339 in equity-based compensation costs, respectively.

As of June 30, 2026, the total unrecognized compensation cost for all outstanding Options and RSUs equaled approximately $206,333. The unrecognized compensation cost will be recognized over each grant’s applicable vesting period with the latest vesting date being December 31, 2031. The weighted-average period over which the unrecognized compensation cost will be recorded is equal to approximately 2.0 years.