Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made effective as of the 14th
day of March, 2005 (the “Effective Date”) by and between BEAZER HOMES USA, INC.,
a Delaware corporation (the “Company”), and Kenneth J. Gary, an individual
resident of the State of Georgia (“Executive”).

 

WITNESSETH:

 

WHEREAS, the Company wishes to employ the Executive, and the Executive wishes to
accept employment with the Company, on the terms and conditions set forth
herein.

 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained, the Company and Executive hereby agree as follows:

 

1.             Employment and Duties.

 

(a)           The Company hereby agrees to employ Executive for the Term (as
hereinafter defined) as its Executive Vice President, General Counsel and
Corporate Secretary. If requested by the Board of Directors of the Company (the
“Board”), Executive shall also serve on the Board without additional
compensation.  Executive shall also serve, if requested by the Board, as an
executive officer and/or director of any subsidiaries and/or affiliated
companies and shall comply with the policy of the Compensation Committee of the
Board (the “Compensation Committee”) with regard to retention or forfeiture of
any director’s fees. As used in this Agreement, the term “affiliated companies”
shall include any company controlled by, controlling or under common control
with the Company.

 

(b)           The Executive shall have such management and oversight
responsibilities and authority as are necessary to efficiently administer the
affairs of the Company and as are customary of an Executive Vice President,
General Counsel and Corporate Secretary.  All powers herein granted to the
Executive are subject to supervisory approval of the Board and of the President
and Chief Executive Officer of the Company (the “CEO”), and the Executive may be
given such further reasonably related supervisory duties, powers and
prerogatives as may be delegated to him from time to time by said Board and/or
the CEO.  The Executive shall report exclusively to the CEO and the Board and
further shall render such advice to the CEO and Board as said CEO and/or Board
may from time to time request.

 

(c)           During the Term, and excluding any periods of vacation and sick
leave to which the Executive is entitled, Executive shall devote substantially
all of his business time and efforts to the business and affairs of the Company
and, to the extent necessary to discharge the responsibilities assigned to the
Executive hereunder, use the Executive’s reasonable best efforts to perform
faithfully such responsibilities. In performing such duties hereunder, Executive
shall comply with the policies and procedures as adopted from time to time by
the Board, shall give the Company the benefit of his special knowledge, skills,
contacts and business experience, shall perform his duties and carry out his
responsibilities hereunder in a diligent manner.

 

(d)           During the Employment Term, it shall not be a violation of this
Agreement for the Executive to (i) with the prior approval of the Board in each
case, serve on corporate, civic or charitable boards or committees, (ii) with
the prior approval of the Board in each case, deliver lectures, fulfill speaking
engagements or teach at educational institutions, and (iii) manage personal
investments, so long as such activities do not significantly interfere or
constitute a conflict of interest with the performance of the Executive’s
responsibilities as an employee of the Company in accordance with this
Agreement.

 

(e)           The principal location for performance of Executive’s services
hereunder shall be at the offices of Beazer Homes USA, Inc. in Atlanta, Georgia,
subject to reasonable travel

 

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requirements during the course of such performance. Executive shall not be
required, without his consent, to regularly report to any office of the Company
which is located more than thirty-five (35) miles from the Company’s current
office location, provided Executive will be expected to travel to the extent
reasonably necessary to fulfill his responsibilities.

 

2.             Employment Term.   The term of Executive’s employment hereunder
(the “Term”) shall commence effective as of the date hereof and shall end on
March 13, 2007, unless sooner terminated as provided herein; provided, however;
that the Term shall automatically be extended for successive one year periods
unless: (i) this Agreement is terminated as otherwise provided herein; or (ii)
Executive or the Company provides written notice to the other of such party’s
desire not to extend the Term at least sixty (60) days prior to the scheduled
expiration of the Term as then in effect.

 

3.             Compensation and Benefits

 

(a)           Base Salary.  During the Term, the Executive shall receive an
annual base salary (“Annual Base Salary”) in the amount of $375,000, payable in
accordance with the Company’s normal payroll practices (but not less frequently
than monthly). During the Term, the Annual Base Salary shall be reviewed by the
Compensation Committee (for purposes of increase only) at least annually. Any
increase in Annual Base Salary shall not serve to limit or reduce any other
obligation to the Executive under this Agreement. Annual Base Salary shall not
be reduced after any such increase and the term Annual Base Salary as utilized
in this Agreement shall refer to Annual Base Salary as so increased.
Notwithstanding anything contained herein to the contrary, in the event that the
Company shall implement a Company-wide reduction in executive base compensation,
then, solely for such purpose and only during the continuation of such
Company-wide reduction, the Company shall have the right to reduce the Annual
Base Salary then payable hereunder in a manner that is consistent with said
Company-wide reduction.

 

(b)           Bonuses; Stock Incentive Plans. Executive will be eligible to and
shall participate in the Company’s bonus and stock incentive plans at the
discretion of the Compensation Committee of the Board. The amount and terms of,
and the targets, conditions and restrictions applicable to each bonus or other
incentive award shall be subject to the provisions of any such plan and of the
applicable award letter duly executed and delivered by the Company.

 

(c)           Incentive, Savings and Retirement Plans. During the Term, the
Executive shall be entitled to participate in all incentive, savings and
retirement plans, practices, policies and programs applicable generally to other
most senior executives of the Company and its affiliated companies.

 

(d)           Welfare Benefit Plans. During the Term, the Executive and/or the
Executive’s family, as the case may be, shall be eligible for participation in
and shall receive all benefits under welfare benefit plans, practices, policies
and programs provided by the Company and its affiliated companies (including,
without limitation, medical, prescription, dental, disability, employee life,
group life, accidental death and travel accident insurance plans and programs)
to the extent applicable generally to other most senior executives of the
Company and its affiliated companies.

 

(e)           Expenses. The Company will pay or reimburse Executive for all
reasonable and necessary out-of-pocket expenses incurred by him in the
performance of his duties under this Agreement. Executive shall keep detailed
and accurate records of expenses incurred in connection with the performance of
his duties hereunder and reimbursement therefore shall be in accordance with
policies and procedures to be established from time to time by the Board.

 

(f)            Office and Support Staff.  During the Term, the Executive shall
be entitled to an office or offices of a size and with furnishings and other
appointments, and to secretarial and other assistance, consistent with the
Executive’s position and title.

 

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(g)           Vacation.  During the Term, Executive shall be entitled to twenty
(20) working days of compensated vacation in each fiscal year, to be taken at
times which do not unreasonably interfere with the performance of Executive’s
duties hereunder. Any unused vacation time from any fiscal year shall be subject
to accumulation or forfeiture in accordance with Company policy as in effect
from time to time.

 

4.             Termination of Employment.

 

(a)           Death or Disability. The Executive’s employment shall terminate
automatically upon the Executive’s death during the Term. If the Disability of
the Executive occurs during the Term (pursuant to the definition of Disability
set forth below), the Company may give to the Executive written notice in
accordance with Section 10(c) of this Agreement of its intention to terminate
the Executive’s employment. In such event, the Executive’s employment with the
Company shall terminate effective on the 30th day after receipt of such notice
by the Executive (the “Disability Effective Date”), provided that, within the 30
days after such receipt, the Executive shall not have returned to full-time
performance of the Executive’s duties. For purposes of this Agreement,
“Disability” shall mean the absence of the Executive from the Executive’s duties
with the Company on a full-time basis for 120 consecutive business days as a
result of incapacity due to mental or physical illness which is determined to be
total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive’s legal representative.

 

(b)           Cause. The Company may terminate the Executive’s employment for
Cause. For purposes of this Agreement, “Cause” shall mean:

 

(i)            any act or failure to act by Executive done with the intent to
harm in any material respect the financial interests or reputation of the
Company or any affiliated companies;

 

(ii)           Executive being convicted of (or entering a plea of guilty or
nolo contendere to) a felony (other than a felony involving a motor vehicle);

 

(iii)          Executive’s dishonesty, misappropriation or fraud with regard to
the Company or any affiliated companies (other than good faith expense account
disputes);

 

(iv)          a grossly negligent act or failure to act by Executive which has a
material adverse affect on the Company or any affiliated companies;

 

(v)           the material breach by Executive of his agreements or obligations
under this Agreement which has a material adverse effect on the Company, which
breach, if curable, is not cured by Executive within fifteen (15) days after
written notice from the Company which specifically identifies the material
breach which the Company believes that Executive has committed; or

 

(vi)          the continued refusal to follow the directives of the CEO or the
Board or their designees which are consistent with Executive’s duties and
responsibilities identified in Section 1 hereof; provided that the foregoing
refusal shall not be “cause” if Executive in good faith believes that such
direction is illegal, unethical or immoral and promptly so notifies the CEO or
Board, as the case may be, in writing.

 

(c)           Notice of Termination.  Any termination by the Company for Cause
shall be communicated by Notice of Termination to the Executive given in
accordance with Section 10(c)

 

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of this Agreement. For purposes of this Agreement, a “Notice of Termination”
means a written notice which (i) indicates the specific termination provision in
this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated and
(iii) if the Date of Termination (as defined below) is other than the date of
receipt of such notice, specifies the termination date (which date shall be not
more than thirty days after the giving of such notice). The failure by the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Cause shall not waive any right of the Company
hereunder or preclude the Company from asserting such fact or circumstance in
enforcing the Company’s rights hereunder.

 

(d)           Date of Termination. “Date of Termination” means (i) if the
Executive’s employment is terminated by the Company for Cause, the date of
receipt of the Notice of Termination or, subject to applicable cure periods, any
later date specified therein, as the case may be, (ii) if the Executive’s
employment is terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notifies the
Executive of such termination and (iii) if the Executive’s employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of death of the Executive or the Disability Effective Date, as the case
may be.

 

6.             Obligations of the Company upon Termination.

 

(a)           Other Than for Cause. If, during the Term, the Company shall
terminate the Executive’s employment other than for Cause:

 

(i)            the Company shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the following
amounts: (1) the Executive’s Annual Base Salary through the Date of Termination
to the extent not theretofore paid, (2)  any accrued but unpaid annual bonus
(“Annual Bonus”) respecting any completed fiscal year ending prior to the Date
of Termination, (3) the product of (x) the Average Annual Bonus (hereinafter
defined) and (y) a fraction, the numerator of which is the number of days in the
current fiscal year through the Date of Termination, and the denominator of
which is 365 and (4) any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon) and any accrued
vacation pay, in each case to the extent not theretofore paid (the sum of the
amounts described in clauses (1), (2), (3) and (4) shall be hereinafter referred
to as the “Accrued Obligations”). The timing of payment by the Company of any
deferred compensation shall remain subject to any payment election previously
made by the Executive.  The term “Average Annual Bonus” shall mean the
arithmetic average of the Executive’s bonuses (whether paid or deferred) under
the Company’s annual incentive plans during the last three full fiscal years
prior to the Date of Termination or for such lesser period as the Executive has
been employed by the Company (annualized in the event that the Executive was not
employed by the Company for the whole of any such fiscal year).  Without
limiting the generality of the foregoing definition, the “Average Annual Bonus”
shall include the following components, if any, pursuant to the Company’s EVCIP
Rules (or any successor incentive plan, for so long as any of same shall exist):

 

(a)   Cash payouts from VC and IVC awards and the “Bank” payout, subject to the
Payout Cap, all at full face value;

 

(b)   Any excess in the Bank discounted at 75% of face value (which shall, for
purposes hereof, be deemed to be fully vested);

 

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(c)   10% of the Bank contributed to the Deferred Compensation Plan, at full
face value (which shall, for purposes hereof, be deemed to be fully vested); and

 

(d)   Any deferred bonus under the EVCIP which is invested in stock under the
Company’s Corporate Management Stock Purchase Program, at full face value of
said bonus (which shall, for purposes hereof, be deemed to be fully vested);

 

(i)            so long as the Executive is and remains in compliance in all
material respects with his obligations under Section 7 below, the Company shall
pay to the Executive an amount equal to the sum of (1) Executive’s Annual Base
Salary (at the rate in effect on the Date of Termination), and (2) the Average
Annual Bonus for a period of two years from the Date of Termination, (the
“Severance Period”), at the same time that payments of Annual Base Salary would
otherwise have become due and payable during said period in the absence of such
termination;

 

(iii)          so long as the Executive is and remains in compliance in all
material respects with his obligations under Section 7 below, during the
Severance Period, or such longer period as may be provided by the terms of the
appropriate plan, program, practice or policy, the Company shall continue
benefits to the Executive and/or the Executive’s family at least equal to those
which would have been provided to them in accordance with the plans, programs,
practices and policies described in Section 3(d) of this Agreement if the
Executive’s employment had not been terminated, provided, however, that if the
Executive becomes reemployed with another employer and receives medical or other
welfare benefits under another employer provided plan, the medical and other
welfare benefits described herein shall cease; and

 

(iv)          to the extent not theretofore paid or provided, the Company shall
timely pay or provide to the Executive any other amounts or benefits required to
be paid or provided or which the Executive is eligible to receive under any
plan, program, policy or practice or contract or agreement of the Company and
its affiliated companies (such other amounts and benefits shall be hereinafter
referred to as the “Other Benefits”).

 

(b)           Death. If the Executive’s employment is terminated by reason of
the Executive’s death, this Agreement shall terminate without further
obligations to the Executive’s legal representatives under this Agreement, other
than for payment of Accrued Obligations and the timely payment or provision of
Other Benefits. Accrued Obligations shall be paid to the Executive’s estate or
beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of
Termination.

 

(c)           Disability. If the Executive’s employment is terminated by reason
of the Executive’s Disability, this Agreement shall terminate without further
obligations to the Executive, other than for payment of Accrued Obligations and
the timely payment or provision of Other Benefits. Accrued Obligations shall be
paid to the Executive or the Executive’s legal representative in a lump sum in
cash within 30 days of the Date of Termination.

 

(d)           Cause. If the Executive’s employment shall be terminated for
Cause, this Agreement shall terminate without further obligations to the
Executive other than the obligation to pay to the Executive (x) his Annual Base
Salary through the Date of Termination, (y) the amount of any compensation
previously deferred by the Executive, and (z) Other Benefits, in each case to
the extent theretofore unpaid. If the Executive voluntarily terminates
employment during the

 

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Term, this Agreement shall terminate without further obligations to the
Executive, other than for Accrued Obligations and the timely payment or
provision of Other Benefits. In such case, all Accrued Obligations shall be paid
to the Executive in a lump sum in cash within 30 days of the Date of
Termination.

 

(e)           Election Not to Extend.  In the event that the Company elects,
pursuant to Section 2 above, not to extend the Term, then, such election shall
be treated for all purposes hereof the same as the termination by the Company of
Executive’s employment for other than Cause, and, in such case, commencing upon
the date of the expiration of the Term, Executive shall be entitled to receive
from the Company the same payments and benefits as Executive would be entitled
to receive pursuant to Section 6(a) above; provided, however, and
notwithstanding anything contained in Section 6(a) above to the contrary, in
connection with an election by the Company not to renew the Term, the applicable
“Severance Period” shall not extend beyond the date that the Executive reaches
the age of sixty-five (65).

 

7.             Employment Covenants.

 

(a)           Covenant Not to Compete. Executive recognizes and acknowledges
that the Company is placing its confidence and trust in Executive. Executive,
therefore, covenants and agrees that during the Applicable Non-Compete Period
(as defined below) Executive shall not, either directly or indirectly, without
the prior written consent of the Board (which may be withheld in the sole and
absolute discretion of the Board):

 

(i)            Engage in or carry on any business or in any way become
associated with any business in the Restricted Area (as hereinafter defined)
which is similar to or is in competition with the Business of the Company (as
hereinafter defined). As used in this Section 7(a), the term (1) “Business of
the Company” shall mean and include all business activities in which the Company
and/or any affiliated companies have engaged (or have prepared written plans to
engage) at any time during the Term, including but not limited to, the purchase
of land (or options therefor) for development and the construction of
residential homes for resale to consumers, and (2) “Restricted Area” shall mean
and include anywhere in the United States of America or in any foreign country
in which the Company or any affiliated companies then engage (or have within the
preceding three years engaged) in business;

 

(ii)           in connection with any business which is similar to or is in
competition with the Business of the Company in the Restricted Area, solicit the
business of any person or entity, on behalf of himself or any other person or
entity, which is or has been at any time during the Term a customer or supplier
of the Company including, but not limited to, former or present customers or
suppliers with whom Executive has had personal contact during, or by reason of,
his relationship with the Company;

 

(iii)          Be or become an employee, agent, consultant, representative,
director or officer of, or be otherwise in any manner associated with, any
person, firm, corporation, association or other entity which is engaged in or is
carrying on any business which is similar to or in competition with the Business
of the Company in the Restricted Area;

 

(iv)          Solicit for employment or employ any person employed by the
Company at any time during the twelve (12) month period immediately preceding
such solicitation or employment; or

 

(v)           Be or become a shareholder, joint venturer, owner (in whole or in
part), or partner, or be or become associated with or have any proprietary or
financial

 

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interest in or of any firm, corporation, association or other entity which is
engaged in or is carrying on any business which is similar to or in competition
with the Business of the Company in the Restricted Area. Notwithstanding the
preceding sentence, passive equity investments by Executive of $25,000 or less
in any entity or affiliated group of any entity which is engaged in or is
carrying on any business which is similar to or in competition with the Business
of the Company shall not be deemed to violate this Section 7(a).

 

For purposes of identifying the Restricted Area, Executive hereby recognizes and
acknowledges that the existing Business of the Company currently extends
throughout the States of Georgia, Tennessee, South Carolina, North Carolina,
California, Arizona, Nevada, Florida, New Jersey, Delaware, Maryland, Virginia,
West Virginia, Texas, New York, Colorado, Mississippi, Indiana, Kentucky, Ohio,
Pennsylvania, Washington, D.C., West Virginia and New Mexico.  Executive further
warrants and represents that, because of his varied skill and abilities, he does
not need to compete with the Business of the Company and that this Agreement
will not prevent him from earning a livelihood and acknowledges that the
restrictions contained in this Section 7 constitute reasonable protections for
the Company.

 

As used in this Section 7, “Applicable Non-Compete Period” shall mean the
following:

 

(A)          at all times that the Executive is employed by the Company; and

 

(B)           for a period of time after the Executive’s employment under this
Agreement is terminated for any reason equal to the greater of

 

(i)            180 days; or

 

   (ii)           such longer period of time that the Executive is entitled to
receive payments under Sections 6(a)(ii) or (iii) above.

 

(b)           Confidential Information. Executive agrees that all Confidential
Information shall be the sole property of the Company, and Executive agrees that
he shall not during the Term nor thereafter, use for his benefit or the benefit
of others or disclose at any time Confidential Information or take with him upon
termination of this Agreement any records, papers, reports, lists, computer
tapes or disks or any other materials of any nature that contain any
Confidential Information.  “Confidential Information” shall mean all information
other than General Knowledge (defined below) relating to the Company’s: (i)
business or existing projects including all those in various stages of research
and development including all unpublished plans for new products or services;
(ii) financial information, internal business procedures and other information
which relate to the way the Company conducts its business and which are not
publicly available; (iii) data written by the Company’s employees or others,
including source codes, object codes, marketing and development plans, budgets,
forecasts, forecast assumptions and future plans and potential strategies of the
Company which have been or are being discussed; (iv) unpublished pricing data;
(v) identity, buying habits and practices of the Company, its suppliers and
customers to the extent not publicly available; (vi) information regarding the
skills or compensation of employees of the Company; (vii) the Intellectual
Property of the Company and any information pertaining thereto; (viii) materials
and information supplied by customers or clients to the Company that contain
data regarding any research, products, procedures or the like; and (ix) any
other information deemed confidential by the Company by marking such information
with the word “Confidential” or similar word; by orally advising the Executive
that the information is confidential or by treating the information in such a
manner that the Executive should reasonably believe it to be deemed confidential
by the Company.  “General Knowledge” shall mean (i) general skills or experience
gained during Executive’s employment with, consultation for or work for the
Company; and (ii) information and data publicly available.

 

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(c)           Records. All files, records, memoranda and other documents
regarding former, existing or prospective customers of the Company or relating
in any manner whatsoever to Confidential Information or the Business of the
Company (collectively, “Records”), whether prepared by Executive or otherwise
coming into his possession, shall be the exclusive property of the Company. All
Records shall be immediately placed in the physical possession of the Company
upon the termination of Executive’s employment with the Company, or at any other
time specified by the Board. The retention and use by Executive of duplicates in
any form of Records is prohibited after the termination of Executive’s
employment with the Company.

 

(d)           Breach. Executive hereby recognizes and acknowledges that
irreparable injury or damage shall result to the Company in the event of a
breach or threatened breach by Executive of any of the terms or provisions of
this Section 7, and Executive therefore agrees that the Company shall be
entitled to an injunction restraining Executive from engaging in any activity
constituting such breach or threatened breach. Nothing contained herein shall be
construed as prohibiting the Company from pursuing any other remedies available
to the Company at law or in equity for such breach or threatened breach,
including but not limited to, the recovery of damages from Executive and, if
Executive is an employee of the Company, the termination of his employment with
the Company in accordance with the terms and provisions of this Agreement.

 

(e)           Survival.  Notwithstanding the termination of the employment of
Executive or the termination of this Agreement, the provisions of this Section 7
shall survive and be binding upon Executive unless a written agreement which
specifically refers to the termination of the obligations and covenants of this
Section 7 is executed by the Company.  Notwithstanding the foregoing, this
Section 7 shall not survive the termination of this Agreement as the result of
the Change Of Control Agreement (hereinafter defined) becoming effective.

 

(F)            BLUE-PENCILING. SHOULD ANY COURT OR OTHER LEGALLY CONSTITUTED
AUTHORITY DETERMINE THAT FOR ANY SUCH AGREEMENT OR COVENANT TO BE EFFECTIVE IT
MUST BE MODIFIED TO LIMIT ITS DURATION OR SCOPE, THE PARTIES HERETO SHALL
CONSIDER SUCH AGREEMENT OR COVENANT TO BE AMENDED OR MODIFIED WITH RESPECT TO
DURATION AND/OR SCOPE SO AS TO COMPLY WITH THE ORDERS OF ANY SUCH COURT OR OTHER
LEGALLY CONSTITUTED AUTHORITY, AND AS TO ALL OTHER PORTIONS OF SUCH AGREEMENT OR
COVENANTS THEY SHALL REMAIN IN FULL FORCE AND EFFECT AS ORIGINALLY WRITTEN.

 

8.             NO MITIGATION. IN NO EVENT SHALL THE EXECUTIVE BE OBLIGATED TO
SEEK OTHER EMPLOYMENT OR TAKE ANY OTHER ACTION BY WAY OF MITIGATION OF THE
AMOUNTS PAYABLE TO THE EXECUTIVE UNDER ANY OF THE PROVISIONS OF THIS AGREEMENT
AND SUCH AMOUNTS SHALL NOT BE REDUCED WHETHER OR NOT THE EXECUTIVE OBTAINS OTHER
EMPLOYMENT. THE COMPANY AGREES TO PAY AS INCURRED, TO THE FULL EXTENT PERMITTED
BY LAW, ALL LEGAL FEES AND EXPENSES WHICH THE EXECUTIVE MAY REASONABLY INCUR AS
A RESULT OF ANY CONTEST BY (I) THE COMPANY, PROVIDED THAT THE EXECUTIVE PREVAILS
IN AT LEAST ONE MATERIAL ISSUE, (II) THE EXECUTIVE OR (III) OTHERS, OF THE
VALIDITY OR ENFORCEABILITY OF, OR LIABILITY UNDER, ANY PROVISION OF THIS
AGREEMENT OR ANY GUARANTEE OF PERFORMANCE THEREOF (INCLUDING, WITHOUT
LIMITATION, AS A RESULT OF ANY CONTEST BY THE EXECUTIVE ABOUT THE AMOUNT OF ANY
PAYMENT PURSUANT TO THIS AGREEMENT), PLUS IN EACH CASE INTEREST ON ANY DELAYED
PAYMENT AT THE APPLICABLE FEDERAL RATE PROVIDED FOR IN SECTION 7872(F) (2) (A)
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”).

 

9.             Successors.

 

(a)           This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive’s legal
representatives.

 

(b)           This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.

 

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10.           Miscellaneous.

 

(a)           This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without reference to principles of
conflict of laws. Any legal action, suit or proceeding arising out of or
relating to this Agreement shall be instituted in the state or federal courts in
the State of Delaware and the parties agree not to assert, in any action, suit
or proceeding by way of motion, as a defense or otherwise, any claim that either
party is not personally subject to the jurisdiction of such court, or that such
action, suit or proceeding is brought in an inconvenient forum, or that the
venue is improper or that the subject matter hereof cannot be enforced in such
court.  The parties hereby irrevocably submit to the jurisdiction of any such
court in any such action, suit or proceeding and agree that service of all
process in any such action, suit or proceeding in any such court may be made by
registered or certified mail, return receipt requested, to its address set forth
in this Agreement, such service being hereby acknowledged by such party to be
sufficient for personal jurisdiction in any action against such party in any
such court and to be otherwise effective and binding service in every respect.

 

(b)           The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.

 

(c)           All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party, by UPS or other
commercial overnight courier or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:

 

If to the Executive:

 

1000 Abernathy Road

Suite 1200

Atlanta, Georgia 30328

 

If to the Company:

 

1000 Abernathy Road

Suite 1200

Atlanta, Georgia 30328

Attention: President and Chief Executive Officer

 

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

 

(d)           The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

 

(e)           The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.

 

(f)            The Company’s failure to insist upon strict compliance with any
provision of this Agreement or the failure to assert any right the Company may
have hereunder shall not be deemed to be a waiver of such provision or right or
any other provision or right of this Agreement.

 

(g)           This Agreement supersedes any and all other prior or
contemporaneous agreements, either oral or in writing, between the parties
hereto with respect to the subject matter hereof, and this Agreement contains
all of the covenants and agreements between the parties with respect to
employment of Executive by the Company.

 

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Reference is hereby made to that certain Employment Agreement dated as of March
14, 2005 (the “Change of Control Agreement”) by and between the Company and the
Executive.  Notwithstanding anything contained herein to the contrary, (i) this
Agreement shall not supersede the Change of Control Agreement, and (ii) upon the
“Effective Date” occurring under the Change of Control Agreement, this Agreement
shall be superseded by the Change of Control Agreement.

 

(h)           This Agreement may be executed via facsimile transmission
signature and in counterparts, each of which shall be deemed to be an original
but all of which together will constitute one and the same instrument.

 

IN WITNESS WHEREOF, the parties hereto have executed this EMPLOYMENT AGREEMENT
effective as of the date first written above.

 

 

 

BEAZER HOMES USA, INC.

 

 

 

 

 

By:

 /s/ Ian J. McCarthy

 

 

Name: Ian J. McCarthy

 

Title: President and Chief Executive Officer

 

 

 

EXECUTIVE

 

 

 

 

 

/s/ Kenneth J. Gary

 

 

Kenneth J. Gary

 

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