EXHIBIT 10.4

 

[ORLEANS HOMEBUILDERS, INC. LETTERHEAD]

 

Garry P. Herdler
c/o 3333 Street Road, Suite 101

Bensalem, PA 19020

 

Re:          Orleans Homebuilders, Inc. Restricted Stock

 

Dear Garry:

 

As you know, Orleans Homebuilders, Inc. (the “Company”) granted to you 240,000
shares of restricted stock pursuant to a Restricted Stock Award dated
December 6, 2007 (the “Restricted Stock”). The Restricted Stock is being issued
pursuant to Registration Statement No. 333-119004 on Form S-8 which registered
400,000 shares of the Company’s Common Stock issuable under the Plan.  At the
time the grant was made, the Company’s Compensation Committee also determined
that the Company should pay to you a tax gross-up with respect to income taxes
payable by you as a result of the vesting of the Restricted Stock.

 

The purpose of this letter is to confirm to you that, from time to time as of
the date any amounts are required to be taken into account as income to you for
income tax purposes by reason of the vesting of the Restricted Stock, the
Company will pay to you an additional cash payment (a “Gross-Up Payment”)
sufficient to pay all of your federal, state and local income taxes on such
income taken into account by reason of the vesting of the Restricted Stock from
time to time and on the Gross-Up Payment itself. For purposes of calculating the
amounts payable by the Company hereunder, with respect to income taxes to which
you are subject, you shall be deemed to pay income taxes at the highest
applicable marginal rate of federal, state or local income taxation for the
calendar year in which the payments are made regardless of the amount of taxes
actually paid. To implement the foregoing, with respect to the vesting of each
tranche of Restricted Stock, the Company shall pay to the appropriate federal,
state and/or local taxing authorities, on your behalf, all amounts required
under applicable laws and/or regulations to be withheld and paid over by the
Company with respect to federal, state and/or local tax liabilities no later
than the earlier of (i) the last business day of the calendar year in which the
applicable tranche vested and (ii) 30 days after the applicable tranche has
vested. The amounts so paid shall in general be considered to be a payment of
all or a portion of your Gross-Up Payments. Within 60 days after the vesting of
the applicable tranche giving rise to the Company’s obligation to make the
Gross-Up Payment, the Company shall pay to you any portion of a Gross-Up Payment
to which you may be entitled that was not paid as tax withholding.

 

If you should have any questions about this letter, please do not hesitate to
contact me.

 

 

Sincerely,

 

 

 

BENJAMIN D. GOLDMAN

 

 

 

 

Benjamin D. Goldman

 

Agreed to and acknowledged:

 

GARRY P. HERDLER

 

Garry P. Herdler

 

--------------------------------------------------------------------------------