Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT, made as of this 6th day of August, 2009, and
effective as of August 1, 2009 (the “Effective Date”), is between Orleans
Homebuilders, Inc., a Delaware corporation with offices at 3333 Street Road,
Bensalem, Pennsylvania 19020 (hereinafter the “Company”) and Thomas R. Vesey, an
individual (hereinafter the “Employee”).

 

BACKGROUND

 

Employee has been employed by the Company on an “at-will” basis as Executive
Vice President — Southern Region, and Employee and the Company desire that
Employee continue working for the Company in this capacity or such other
capacity as assigned in accordance with this Agreement.

 

Employee and the Company further desire to enter into this written Employment
Agreement (“Agreement”) and to be bound by the terms and conditions herein.

 

NOW THEREFORE, in consideration of the promises and the mutual covenants and
agreements contained herein, and intending to be legally bound hereby, the
parties hereto agree as follows:

 

SECTION 1.  CAPACITY AND DUTIES

 

1.1                               At-Will Employment.  The Company has employed
and shall continue to employ Employee pursuant to this Agreement on an “at-will”
basis.  Employee’s employment hereunder with the Company is for an unspecified
duration and may be terminated at any time by either Employee or the Company,
for any or no reason, with or without prior notice, except as described in
Section 3.

 

1.2                               Capacity and Duties.  Initially, Employee
shall be employed by the Company as Executive Vice President — Southern Region,
reporting to President and Chief Operating Officer or as otherwise determined by
the Chairman, President, Chief Operating Officer, Vice Chairman or the Company’s
Board of Directors (or committee thereof).  The Company may assign to Employee
new or different capacities, duties, responsibilities and/or titles from time to
time, as determined by the Company in its sole discretion.  Employee shall
perform such duties and responsibilities normally associated with the position
of Executive Vice President and/or as may be assigned to Employee from time to
time pursuant to this Agreement.  Employee is required to work those hours
necessary to perform properly such duties and responsibilities normally
associated with the position of Executive Vice President (or such other title or
office assigned to him in accordance with this Agreement) and as may be assigned
to Employee from time to time pursuant to this Agreement.  Notwithstanding the
foregoing in this Section 1.2, after a Closing Date of a Change of Control has
occurred, Employee shall have such title, duties and responsibilities and be
subject to the supervision and control of such persons as may be, after taking
into account the fact that a Change of Control has occurred and other relevant
facts and circumstances, determined by the Company in its sole discretion from
time to time.

 

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SECTION 2.  COMPENSATION AND FRINGE BENEFITS

 

2.1                               Compensation.

 

(a)                                  Base Salary.  As base compensation for
Employee’s services hereunder, the Company shall pay to Employee an initial
salary at an annual rate of $300,000 (the “Base Salary”).  Employee’s Base
Salary will be payable in accordance with the Company’s regular payroll
practices in effect from time to time during Employee’s employment; but not less
than monthly.  Employee’s Base Salary shall be reviewed by the Company
annually.  Employee’s Base Salary may be adjusted (i) upward at the Company’s
discretion, or (ii) after September 30, 2010, downward without Employee’s
consent; provided, further, however, that in the event of the occurrence of a
Closing Date, such Base Salary shall not be decreased (from the level in effect
on the Closing Date) by Company without the Employee’s prior consent for a
period of one year following such Closing Date.

 

(b)                                 Bonus.

 

(i)                                     Annual Bonus Incentive.  Subject to
Section 2.1(b)(ii), Section 2.1(b)(iii) and Section 2.1(b)(iv), Employee shall
be eligible to participate in such annual bonus program for Employee’s position
as may be implemented from time to time by the Company in its sole discretion. 
Any annual incentive bonus amounts will be paid in accordance with regular
payroll practices annually for such amounts, provided that Employee is employed
by the Company on the applicable bonus payment date.  (For example, fiscal 2008
annual bonuses were paid in October 2008.)  Except as provided in
Section 2.1(b)(iii), Employee is not eligible for any guaranteed bonus under
this Agreement or otherwise and the terms of any bonus plan applicable to
Employee may be modified or eliminated by the Company in its sole discretion.

 

(ii)                                  Fiscal Year 2009 Bonus.  The Compensation
Committee may award you a discretionary bonus amount, if it so chooses, in its
sole discretion, provided you are employed by the Company on the payment date.

 

(iii)                               Fiscal Year 2010 Bonus.  Subject to the
following provisions of Section 2.1(b)(iii), provided that Employee is employed
by the Company on the earlier of October 15, 2010 and the date on which Fiscal
Year 2010 incentive bonuses are paid to all employees (i.e., the “normal bonus
payment date”; anticipated to be in October 2010), Employee shall be paid a
Fiscal Year 2010 Annual Bonus Incentive of at least $50,000.00, less applicable
payroll withholding amounts, with such amount being paid in accordance with
regular payroll practices for such amounts irrespective of whether Employee is
employed by the Company when such bonuses are paid.  The Company shall pay to
Employee Employee’s Fiscal Year 2010 Annual Bonus Incentive on the earlier of
the normal bonus payment date or December 31, 2010 or within sixty (60) days
after termination in accordance with Section 2.1(b)(iv).

 

(iv)                              Termination After Bonus is Earned, but Remains
Unpaid.  Notwithstanding the foregoing, if Employee’s employment with the
Company hereunder terminates for any reason or no reason, then any unpaid amount
of any earned but unpaid Fiscal Year 2010 Annual Bonus Incentive shall be added
to any severance amount payable to Employee

 

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pursuant to Section 2.3(b).  If no severance is payable pursuant to
Section 2.3(b), any earned but unpaid Fiscal Year 2010 Annual Bonus Incentive
shall be paid within sixty (60) days after termination.

 

2.2                               Fringe Benefits.

 

(a)                                  Employee (and his eligible dependents,
where applicable) shall be eligible (i) to participate in the Company’s
insurance and health benefit plans to the extent and upon the terms offered to
full-time Company employees, including but not limited to, any supplemental
executive retirement plans (SERP) that may be offered, subject to the plans’
respective eligibility requirements and other terms, conditions, restrictions
and exclusions, and (ii) to participate in the Company’ equity incentive plans
on terms substantially similar to the terms offered to other similarly situated
Company officers, to the extent participation is offered to such other
officers.  To the extent applicable, Employee shall be entitled to participate
in any SERP as a Tier 1 employee.  Nothing herein shall preclude or otherwise
restrict the Company’s right to modify or terminate any insurance or other
benefit plan, policy or program as it deems appropriate in its sole discretion.

 

(b)                                 Vacation.  Employee shall be entitled to
three (3) weeks of paid vacation during each full calendar year of his
employment in accordance with the terms and provisions of the Company’s policies
and practices in effect from time to time.

 

(c)                                  Expense Reimbursement.  The Company shall
reimburse Employee for all reasonable expenses incurred by him in connection
with the performance of his duties hereunder in accordance with the Company’s
regular reimbursement policies as in effect from time to time and upon receipt
of itemized vouchers therefor and such other supporting information as the
Company may reasonably require.  The reimbursement of any such eligible expense
shall be made on or before March 15th of the calendar year next following the
calendar year in which the expense was incurred.

 

(d)                                 Additional Benefits.  Employee shall be
eligible to participate in such other fringe benefits upon the terms offered to
the Company’s other full time employees and subject to the terms, conditions,
restrictions and exclusions of any such fringe benefit plans or programs.

 

2.3                               Payments After Termination of Employment.

 

(a)                                  Termination for Any Reason.  Regardless of
the reason for the termination of Employee’s employment, whether by Employee or
the Company, whether or not due to Employee’s death or Disability and whether or
not for Cause, Employee (or his estate) will receive unpaid Base Salary for any
days actually worked by Employee prior to the termination of his employment,
expense reimbursement for all reasonable expenses incurred by him in connection
with the performance of his duties prior to the termination of his employment
and payment for accrued but unused vacation pay to the extent Employee may be
eligible for such payment under the Company’s policies.

 

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(b)                                 Termination by the Company Without Cause,
Termination by Employee for Good Reason or Voluntary Termination After a Closing
Date.  Subject to Section 2.3(c), to the extent that:

 

(i) the Company terminates Employee’s employment without Cause;

 

(ii) Employee terminates Employee’s employment for Good Reason; or

 

(iii) there occurs a Closing Date and Employee terminates his employment with
the Company for any reason during the 30-day period immediately preceding the
one-year anniversary of the Closing Date,

 

the Company shall pay the Employee the sum of the following:  (i) $300,000 as
severance, and (ii) in accordance with the provisions of Section 2.1(b)(iv), the
balance of any earned by unpaid Annual Bonus Incentive for Fiscal Year 2010,
within sixty (60) days after such termination.

 

(c)                                  Termination Agreement.  Employee shall
receive the benefits set forth in Section 2.3(b) above if and only if
(i) Employee duly executes and returns to the Company a termination agreement
(“Termination Agreement”) substantially in the form attached hereto as
“Exhibit A,” as said form may be modified by the Company in its reasonable
discretion solely to address developments in the law including legal claims that
came into existence after the date hereof within 21 days after such Termination
Agreement is provided to Employee and Employee does not revoke it within any
revocation period provided for in the Termination Agreement; and (ii) Employee
complies in all material respects with his obligations under this Agreement and
the Termination Agreement.  The Termination Agreement shall be provided by the
Company to Employee within seven (7) days after a termination of Employment
pursuant to which Employee may be entitled to receive the benefits set forth in
Section 2.3(b).

 

SECTION 3.  TERMINATION OF EMPLOYMENT

 

3.1                               Termination by Company; Death of Employee. 
Company may terminate Employee’s employment for any or no reason (i.e. without
Cause) by providing Employee fourteen (14) days prior written notice, which
notice the Company can waive, in whole or in part, in its sole discretion, by
paying Employee for such time; provided, however, the Company may terminate
Employee’s employment immediately in the event there is Cause, or in the event
of the Employee’s Disability.  As used in this Agreement, “Disability” means
Employee’s inability, for a total of thirteen (13) weeks or more in any rolling
six (6) month period to perform the essential duties of Employee’s position,
with any reasonable accommodation required by law, due to a mental or physical
impairment which substantially limits one or more major life activities.  The
determination as to whether Employee has a Disability shall be made by the
Company or a physician selected by the Company, and Employee agrees to submit to
reasonable medical examinations upon the request and at the expense of the
Company.  Employee’s employment hereunder shall immediately terminate upon his
death.  Any termination by the Company due to a Disability shall not constitute
a termination without Cause.

 

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3.2.                            Termination by Employee.  Employee may terminate
Employee’s employment at any time and for other than Good Reason by providing
the Company (a) with forty-five (45) days prior written notice, if the
termination date is prior to December 31, 2010, which notice period the Company
may waive, in whole or in part, in its sole discretion; and (b) thirty (30) days
prior written notice if the termination date is after December 31, 2010.

 

3.3                               Termination for Cause.  The Company may
terminate Employee’s employment at any time for “Cause,” which for purposes of
this Agreement shall mean any of the following: (i) self dealing, willful
misconduct, fraud, misappropriation, embezzlement, dishonesty, or
misrepresentation (other than a good faith dispute over an expense account
charge that is of an immaterial and insignificant amount), (ii) being charged by
governmental authorities with or convicted of a felony, (iii) failure of
Employee to perform his known duties and responsibilities to the Company which
persists for more than fourteen (14) days after written notice or which recurs
(i.e., the same or substantially similar matter which has been cured after
written notice from the Company occurs again within the succeeding twelve (12)
month period), (iv) gross negligence which persists for more than fourteen (14)
days after written notice from the Company or which recurs; (v) any violation of
the Company’s Code of Business Conduct & Ethics (as it may be amended, restated,
or replaced from time to time) which causes, or is likely to cause, injury to
the Company or which recurs, (vi) any violation by Employee of any policy, rule,
or reasonable direction or regulation of the Company which persists for more
than fourteen (14) days after written notice or which recurs, (vii) any
violation by Employee of the provisions of the Non-Competition and
Confidentiality Agreement described in Section 4.1 below, or (viii) any
violation by Employee of any provision of this Agreement.

 

3.4                               Termination for Good Reason.  Employee may
terminate Employee’s employment at any time for Good Reason, which for purposes
of this Agreement shall mean: (i) material reduction of Employee’s Base Salary
in violation of Section 2.1; (ii) the Company’s requiring the Employee to be
based at any office or location other than in Charlotte, North Carolina or
within 35 miles of the Charlotte metropolitan area, or Philadelphia,
Pennsylvania or within 45 miles of the Philadelphia metropolitan area; or
(iii) any material breach of this Agreement by the Company; provided, however,
that Good Reason shall not exist under (i) through (iii) above unless and until
Employee provides the Company with written notice of the condition that Employee
believes to constitute Good Reason within thirty (30) days after the initial
occurrence of such condition and the Company fails to cure the condition within
thirty (30) days after receiving such written notice or such condition recurs.

 

3.5                               Change of Control and Closing Date.  A “Change
of Control” shall be deemed to have occurred upon the earliest to occur of the
following dates:

 

(a)                                  the date the stockholders of the Company
(or the Board of Directors, if stockholder action is not required) approve a
plan or other arrangement pursuant to which the Company will be dissolved or
liquidated; or

 

(b)                                 the date the stockholders of the Company (or
the Board of Directors, if stockholder action is not required) approve a
definitive agreement to sell or otherwise dispose of substantially all of the
assets of the Company; or

 

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(c)                                  the date the stockholders of the Company
(or the Board of Directors, if stockholder action is not required) and the
stockholders of the other constituent corporation (or its board of directors if
stockholder action is not required) have approved a definitive agreement to
merge or consolidate the Company with or into such other corporation, other
than, in either case, a merger or consolidation of the Company in which holders
of shares of the Company’s Common Stock immediately prior to the merger or
consolidation will have at least a majority of the voting power of the surviving
corporation’s voting securities immediately after the merger or consolidation,
which voting securities are to be held in the same proportion as such holders’
ownership of Common Stock of the Company immediately before the merger or
consolidation; or

 

(d)                                 the date any entity, person or group, within
the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act (other
than (A) the Company or any of its subsidiaries or any employee benefit plan (or
related trust) sponsored or maintained by the Company or any of its
subsidiaries, (B) Jeffrey P. Orleans or family members of Jeffrey P. Orleans
(all such persons being referred to as “Orleans Family Members”), (C) any entity
a majority of the equity in which is owned by Orleans Family Members), or
(D) any trust as to which a majority of the beneficiaries are Orleans Family
Members), shall have become the beneficial owner of, or shall have obtained
voting control over, more than fifty percent (50%) of the outstanding shares of
the Company’s common stock.

 

The “Closing Date” means the date, if any, on which a transaction that is
treated as a Change of Control is consummated.

 

3.6                               Non-Competition and Confidentiality
Agreement.  Termination of Employee’s employment either by Employee or the
Company, whether with or without Cause, and whether or not due to Employee’s
Disability, shall not release Employee from Employee’s obligations and
restrictions under the Non-Competition and Confidentiality Agreement referred to
in Section 4.1 except to the extent specifically provided in that agreement.

 

SECTION 4.  NON-COMPETITION AND CONFIDENTIALITY

 

4.1                               Non-Competition and Confidentiality
Agreement.  The terms of this Agreement are contingent upon Employee’s execution
of a Non-Competition and Confidentiality Agreement in the form attached hereto
as “Exhibit B” to this Agreement.  Employee’s failure to execute the
Non-Competition and Confidentiality Agreement on or before this Agreement’s
Effective Date will invalidate this Agreement.

 

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SECTION 5.  MISCELLANEOUS

 

5.1                               Severability; Survival.  Nothing in this
Agreement is intended to violate any law or shall be interpreted to violate any
law.  In the event that any provision contained in this Agreement shall be
determined by any court of competent jurisdiction to be overbroad and/or
unenforceable, then the court making such determination shall have the authority
to narrow the provision as necessary to make it enforceable and the provision
shall then be enforceable in its narrowed form.  Moreover, each provision of
this Agreement is independent of and severable from each other.  In the event
that any provision in this Agreement is determined to be legally invalid or
unenforceable by a court and is not modified by a court to be enforceable, the
affected provision shall be stricken from the Agreement, and the remaining
provisions of this Agreement shall remain in full, force and effect.  For
purposes of this Section 5.1, a “provision” of this Agreement shall mean any
section or subsection of this Agreement or any sentence or clause within any
section or subsection of this Agreement.  The Non-Competition and
Confidentiality Agreement, the provisions of Section 2.2(f) and Section 5 of
this Agreement and any obligation of the Company to make payments or provide
benefits that accrued on or prior to the date of termination (or in connection
with such termination) shall survive the termination of Employee’s employment
and the termination of this Agreement.

 

5.2                               Notices.  All notices hereunder shall be in
writing and shall be sufficiently given if hand-delivered, sent by documented
overnight delivery service or registered or certified mail, postage prepaid,
return receipt request or by telegram, fax or telecopy (confirmed by U.S. mail),
receipt acknowledged, addressed as set forth below or to such other person
and/or at such other address as may be furnished in writing by any party hereto
to the other.  Any such notice shall be deemed to have been given as of the date
received, in the case of personal delivery, or on the date shown on the receipt
of confirmation therefor, in all other cases.

 

(a)                                  If to Company:

 

Orleans Homebuilders Inc.

3333 Street Road

Suite 101

Bensalem, PA 19020

Tel:  (215) 245-7500

Fax: (215) 633-2351

 

Attn:                    Benjamin D. Goldman, Vice Chairman

 

(b)                                 If to Employee:

 

At Employee’s current home address as reflected in the Company’s records.

 

5.3                               Entire Agreement and Modification.   This
Agreement along with the Non-Competition and Confidentiality Agreement referred
to in Section 4.1 constitutes the entire agreement between the parties hereto
with respect to the matters contemplated herein and

 

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supersedes all prior agreements and understandings with respect thereto.  No
amendment, modification, or waiver of this Agreement shall be effective unless
in writing and executed by both parties.  Neither the failure nor any delay on
the part of any party to exercise any right, remedy, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other of further
exercise of the same or any other right, remedy, power, or privilege with
respect to any occurrence or be construed as a waiver of any right, remedy,
power, or privilege with respect to any other occurrence.

 

5.4                               Governing Law.  The parties agree that this
Agreement is made pursuant to, and shall be construed and enforced in accordance
with, the internal laws of the Commonwealth of Pennsylvania (and United States
federal law, to the extent applicable), without giving effect to otherwise
applicable principles of conflicts of law.

 

5.5                               Headings; Counterparts.  The headings of
sections in this Agreement are for convenience only and shall not affect its
interpretation.  This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original and all of which, when taken
together, shall be deemed to constitute but one and the same Agreement.

 

5.6                               Assignment and Succession.   The Company may
assign this Agreement in connection with any sale or merger (whether a sale or
merger of stock or assets or otherwise) of the Company or the business of the
Company or any affiliate of the Company.  Employee expressly consents to the
assignment of the Agreement to any new owner of the Company’s business or
purchaser of the Company.  Employee’s rights and obligations hereunder are
personal and may not be assigned by Employee. This Agreement shall inure to the
benefit of and be enforceable by Employee’s heirs, beneficiaries and/or legal
representatives.

 

5.7                               Special Rules Regarding Section 409A of the
Internal Revenue Code.  Notwithstanding anything herein to the contrary, in the
event any payments or benefits required to be provided hereunder are deemed to
constitute payments of “nonqualified deferred compensation” that is subject to
the requirements of Section 409A of the Internal Revenue Code, then the time and
manner in which such payment or benefit is provided shall be adjusted, to the
extent reasonably possible, so that payment or distribution is made at a time
and in a manner that is consistent with the requirements of such Section 409A
(and applicable proposed or final Treasury regulations or other guidance issued
or to be issued by the Internal Revenue Service).  This Section 5.7 may, for
example, require that certain payments to Employee following his termination of
employment be delayed until the date that is six (6) months after the date of
his separation from service with the Company if, at the time of such termination
of employment Employee was a “specified employee” (as that term is used for
purposes of Section 409A(2)(B)(i).  All other payments and taxable benefits
shall be made available or distributed to Employee at such time(s) as provided
by the applicable provisions of this Agreement.  In the event any payments are
delayed as required by this Section 5.7, those payments shall be made in a
single lump sum with interest, at the lesser of 5% or prime rate as published
from time to time in the Money Rates section of the Wall Street Journal. In
addition, to the extent any payments made by reason of Employee’s termination of
employment are considered payable under a nonqualified deferred compensation
plan that is subject to Internal Revenue Code Section 409A,

 

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any reference to “termination of employment” shall be interpreted to mean a
“separation from service” as defined in Treasury Regulations applicable under
Internal Revenue Code Section 409A.  To the extent any reimbursements or in-kind
benefits due to Employee under this Agreement constitutes “deferred
compensation” under Internal Revenue Code Section 409A, any such reimbursements
or in-kind benefits shall be paid to Employee in a manner consistent with Treas.
Reg. Section 1.409A-3(i)(1)(iv).  Each payment made under this Agreement shall
be designated as a “separate payment” within the meaning of Internal Revenue
Code Section 409A.  The Company shall consult with Employee in good faith
regarding the implementation of the provisions of this Section 5.7.

 

5.8                               Payment Dates and Payments.  The Company shall
be deemed to have complied with the payment dates referenced in this Agreement
if the Company pays Employee on the payroll pay date that corresponds to the pay
period during which the relevant payment date falls.  All payments hereunder
shall be subject to applicable withholdings and taxes.

 

[SIGNATURES ON FOLLOWING PAGE]

 

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IN WITNESS WHEREOF, and intending to be legally bound, the parties have executed
this Agreement as of the date first above written.

 

ORLEANS HOMEBUILDERS, INC.

 

EMPLOYEE

 

 

 

 

 

 

By:

Garry P. Herdler

 

Thomas R. Vesey

 

Garry P. Herdler

 

Thomas R. Vesey

 

Executive Vice President and

 

 

 

Chief Financial Officer

 

 

 

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