Exhibit 10.8

 

ORLEANS HOMEBUILDERS, INC.

 

CASH BONUS PLAN FOR GARRY P. HERDLER

 

(Effective December 5, 2008)

 

The Orleans Homebuilders, Inc. (the “Company”) Cash Bonus Plan for Garry P.
Herdler (the “Plan”), is designed to provide Garry P. Herdler with a
performance-based cash bonus as an incentive contingent on the achievement of
corporate objectives.

 

ARTICLE I- DEFINITIONS

 

1.1           “BOARD” SHALL MEAN THE BOARD OF DIRECTORS OF THE COMPANY.

 

1.2           “COMMITTEE” SHALL MEAN THE COMPENSATION COMMITTEE OF THE BOARD, OR
SUCH OTHER COMMITTEE AS MAY BE DESIGNATED BY THE BOARD TO ACT AS THE
ADMINISTRATIVE COMMITTEE WITH RESPECT TO THE PLAN.

 

1.3           “PARTICIPANT” SHALL MEAN GARRY P. HERDLER.

 

1.4           “Performance Targets” shall mean those performance targets which
are approved by the Committee, consisting of such corporate financial and other
objectives relating to any one or more of the following:   (i) a capital
restructuring, (ii) refinancing outstanding debt, (iii) sales or issuance of
debt, equity or equity-linked securities, (iv) the receipt of outside
investment(s) by the Company or a joint venture in which the Company is a
participant, and (v) modification and/or extension of the Company’s existing
revolving credit facility.  A copy of the Performance Targets, in the form
approved by the Committee, shall be provided to Participant as soon as
practicable after such approval by the Committee.

 

ARTICLE II- ELIGIBILITY AND PARTICIPATION

 

2.1           PARTICIPATION IN THE PLAN SHALL BE OPEN ONLY TO THE PARTICIPANT.

 

ARTICLE III- PERFORMANCE GOALS AND BONUS AWARD

 

3.1           AN ADDITIONAL PERFORMANCE BONUS OF $375,000 WILL BE EARNED BY
EMPLOYEE IMMEDIATELY (AND PAYABLE BY THE COMPANY AS PROVIDED IN ARTICLE IV) IF
AND WHEN THE COMPANY ACHIEVES ANY ONE OF THE PERFORMANCE TARGETS.

 

3.2           A SECOND ADDITIONAL PERFORMANCE BONUS OF $375,000 WILL BE EARNED
BY EMPLOYEE IMMEDIATELY (AND PAYABLE BY THE COMPANY AS PROVIDED IN ARTICLE IV)
IF AND WHEN THE COMPANY ACHIEVES A SECOND PERFORMANCE TARGET.

 

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3.3           THE MAXIMUM AMOUNT OF CASH THAT MAY BE AWARDED UNDER THIS PLAN IS
$750,000, REGARDLESS OF WHETHER THE COMPANY ACHIEVES MORE THAN TWO OF THE
PERFORMANCE TARGETS.

 

ARTICLE IV- PAYMENT OF AWARDS

 

4.1           AT PARTICIPANT’S SOLE OPTION, ANY AMOUNTS PAYABLE PURSUANT TO
ARTICLE III SHALL BE PAYABLE 100% IN CASH, OR 50% IN CASH AND 50% IN FULLY
VESTED COMPANY COMMON STOCK (ROUNDED TO THE NEAREST WHOLE SHARE WITH ANY
DIFFERENCE PAYABLE IN CASH), BASED UPON A VALUATION OF $2.75 PER SHARE
(REGARDLESS OF FUTURE CHANGES IN THE VALUE OF COMPANY COMMON STOCK) SUCH THAT UP
TO 136,363 SHARE OF FULLY VESTED COMMON STOCK WILL BE ISSUED TO PARTICIPANT IF
ALL AWARDS ARE EARNED UNDER THIS PLAN AND PARTICIPANT ELECTS TO HAVE ALL SUCH
AWARDS PAYABLE IN COMPANY COMMON STOCK.

 

4.2           THE PARTICIPANT SHALL BE ELIGIBLE TO RECEIVE A BONUS AWARD
PURSUANT TO THIS PLAN ONLY IF HE IS EMPLOYED BY THE COMPANY ON THE DATE THE
BONUS PAYMENT IS EARNED.

 

4.3           FOR CLARIFICATION, THE PARTICIPANT PAYMENT OPTION DESCRIBED IN
SECTION 4.1 SHALL BE DETERMINED ON A CUMULATIVE BASIS SO THAT, SHOULD
PARTICIPANT CHOOSE TO BE PAID 100% CASH FOR THE FIRST BONUS AWARD, PARTICIPANT
COULD ELECT TO BE PAID UP TO 100% IN COMMON STOCK WITH RESPECT TO THE SECOND
BONUS WHICH MAY BE AWARDED UNDER THIS PLAN.

 

4.4           PARTICIPANT SHALL MAKE ANY ELECTION TO RECEIVE ANY AWARD HEREUNDER
IN CASH OR COMMON STOCK BY PROVIDING THE COMPANY WITH WRITTEN NOTICE OF
PARTICIPANT’S ELECTION NO LATER THAN TWO BUSINESS DAYS AFTER THE DATE ON WHICH
THE AWARD IS EARNED.  IN THE EVENT SUCH NOTICE IS NOT PROVIDED WITHIN THE TIME
PERIOD SPECIFIED, THE APPLICABLE AWARD SHALL BE PAID IN CASH.  ANY AMOUNT OF
BONUS EARNED SHALL BE PAID BY THE COMPANY WITHIN FIVE BUSINESS DAYS OF THE DATE
ON WHICH IT IS EARNED.

 

ARTICLE V- OTHER TERMS AND CONDITIONS

 

5.1           NO PERSON SHALL HAVE ANY LEGAL CLAIM TO BE GRANTED AN AWARD UNDER
THE PLAN. EXCEPT AS MAY BE OTHERWISE REQUIRED BY LAW, BONUS AWARDS UNDER THE
PLAN SHALL NOT BE SUBJECT IN ANY MANNER TO ANTICIPATION, ALIENATION, SALE,
TRANSFER, ASSIGNMENT, PLEDGE, ENCUMBRANCE, CHARGE, GARNISHMENT, EXECUTION, OR
LEVY OF ANY KIND, EITHER VOLUNTARY OR INVOLUNTARY. BONUSES AWARDED UNDER THE
PLAN SHALL BE PAYABLE FROM THE GENERAL ASSETS OF THE COMPANY AND NO PARTICIPANT
SHALL HAVE ANY CLAIM WITH RESPECT TO ANY SPECIFIC ASSETS OF THE COMPANY.

 

5.2           NEITHER THE PLAN NOR ANY ACTION TAKEN UNDER THE PLAN SHALL BE
CONSTRUED AS GIVING ANY EMPLOYEE THE RIGHT TO BE RETAINED IN THE EMPLOY OF THE
COMPANY OR ANY SUBSIDIARY OR TO MAINTAIN ANY PARTICIPANT’S COMPENSATION AT ANY
LEVEL.

 

5.3           THE COMPANY OR ANY OF ITS SUBSIDIARIES WILL DEDUCT FROM ANY AWARD
ANY APPLICABLE WITHHOLDING TAXES, WHETHER THE BONUS IS PAID IN CASH OR STOCK;
PROVIDED, THAT IN THE EVENT OF PAYMENT IN STOCK, THE PARTICIPANT MAY PROVIDE THE
COMPANY WITH SUFFICIENT CASH FOR THE APPLICABLE WITHHOLDING OBLIGATION AND IN
SUCH EVENT THE COMPANY WILL NOT DECREASE THE AMOUNT OF STOCK TO BE ISSUED TO
PARTICIPANT FOR ANY WITHHOLDING OBLIGATION.

 

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5.4           UNLESS EXTENDED BY THE COMPANY IN ITS SOLE DISCRETION, THIS PLAN
SHALL AUTOMATICALLY TERMINATE ON JUNE 30, 2010 AND AFTER SUCH TERMINATION THE
COMPANY SHALL HAVE NO OBLIGATION TO MAKE ANY PAYMENTS PURSUANT TO THIS PLAN
EXCEPT THOSE EARNED PRIOR TO THE TERMINATION DATE.  WITH RESPECT TO PARTICIPANT,
THIS PLAN SHALL BE IN ADDITION TO AND NOT A REPLACEMENT OF THE ORLEANS
HOMEBUILDERS, INC. INCENTIVE COMPENSATION PLAN.

 

ARTICLE VI- ADMINISTRATION

 

6.1           THE COMMITTEE SHALL HAVE FULL POWER AND AUTHORITY TO ADMINISTER
AND INTERPRET THE PROVISIONS OF THE PLAN AND TO ADOPT SUCH RULES, REGULATIONS,
AGREEMENTS, GUIDELINES AND INSTRUMENTS FOR THE ADMINISTRATION OF THE PLAN AND
FOR THE CONDUCT OF ITS BUSINESS AS THE COMMITTEE DEEMS NECESSARY OR ADVISABLE.

 

6.2           THE COMMITTEE SHALL HAVE FULL POWER TO DELEGATE TO ANY OFFICER OR
EMPLOYEE OF THE COMPANY THE AUTHORITY TO ADMINISTER AND INTERPRET THE PROCEDURAL
ASPECTS OF THE PLAN, SUBJECT TO THE PLAN’S TERMS, INCLUDING ADOPTING AND
ENFORCING RULES TO DECIDE PROCEDURAL AND ADMINISTRATIVE ISSUES.

 

6.3           NO MEMBER OF THE COMMITTEE SHALL BE LIABLE FOR ANY ACTION TAKEN OR
OMITTED TO BE TAKEN OR FOR ANY DETERMINATION MADE BY HIM OR HER IN GOOD FAITH
WITH RESPECT TO THE PLAN, AND THE COMPANY SHALL INDEMNIFY AND HOLD HARMLESS EACH
MEMBER OF THE COMMITTEE AGAINST ANY COST OR EXPENSE (INCLUDING COUNSEL FEES) OR
LIABILITY (INCLUDING ANY SUM PAID IN SETTLEMENT OF A CLAIM WITH THE APPROVAL OF
THE COMMITTEE) ARISING OUT OF ANY ACT OR OMISSION IN CONNECTION WITH THE
ADMINISTRATION OR INTERPRETATION OF THE PLAN, UNLESS ARISING OUT OF SUCH
PERSON’S OWN FRAUD OR BAD FAITH.

 

6.4           THE PLACE OF ADMINISTRATION OF THE PLAN SHALL BE IN THE
COMMONWEALTH OF PENNSYLVANIA, AND THE VALIDITY, CONSTRUCTION, INTERPRETATION,
ADMINISTRATION AND EFFECT OF THE PLAN AND OF ITS RULES AND REGULATIONS, AND
RIGHTS RELATING TO THE PLAN, SHALL BE DETERMINED SOLELY IN ACCORDANCE WITH THE
LAWS OF THE COMMONWEALTH OF PENNSYLVANIA.

 

6.5           FOR CLARIFICATION PURPOSES, ANY BONUSES AWARDED PURSUANT TO THIS
PLAN (INCLUDING ANY AWARD THAT IS PAID IN COMMON STOCK) SHALL BE CONSIDERED
“RECOGNIZED BONUS” FOR PURPOSES OF THE COMPANY’S SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN, BUT SHALL NOT BE CONSIDERED WHEN DETERMINING EMPLOYEE’S AVERAGE
ANNUAL BONUS OR PRIOR YEAR’S BONUS UNDER PARTICIPANT’S EMPLOYMENT AGREEMENT WITH
THE COMPANY DATED FEBRUARY 27, 2007, AS IT MAY BE AMENDED FROM TIME TO TIME.

 

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