EXHIBIT
10.4


 


[ORLEANS
HOMEBUILDERS, INC. LETTERHEAD]


 


December 5, 2008


 


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 250,000 shares of restricted stock pursuant to a
Restricted Stock Award dated as of December 4, 2008 (the “Restricted Stock”).  The Restricted Stock is being issued pursuant
to Registration Statement No. 333-151168 on Form S-8 which registered
1,600,000 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,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ MICHAEL
  T. VESEY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Michael T.
  Vesey

  
	
   

  	
   

  	
   

  
	
  Agreed to
  and acknowledged:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ GARRY P.
  HERDLER

  	
   

  	
   

  
	
  Garry P.
  Herdler

  	
   

  	
   

  



 


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