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.


 





















 


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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