EXHIBIT 10.5
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT TO EMPLOYMEENT AGREEMENT, made as of this 5th day of
December, 2008, is between Orleans Homebuilders, Inc., a Delaware corporation,
with offices at 3333 Street Road, Suite #101, Bensalem, Pennsylvania 19020 (the
"Company" or "Orleans"), and Garry Herdler, an individual (hereinafter called
"Employee").
BACKGROUND
AS OF FEBRUARY 27, 2007, THE COMPANY AND EMPLOYEE ENTERED INTO AN EMPLOYMENT
AGREEMENT PURSUANT TO WHICH EMPLOYEE WAS EMPLOYED BY THE COMPANY AS EXECUTIVE
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER (THE "ORIGINAL AGREEMENT").
THE COMPANY DESIRES TO CONTINUE TO EMPLOY EMPLOYEE AS EXECUTIVE VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER, AND EMPLOYEE DESIRES TO CONTINUE TO BE SO EMPLOYED
ON THE TERMS AND CONDITIONS CONTAINED IN THE ORIGINAL AGREEMENT, SUBJECT ONLY TO
THE CHANGES CONTAINED IN THIS FIRST AMENDMENT.
THE COMPANY AND EMPLOYEE DESIRES TO AMEND THE ORIGINAL AGREEMENT IN CERTAIN
RESPECTS TO REWARD EMPLOYEE FOR STRONG PERFORMANCE OF HIS DUTIES AND TO
ENCOURAGE LONGER TERM RETENTION THROUGH CERTAIN INCENTIVES.
CERTAIN PROVISIONS OF THE ORIGINAL AGREEMENT MAY BE TREATED AS PROVIDING FOR
PAYMENTS THAT ARE IN THE NATURE OF "NONQUALIFIED DEFERRED COMPENSATION," AS THAT
PHRASE IS USED FOR PURPOSES OF SECTION 409A OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), THE MODIFICATION OF SUCH ARRANGEMENTS IN ORDER TO
COMPLY WITH APPLICABLE PROVISIONS OF THE CODE IS PERMITTED DURING A TRANSITIONAL
PERIOD THAT ENDS AS OF DECEMBER 31, 2008 AND EMPLOYEE AND THE COMPANY DESIRE TO
MAKE CERTAIN AMENDMENTS PURSUANT THERETO.
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:
AMENDMENTS
1.
SECTION 2.1(A) OF THE ORIGINAL AGREEMENT IS HEREBY AMENDED AND
RESTATED TO READ IN ITS ENTIRETY AS FOLLOWS:
BASE SALARY.
AS COMPENSATION FOR EMPLOYEE'S SERVICES HEREUNDER, THE COMPANY
SHALL PAY TO EMPLOYEE FOR FISCAL YEARS (HEREINAFTER DEFINED) 2007 AND 2008 AN
ANNUAL BASE SALARY OF FOUR HUNDRED FIFTY THOUSAND DOLLARS ($450,000), WHICH
ANNUAL SALARY SHALL INCREASE TO SIX HUNDRED FIFTY THOUSAND DOLLARS ($650,000)
RETROACTIVELY EFFECTIVE AS OF JULY 1, 2008, AND INCREASE TO SIX HUNDRED SEVENTY
FIVE THOUSAND DOLLARS ($675,000) FOR FISCAL YEARS 2010, 2011, 2012 AND
THEREAFTER (THE "BASE SALARY"), COMMENCING JULY 1ST OF
EACH SUCH FISCAL YEAR.
FOR FISCAL YEAR 2013 AND THEREAFTER, IF APPLICABLE, THE
PARTIES SHALL DISCUSS WHETHER EMPLOYEE'S BASE SALARY SHALL BE INCREASED.
EMPLOYEE'S BASE SALARY SHALL BE PAYABLE IN ACCORDANCE WITH THE COMPANY'S REGULAR
PAYROLL PRACTICES IN EFFECT FROM TIME TO TIME DURING EMPLOYEE'S EMPLOYMENT, BUT
NOT LESS FREQUENTLY THAN MONTHLY.
THE COMPANY'S FISCAL YEAR RUNS FROM JULY 1
THROUGH JUNE 30 ("FISCAL YEAR") SO THAT, FOR EXAMPLE, FISCAL YEAR 2009 RUNS FROM
JULY 1, 2008 THROUGH JUNE 30, 2009.
2.
SECTION 2.1(B)(I) OF THE ORIGINAL AGREEMENT IS HEREBY AMENDED
AND RESTATED TO READ IN ITS ENTIRETY AS FOLLOWS:
THE COMPANY SHALL PAY EMPLOYEE A SIGNING BONUS IN THE AMOUNT OF $900,000,
PAYABLE AS FOLLOWS:
(A) $250,000 PAYABLE TEN (10) DAYS AFTER THE EFFECTIVE DATE
OR