Document:

EXHIBIT 10.2

ORLEANS
HOMEBUILDERS, INC.

EXECUTIVE COMPENSATION DEFERRAL PLAN

(AMENDED AND RESTATED SEPTEMBER 27, 2007; EFFECTIVE AS OF JUNE 1, 2005 OR AS
OTHERWISE SET FORTH HEREIN)

SECTION 1 - STATEMENT OF PURPOSE

This Executive Compensation Deferral Plan (the “Plan”)
is adopted effective as of June 1, 2005 with respect to irrevocable deferral
elections made by Participants on or after June 1, 2005, and, effective to
defer amounts otherwise payable as taxable compensation on and after January 1,
2006 consistent with the terms of deferral elections made by Participants
consistent with the provisions of the Plan as set forth herein.  The Plan is designed and implemented for the
purpose of providing to a limited group of key management or highly compensated
employees of the Company (as herein defined) who are significantly responsible
for the Company’s success, the opportunity to accumulate capital on a tax
deferred basis, thereby increasing the incentive for such employees to remain
in the employ of the Company and to make the Company more profitable.

It is the Company’s intention:

1.             That
the Plan and all elections, deferrals, rights and features, notwithstanding any
written terms or provisions to the contrary, be operated in good faith
compliance with Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”); and

2.             That,
as herein amended and restated, the Plan be consistent with all applicable
guidance as has been or may be issued in the future by the IRS and/or the
Treasury Department, including final regulations promulgated during 2007 as
Treasury Regulation Sections 1.409A-1 through 6.

3.             For
purposes of the Plan, all references to Code Section 409A shall be deemed to
include any applicable regulations issued by the IRS and/or the Treasury
Department (including proposed, temporary and/or final regulations) and any
guidance that may be issued by the IRS and/or the Treasury Department
interpreting such Code Section from time to time.

SECTION 2 - DEFINITIONS

2.1 “Account” means the account established for each
Participant by the Plan Administrator.

2.2 “Account Balance” means the amount as denominated
in dollars of a Participant’s Account as indicated by the records of the Plan
Administrator.

2.3 “Administrator” means the person designated by the
Board pursuant to Section 3.1 to administer the Plan on behalf of the Company
and also any other person that may have been designated by the Board or the
Committee to take on any of the duties and/or responsibilities of the
Administrator under the terms of the Plan as its delegatee.

 

2.4 “Beneficiary” means the person to whom the balance
in a deceased Participant’s account is payable, as designated by a Participant
in writing on a form satisfactory to the Company.  In the absence of any living designated
Beneficiary, a deceased Participant’s Beneficiary shall be the deceased
Participant’s then living spouse, if any, for his or her life; if none, or from
and after such spouse’s death, then the living children of the deceased
Participant, if any, in equal shares, for their joint and survivor lives; and
if none, or after their respective joint and survivor lives, the estate of the
deceased Participant.

2.5 “Board” means the Board of Directors of the
Company.

2.6 “Change of Control” means a transaction or event
that is a “Change of Control” as defined in Section 7.7.

2.7 “Committee” means the Board, or any committee (or
committees) that may be authorized by the Board to oversee, administer and
amend the Plan.  The Board may, at any
time and from time to time, modify the composition of the Committee or
designate one or more persons to serve as the Committee (or as the Committee
with respect to any designated group of Participants) at its discretion.  Any reference herein to the “Committee” shall
be deemed to be a reference to the Board when it acts as Administrator of the
Plan, and/or to such administrative committee or committees as may have been
established by the Board to administer the Plan in its stead.

2.8 “Company” means Orleans Homebuilders, Inc., a
Delaware corporation, and, as applicable, any subsidiary or affiliate of
Orleans Homebuilders, Inc., to the extent any employee of such subsidiary or
affiliate has been designated as participating in this Plan.

2.9 “Compensation” means the total amount of salary
and bonus earned each year by a Participant.

2.10 “Disability” means a situation where a
Participant (i) is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, or (ii) is, by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than 12 months,
receiving income replacement benefits for a period of not less than 3 months
under an accident, health or disability plan covering employees of the
Company.  The Disability of a Participant
shall be determined by a licensed physician selected by the Company.  Notwithstanding anything to the contrary, a
Participant shall not be deemed to suffer from a Disability unless the
Participant is “disabled” as that term is defined in Code Section 409A(a)(2)(C)
and Treasury Regulation Section 1.409A-3(i)(4).

2.11 “Eligible Employee” means an Employee who has
been designated as eligible to participate in the Plan.

2.12 “Employee” means an employee of the Company.

2.13 “Participant” means any Eligible Employee who
participates in the Plan as provided in Section 4 and has not for any reason
become ineligible to participate further in the Plan.  An 

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individual shall continue to be a Participant as long
as there is an Account Balance for that person.

2.14 “Participation Agreement” means a written
agreement between a Participant and the Company in substantially the form
attached hereto as Exhibit A.

2.15 “Plan” means the Orleans Homebuilders, Inc.  Executive Compensation Deferral Plan, as
contained in this instrument, including all amendments thereto.

2.16 “Plan Year” means the Plan’s accounting year of
twelve (12) months commencing on January 1st of each year and ending the
following December 3lst.  The initial
Plan Year shall be the 2006 calendar year.

2.17 “Termination” means the ending of employment with
the Company.  Notwithstanding the
foregoing, a Participant’s termination of employment shall not be deemed to
have occurred unless the termination of such Participant’s employment
constitutes a “separation from service” as that is defined in Treasury
Regulation Section 1.409A-1(h)(1).

2.18 “Vested” means the nonforfeitable portion of any
Account maintained on behalf of a Participant.

SECTION 3 - PLAN ADMINISTRATION

3.1 POWERS AND DUTIES OF THE ADMINISTRATOR.  The Committee shall be the Plan
Administrator, and shall administer the Plan for the exclusive benefit of the
Participants and their Beneficiaries, subject to the specific terms of the
Plan.  The Administrator shall administer
the Plan in accordance with its terms and shall have the power and discretion
to construe the terms of the Plan and to determine all questions arising in
connection with the administration, interpretation, and application of the
Plan.  The Administrator may establish procedures,
correct any defect, supply any information, or reconcile any inconsistency in
such manner and to such extent as shall be deemed necessary or advisable to
carry out the purpose of the Plan; provided, however, that any procedure,
discretionary act, interpretation or construction shall be done in a
nondiscriminatory manner based upon uniform principles consistently
applied.  The Administrator shall have
all powers necessary or appropriate to accomplish his duties under this Plan
and shall also have the express authority to delegatee its duties and
obligations hereunder to such person or persons as the Committee deems
appropriate.

The Administrator shall be charged with the duties of
the general administration of the Plan, including, but not limited to, the
following:

(a)           The discretion to
determine all questions relating to the eligibility of Employees to participate
or remain a Participant hereunder and to receive benefits under the Plan;

(b)           To compute and make
determinations with respect to the amount of benefits to which any Participant
shall be entitled hereunder;

(c)           To authorize and make
nondiscretionary or otherwise directed disbursements to Participants;

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(d)           To maintain all
necessary records for the administration of the Plan;

(e)           To interpret the
provisions of the Plan and to make and publish such rules for the regulation of
the Plan as are consistent with the terms hereof;

(f)            To prepare and
implement a procedure to notify employees that they have been selected as
eligible to participate in the Plan;

(g)           To assist any Participant
regarding his rights, benefits, or elections available under the Plan.

The Company shall indemnify, hold harmless and defend
the Administrator from any liability which the Administrator may incur in
connection with the performance of his or her duties in connection with this
Plan, so long as the Administrator was acting in good faith and within what the
Administrator reasonably understood to be the scope of his or her duties.

3.2 RECORDS AND REPORTS.  The Administrator shall keep a record of all
actions taken and shall keep all other books of account, records, and other
data that may be necessary for proper administration of the Plan and shall be
responsible for supplying all information and reports to the Company,
Participants and Beneficiaries.

3.3 PARTICIPANT STATEMENT.  The Administrator shall provide each
Participant each Plan Year a statement indicating that Participant’s Account
Balance.

3.4 INFORMATION FROM COMPANY.  To enable the Administrator to perform his
functions, the Company shall supply full and timely information to the
Administrator on all matters relating to the compensation of all Participants,
their retirement, death, disability, or termination of employment, and such
other pertinent facts as the Administrator may require.  The Administrator may rely upon such
information as is supplied by the Company and shall have no duty or
responsibility to verify such information.

3.5 CLAIMS PROCEDURE. 
Claims for benefits under the Plan may be filed with the Administrator
on forms supplied by the Company. 
Written or electronic notice of the disposition of a claim shall be
furnished to the claimant within 90 days after the claim is filed.  If additional time (up to 90 days) is
required by the Administrator to process the claim, written notice shall be
provided to the claimant within the initial 90 day period.  The extension notice shall indicate the
special circumstances requiring an extension of time and the date by which the
Administrator expects to render a determination.

In the event the claim is denied in whole or in part,
the notice shall set forth in language calculated to be understood by the
claimant (i) the specific reason or reasons for the denial, (ii) specific
reference to pertinent Plan provisions on which the denial is based, (iii) a
description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary, and (iv) a description of the Plan’s review
procedures and the time limits applicable to such procedures, including a
statement of the claimant’s right, if any, to bring a civil action under
section 502(a) of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), following an adverse benefit determination on review.

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3.6 CLAIMS REVIEW PROCEDURE.  Any Employee, former Employee, or Beneficiary
who has been denied a benefit by a decision of the Administrator pursuant to
Section 3.5 shall be entitled to request the Administrator to give further
consideration to his claim by filing with the Administrator a request for a
hearing.  Such request, together with a
written statement of the reasons why the claimant believes his claim should be
allowed, shall be filed with the Administrator no later than 60 days after
receipt of the written notification provided for in Section 3.5.  The claimant shall be provided, upon request
and free of charge, reasonable access to, and copies of, all documents, records
and other information relevant to the claimant’s claim for benefits.  The Administrator shall then conduct a
hearing within the next 60 days, at which the claimant shall have an
opportunity to submit comments, documents, records and other information
relating to the claim without regard to whether such information was submitted
or considered in the initial benefit determination.

The Administrator shall make a final decision as to
the allowance of the claim within 60 days of receipt of the appeal (unless
there has been an extension due to special circumstances, provided the delay
and the special circumstances occasioning it are communicated to the claimant
in writing within the 60 day period), and a decision shall be rendered as soon
as possible but not later than 110 days after receipt of the request for
review; provided, however, in the event the claimant fails to submit
information necessary to make a benefit determination on review, such period
shall be tolled from the date on which the extension notice is sent to the
claimant until the date on which the claimant responds to the request for
additional information.  The decision on
review shall be written or electronic and, in the case of an adverse
determination, shall include specific reasons for the decision, in a manner
calculated to be understood by the claimant, and specific references to the
pertinent Plan provisions on which the decision is based.  The decision on review shall also include (i)
a statement that the claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records and other
information relevant to the claimant’s claim for benefits, and (ii) a statement
describing any voluntary appeal procedures offered by the Plan, and a statement
of the claimant’s right, if any, to bring an action under Section 502(a) of ERISA
and shall include specific reasons for the decision and specific references to
the pertinent Plan provisions on which the decision is based.

SECTION 4 - ELIGIBILITY AND PARTICIPATION

4.1 ELIGIBILITY. 
The Committee, in its sole discretion, shall select the Employees who
are eligible to become Participants.

4.2 PARTICIPATION. 
The Committee or its designee shall notify those Employees selected for
participation of the benefits available under the Plan.  An Eligible Employee becomes a Participant in
the Plan upon the execution and delivery by him or her and the Committee or its
designee of a Participation Agreement. 
The Participation Agreement will include an acknowledgment by
Participant that he or she is aware of and familiar with the restrictions in the
Plan, that he or she has read and understands the Plan and Participation
Agreement, that he or she has had an opportunity to have the documents reviewed
by legal counsel and that the Participation Agreement will constitute a legal,
valid and binding agreement of Participant.

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SECTION 5 - CONTRIBUTIONS TO THE PLAN

5.1 PARTICIPANT’S COMPENSATION DEFERRALS.  A Participant may elect to defer each year an
amount of Compensation otherwise payable to him or her.  A participant may elect to defer up to 100%
of his or her salary and/or bonus each year and this election must be made by
December 31 of the year preceding the year in which the salary is earned, and,
with respect to any bonus, no later than such date as is permitted under Code
Section 409A.  Notwithstanding anything
in this Section 5.1 to the contrary, a Participant’s elections to defer annual
bonuses earned for the period from July 1, 2007 through June 30, 2008 (the “2008
Fiscal Year”) filed before the beginning of the 2008 Fiscal Year shall be
effective pursuant to their terms and are intended to be consistent with IRS
guidance regarding Code Section 409A in effect at the time of such
elections.  With respect to all other
deferrals of Compensation that would, but for the Participant’s election to
defer, be paid on or after January 1, 2008, the following rules shall be
applicable:

(a)           With respect to salary
payable during a Plan Year, an election to defer must be made no later than
such deadline as may be established by the Committee, which deadline shall be
no later than the last day of the Plan Year preceding the Plan Year to which
such deferral election relates.

(b)           With respect to bonuses
payable during a Plan Year, an election to defer must be made no later than
such deadline as may be established by the Committee, which deadline shall be
no later than the last day of the Plan Year preceding the earliest Plan Year
during which occurs any portion of the period of service to which such bonus
relates.  By way of an example, if a
bonus is payable with respect to a period of service measured from July 1, 2008
through June 30, 2009, an election to defer any portion of such bonus must be
filed no later than the applicable deadline, which cannot be later than
December 31, 2007.  Except as may be
otherwise permitted by the Committee, an election to defer bonus compensation
shall only be applicable to regular cash bonuses, and shall not be applicable
to bonuses paid out of the ordinary course, or other than in the form of a cash
payment.

The election to defer shall be made in the form and
manner determined by the Administrator. 
The total amount of Compensation that is deferred shall be considered as
a contribution by Participant to the Plan for that year.  Additional Participant contributions are not
permitted.

5.2 INITIAL DEFERRAL ELECTION.  In the year the Plan is implemented, a
Participant may make a compensation deferral election within 30 days after the
Plan is effective, which election shall apply to amounts earned after the date
of such election.  In the first year in
which an Employee becomes eligible to be a Participant in the Plan, such
Employee may make a deferral election within the first 30 days after becoming
eligible, which election shall be effective for amounts earned after the end of
such 30 day period.  All determinations
of the applicability of this initial deferral election shall be made consistent
with the provisions of Treasury Regulation Section 1.409A-2(a)(7).

5.3 VESTING OF CONTRIBUTIONS.  Amounts in Participants’ Accounts and the
earnings thereon shall be Vested at all times.

5.4 COMPLIANCE WITH CODE SECTION 409A.  Any election to defer Compensation by a
Participant made pursuant to this Section 5 shall only be permitted to the
extent such election is 

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implemented in a manner consistent with the
requirements of Code Section 409A.  The
Administrator shall establish rules and procedures in this regard that take
into account all requirements established under Code Section 409A regarding the
timing of elections, the date as of which an election must become irrevocable
to be considered a valid election under Code Section 409A, and applicable rules
regarding what Compensation of a Participant is deemed to be earned after the
date a deferral election is made.

SECTION 6 - PARTICIPANTS’ ACCOUNTS.

6.1 MAINTENANCE OF PARTICIPANTS’ ACCOUNTS.  The Administrator shall maintain a separate
Account for each Participant, to which shall be credited the Participant’s
contributions and any increases in value determined under Sections 6.2.  These Accounts shall be for recordkeeping
purposes only and no actual funds will be deposited or set aside for any
individual Participant or for the group of Participants as a whole.

6.2 SHADOW INVESTMENT OF AMOUNTS REPRESENTING
PARTICIPANT DEFERRALS.  At the election
of a Participant and under rules adopted by the Administrator, a Participant’s
Account shall be treated as if it had been used to purchase one or more
specific investments and had participated in the income from and the growth or
decline in value of such investments. 
Each Participant will be required to choose the “shadow investments” for
his or her Account from a list presented by the Plan Administrator.  Except for the default shadow investment in a
hypothetical interest bearing account, as described in the second paragraph of
this Section 6.2, all of the shadow investments shall be securities or mutual
funds which are registered for sale to investors in the United States and for
which valuation quotations are readily available.  Participants will be allowed to change such
designated investments in the manner and frequency determined by the
Administrator.  Changes in value of the
shadow investments shall be credited or charged to Participants’ Accounts as
these changes occur.

If the Participant does not make an election under the
previous paragraph, then for purposes of determining the balance in each
Participant’s Account, such Account shall be credited on a quarterly basis with
a rate of interest with the rate set by the Company at the beginning of each
Plan Year.

6.3 STATEMENTS OF PARTICIPANTS’ ACCOUNTS.  The Administrator shall prepare or have
prepared within a reasonable period of time after the end of each Plan Year a
statement for each Participant of their Account Balance and shall send such
statement to the Participant.

SECTION 7 - DISTRIBUTIONS

7.1 DISTRIBUTIONS FROM THE PLAN.  Before the beginning of each Plan Year, each
Participant shall elect whether the amounts which will or may be contributed or
credited to his or her Account that Year shall be distributed (1) in a lump sum
at a specified date, which must be no earlier than the second calendar year
following the year of deferral, (2) in equal installments beginning at a
specified date, which must be no earlier than the second calendar year
following the year of deferral, or (3) upon separation from service.  Notwithstanding the foregoing, if a
Participant’s separation from service occurs prior to the date all distribution
from the Plan have been made, a distribution of the Participant’s remaining
benefit under the Plan shall be made as 

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soon as practicable, consistent with Section 7.6,
below, following such Participant’s separation from service.  In addition, a Participant’s Account shall be
distributed in the event of the Participant’s (1) death, or (2) Disability.  The Company shall deduct from any payment of
benefits the amount of any federal, state or local income or employment taxes
required to be withheld or paid with respect to the distribution.

7.2 SUBSEQUENT ELECTION TO EXTEND DEFERRAL If
Participant has elected a distribution at or beginning at a specified date
pursuant to Section 7.1, or has made any subsequent election pursuant to this
Section 7.2, then Participant can make a subsequent election to further delay
that distribution, as long as (1) such subsequent election is made at least 12
months before the previously elected distribution date or starting date and (2)
the additional deferral is for a minimum of five years beyond the distribution
date previously chosen.  There is no
limit on the number of times a Participant can further defer a scheduled
distribution, as long as (1) each such further deferral is made at least 12
months in advance of the scheduled distribution date or starting date and (2)
is for a period at least five years beyond the scheduled distribution
date.  Any election to defer a scheduled
distribution must be made in a manner consistent with Code Section 409A and
Treasury Regulation Section 1.409A-2(b). 
For these purposes, an election to receive a distribution in the form of
a series of equal installments shall be treated, to the extent permissible
under Code Section 409A, as an election to receive a single payment that would
be paid as of the date of the commencement of the installment payments.

7.3 HARDSHIP DISTRIBUTIONS.  In the event of Severe Financial Hardship, the
Participant may request that an amount no greater than his or her Vested
Account Balance be paid to him or her in order to satisfy such financial need.  Severe Financial Hardship shall be defined as
(1) resulting from an illness or accident of Participant, Participant’s spouse
or a dependent (as defined in Code Section 152(a); (2) loss of the Participant’s
property due to casualty; or (3) other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the Participant’s
control.  The amount of the distribution
will be limited to the amount needed to satisfy the emergency plus taxes
reasonably anticipated as a result of the distribution.  Distribution will not be allowed to the extent
that the hardship may be relieved through reimbursement or compensation by
insurance or otherwise, or by liquidation of the Participant’s assets (to the
extent that such liquidation would not itself cause a severe financial
hardship).  Any request for a hardship
distribution shall be considered by the Plan Administrator, whose decision
whether to grant such request shall be final. 
Any Participant receiving a hardship distribution will not be permitted
to elect to defer any amount under this Plan for a period of one year from the
date of such distribution.  The
Participant shall not repay to the Company amounts distributed pursuant to this
Section 7.3.  Notwithstanding anything
herein to the contrary, a Participant shall not be considered to have a Severe
Financial Hardship unless the circumstances constitute an “unforeseeable
emergency” as that term is defined in Code Section 409A(a)(2)(B)(ii) and
Treasury Regulation Section 1.409A-3(i)(3), and the amount distributable under
this Section 7.3 shall not be greater than the amount permitted under Code
Section 409A(1)(2)(B)(ii)(II) and Treasury Regulation Section
1.409A-3(i)(3)(ii).

7.4 LOANS. 
Loans from the Plan are not permitted.

7.5 DISTRIBUTION FOR MINOR BENEFICIARY.  In the event a distribution is to be made to
a minor, then the Administrator may direct that such distribution be paid to
the legal guardian, or 

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if none, to a parent of such Beneficiary, or to the
custodian of such Beneficiary under the Uniform Gift to Minors Act or Gift to
Minors Act, if such is permitted by the laws of the state in which said
Beneficiary resides.  Such a payment to
the legal guardian, custodian or parent of a minor Beneficiary shall fully
discharge the Company and Plan from further liability on account thereof.

7.6 COMPLIANCE WITH CODE SECTION 409A.  Notwithstanding anything contained herein to
the contrary, no distribution of benefits shall be made to any Participant if
such distribution would violate the provisions of Code Section 409A(a)(2).  Distribution of a Participant’s Account
shall, therefore, be delayed until such time as the distribution is permissible
under Code Section 409A.  Such a delay in
distribution shall , for example, be required with respect to a distribution to
a Participant who is a “specified employee” (as that term is used for purposes
of Code Section 409A(a)(2)(B)(i) and Treasury Regulation Section 1.409A-1(i))
by reason of such Participant’s separation from service, so that distribution
does not occur before the date which is six months after the date of such
Participant’s separation from service. 
Distribution that may otherwise be permitted under the Plan by reason of
a Participant’s Disability, or because of a Severe Financial Hardship may not
be permitted by reason of the application of this Section 7.6 if the
Participant’s Disability is not attributable to a condition that would cause
such Participant to be considered “disabled” as that term is defined in Code
Section 409A(2)(C), or if the Participant’s Severe Financial Hardship does not
qualify as an “unforeseeable emergency” as that term is defined in Code Section
409A(a)(2)(B)(ii).

7.7 DISTRIBUTION ON CHANGE OF CONTROL.  In the event there is a transaction that
constitutes a “change in the ownership or effective control” of the Company, or
“in the ownership of a substantial portion of the assets” of the Company, that
would be recognized as a permissible distribution event as defined for purposes
of Section 409A(a)(2)(v) of the Code and consistent with Treasury Regulation
Section 1.409A-3(i)(5) (a “Change of Control”), then the portion of each
Participant’s account balance attributable to a Participation Agreement that
specifically elected to have such Participant’s deferred compensation benefit
distributed upon the occurrence of a Change of Control shall be distributed to
such Participant in a single lump sum as soon as practicable following the
occurrence of the Change of Control.

 SECTION 8 -
COMPANY-OWNED LIFE INSURANCE (“COLI”)

8.1 THE COMPANY OWNS ALL RIGHTS.  In the event that, in its discretion, the
Company purchases a life insurance policy or policies insuring the life of any
Participant to allow the Company to informally finance and/or recover, in whole
or in part, the cost of providing the benefits hereunder, neither the
Participant nor any Beneficiary shall have any rights whatsoever therein.  The Company shall be the sole owner and
beneficiary of any such policy or policies and shall possess and may exercise
all incidents of ownership therein, except in the event of the establishment of
and transfer of said policy or policies to a trust by the Company as described
in Section 11 hereof.

8.2 PARTICIPANT COOPERATION.  If the Company decides to purchase a life
insurance policy or policies on any Participant, the Company will so notify
such Participant.  Such Participant shall
consent to being insured for the benefit of the Company and shall take whatever
actions may be necessary to enable the Company to timely apply for and acquire
such life 

 9
 

insurance and to fulfill the requirements of the
insurance carrier relative to the issuance thereof as a condition of
eligibility to participate in the Plan.

8.3 PARTICIPANT MISREPRESENTATION.  If: (a) any Participant is required by this
Plan to submit information to any insurance carrier; and (b) the Participant
makes a material misrepresentation in any application for such insurance; and
(c) as a result of that material misrepresentation the insurance carrier is not
required to pay all or any part of the proceeds provided under that insurance,
then the Participant’s (or the Participant’s Beneficiary’s) rights to any
benefits under this Plan may be, at the sole discretion of the Company, reduced
to the extent of any reduction of proceeds that is paid by the insurance
carrier because of such material misrepresentation.

8.4 SUICIDE. 
Notwithstanding any other term or provision of the Plan or this
Agreement, if a Participant dies by reason of suicide and if the Company’s
receipt of insurance proceeds is as a result reduced, then the Participant’s
(or the Participant’s Beneficiary’s) rights to any benefits under this Plan may
be, at the sole discretion of the Company, reduced to the extent of any
reduction of proceeds that is paid by the insurance carrier.

SECTION 9 - ADMINISTRATOR

9.1 RESIGNATION. 
Any person or entity who has been designated to act as the Plan
Administrator or who is a member of the Committee may resign from such position
at any time by written notice to the Committee, which shall be effective thirty
(30) days after receipt of such notice or such earlier date as agreed to by the
Administrator and the Committee.

9.2 REMOVAL.  Any
person or entity who has been designated to act as the Plan Administrator or
who is a member of the Committee may be removed from such position by the
Committee or the Board with or without advance notice.

9.3 APPOINTMENT OF SUCCESSOR.  If the Administrator resigns or is removed, a
successor shall be appointed, in accordance with Section 9.4, by the effective
date of resignation or removal under this Section 9.  If no such appointment has been made, the
Administrator may apply to a court of competent jurisdiction for appointment of
a successor or for instructions.  All
expenses of the Administrator in connection with the proceeding shall be
allowed as administrative expenses of the Company.

9.4 SUCCESSOR ADMINISTRATOR.  If any person or entity who has been
designated to act as the Plan Administrator or who is a member of the Committee
resigns or is removed in accordance with Section 9.1 or 9.2, the Committee may
appoint any other person as successor Administrator or Committee member.  The appointment shall be effective when
accepted in writing by the new Administrator. 
The new Administrator or Committee member shall have all of the rights
and powers of the former Administrator or Committee member, as the case may be.

SECTION 10 - AMENDMENT AND TERMINATION

10.1 AMENDMENT. 
The Company shall have the right at any time to amend this Plan.  However, no amendment shall be effective so
as to reduce the amount of any contributions already credited to Participant’s
Account, to delay the payment of any amount to a Participant 

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beyond the time that such amount would be payable
without regard to such amendment, or that would cause any income to be
recognized by reason of a violation of Code Section 409A.

10.2 TERMINATION. 
The Company shall have the right to terminate the Plan and distribute
the Participants’ Accounts in the form of a lump sum distribution; provided,
however, that any such termination of the Plan shall be implemented in a manner
that complies with Code Section 409A and that the termination of the Plan does
not reduce the amount already credited to any Participant’s Account.  Participants understand that in the event the
Plan is terminated, the Participants may receive a distribution of their
Accounts at a date that is earlier than would have been the case had the
termination of the Plan not occurred, and the distribution may be made in a
form that differs from the form of distribution that has been elected by the
Participants.

SECTION 11 - MISCELLANEOUS

11.1 NONALIENATION OF BENEFITS.  No right or benefit under this Plan shall be
subject to anticipation, alienation, sale, assignment, pledge, encumbrance, or
charge, and any attempt to anticipate, alienate, sell, assign, pledge,
encumber, or charge any right or benefit under this Plan or any Participation
Agreement shall be void.  No such right
or benefit shall in any manner be liable for or subject to the debts,
contracts, liabilities or torts of the person entitled thereto.  No amount of the benefit will, prior to
payment, be subject to garnishment, attachment, execution or levy of any kind,
and will not be transferable by operation of law in the event of the
bankruptcy, insolvency or death of the employee.  If a Participant or any Beneficiary hereunder
shall become bankrupt, or attempt to anticipate, alienate, sell assign, pledge,
encumber, or charge any right hereunder, then such right or benefit shall, in
the discretion of the Committee, cease and terminate, and in such event, the Committee
may hold or apply the same or any part thereof for the benefit of the
Participant or his or her Beneficiary, spouse, children, or other dependents,
or any of them in such manner and in such amounts and proportions as the Committee
may deem proper.

11.2 UNSECURED LIABILITY.  The obligation of the Company to make
payments hereunder to a Participant shall constitute an unsecured liability of
the Company.  Such payments shall be made
from the general funds of the Company and the Company shall not be required to
establish or maintain any special or separate fund, to purchase or acquire life
insurance on a Participant’s life, or otherwise to segregate assets to assure
that such payments shall be made. 
Neither a Participant nor any other person shall have any interest in
any particular asset of the Company by reason of its obligations hereunder and
the right of any of them to receive payments under this Plan shall be no
greater than the right of any other unsecured general creditor of the Company.  Nothing contained in the Plan shall create or
be construed as creating a trust of any kind or any other fiduciary
relationship between the Company and a Participant or any other person.

11.3 NO CONTRACT OF EMPLOYMENT.  This Plan shall not be deemed to constitute a
contract between the Company and any Participant or to be a consideration or an
inducement for the employment of any Participant or Employee.  Nothing contained in this Plan shall be
deemed to give any Participant or Employee the right to be retained in the
service of the Company or to interfere with the right of the Company to
discharge any Participant or Employee at any time regardless of the effect
which such discharge shall have upon him or her as a Participant of this Plan.

 11
 

11.4 DESIGNATION OF BENEFICIARY.  Each Participant shall file with the Administrator
a notice in writing, in a form acceptable to the Company, designating one or
more Beneficiaries to whom payments becoming due by reason of or after his or
her death shall be made.  Participants
shall have the right to change the Beneficiary or Beneficiaries so designated
from time to time; provided, however, that no such change shall become
effective until received in writing and acknowledged by the Administrator.

11.5 PAYMENT TO INCOMPETENTS.  The Company shall make the payments provided
herein directly to the Participant or Beneficiary entitled thereto or, if such
Participant or Beneficiary has been determined by a court of competent
jurisdiction to be mentally or physically incompetent, then payment shall be
made to the duly appointed guardian or other authorized representative of such
Participant or Beneficiary.  The Company
shall have the right to make payment directly to a Participant or Beneficiary
until it has received actual notice of the incapacity of such Participant or
Beneficiary and actual notice of the appointment of a duly authorized
representative of his or her estate.  Any
payment to or for the benefit of a Participant or Beneficiary shall be a
complete discharge of all liability of the Company therefore.

11.6 INTERPRETATION. 
The interpretation and construction of the Plan by the Administrator,
and any action taken hereunder, shall be binding and conclusive upon all
parties in interest.  No officer or
employee of the Company shall be liable to any person for any action taken or
omitted to be taken in connection with the interpretation, construction or
administration of the Plan, so long as such action or omission be made in good
faith.

11.7 AUTHORITY TO APPOINT A COMMITTEE.  The Board, within its discretion, shall have
the authority to appoint a committee of one (1) or more of its members, which
shall have authority over the Plan in lieu of the entire Board.  Unless otherwise determined by the Board, the
Company’s Compensation Committee shall serve as the Committee.

11.8 AUTHORITY TO ESTABLISH A TRUST.  The Company shall have the right at any time
to establish a trust to which the Company may transfer from time to time
certain assets to be used by the trustee(s) to satisfy some or all of the
Company ‘s obligations and liabilities under the Plan.  All assets held by such trust shall be
subject to the claims of the Company’s creditors in the event of the Company’s
Insolvency (as defined herein).  The
Company shall be considered “Insolvent” for purposes of the trust if: (a) the
Company is unable to pay its debts as they become due; or (b) the Company is
subject to a pending proceeding as a debtor under the United States Bankruptcy
Code.

11.9 BINDING EFFECT. 
Obligations incurred by the Company pursuant to this Plan shall be
binding upon and inure to the benefit of the Participant, his or her
Beneficiaries, personal representatives, heirs, and legatees.

11.10 ENTIRE PLAN. 
This document and any amendments hereto contain all the terms and
provisions of the Plan and shall constitute the entire Plan, any other alleged
terms or provisions being of no effect.

11.11 MERGER, CONSOLIDATION OR ACQUISITION.  In the event of a change in control of the
Company, the obligations and responsibilities of the Company under this Plan
shall be 

 12
 

assumed by any such successor or acquiring corporation
or entity, and all of the rights, privileges and benefits of the Participants
hereunder shall continue.

SECTION 12 - CONSTRUCTION

12.1 CONSTRUCTION OF THIS PLAN.  This Plan shall be construed and enforced
according to the laws of the Commonwealth of Pennsylvania, other than its laws
respecting choice of law.

12.2 GENDER AND NUMBER.  The masculine gender, where appearing in the
Plan, shall be deemed to include the feminine gender, and the singular shall
include the plural, unless the context clearly indicates to the contrary.

12.3 HEADINGS. 
All headings used in this Plan are for convenience of reference only and
are not part of the substance of this Plan.

12.4 ENFORCEABILITY. 
If any term or condition of this Plan shall be invalid or unenforceable
to any extent or in any application, then the remainder of the Plan, and such
term or condition except to such extent or in such application, shall not be
affected thereby, and each and every term and condition of the Plan shall be
valid and enforced to the fullest extent and in the broadest application
permitted by law.

12.5 UNIFORMITY. 
All provisions of this Plan shall be interpreted and applied in a
uniform, nondiscriminatory manner.  In
the event of any conflict between the terms of this Plan and any summaries or
other descriptions of this Plan, the Plan provisions shall control.

IN WITNESS WHEREOF, this Plan, having been duly
approved and adopted by Orleans Homebuilders, Inc., is executed by a duly
authorized officer of the Company.

	
  

  	
  Orleans Homebuilders, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  MICHAEL T. VESEY

  
	
   

  	
   

  	
  Michael T. Vesey, President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  LAWRENCE J.
  DUGAN

  	
   

  	
   

  	
   

  
	
  Lawrence J.
  Dugan, Secretary

  	
   

  	
   

  
				

 

 13EXHIBIT
10.3

ORLEANS HOMEBUILDERS,
INC.

INCENTIVE COMPENSATION PLAN

(Amended and Restated Effective July 1, 2002

and Further Amended Effective October 1, 2003, July 1, 2007 and September 27,
2007)

Purpose

The Orleans Homebuilders, Inc. Incentive Compensation
Plan, as herein amended and restated (the “Plan”), is an amendment and
restatement of the incentive compensation plan originally adopted by the
Company on July 18, 1994, and as previously in effect.  The Plan is designed to reward those
executives and key employees of Orleans Homebuilders, Inc., a Delaware
corporation (the “Company”) and its affiliates who are designated as
Participants for achieving corporate performance objectives, and to provide, in
particular, a performance incentive for these executives and key employees that
is linked to the Company’s operating financial performance.

ARTICLE I - DEFINITIONS

1.1           “Board”
shall mean the Board of Directors of the Company.

1.2           “Code”
shall mean the Internal Revenue Code of 1986, as amended (the “Code”).

1.3           “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.

1.4           “Covered
Employee” shall mean, with respect to any fiscal year of the Company, each
officer, other than the chief executive officer, whose compensation for such
fiscal year is required to be disclosed to shareholders in the proxy statement
relating to the annual meeting of stockholders of the Company held during the
next fiscal year pursuant to the executive compensation disclosure rules
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended.

1.5           “Net
Pre-Tax Profits” shall mean the Company’s consolidated operating profits
determined before taxes and without taking into account nonrecurring items,
income or loss arising from extraordinary items, discontinued operations, debt
repurchase at a discount, or any amounts paid or accrued pursuant to the Plan.  The Company shall determine the Company’s Net
Pre-Tax Profits applying for these purposes generally accepted accounting
principles.

1.6           “Participant”
shall mean the following persons:

(a)           Jeffrey
P. Orleans, Chairman of the Board and Chief Executive Officer of the Company;

(b)           Benjamin
D. Goldman, Vice Chairman of the Board;

(c)           Michael
T. Vesey, President and Chief Operating Officer; and

(d)           Such
other of the Company’s officers (within the meaning of Section 16(a) under the
Securities Exchange Act of 1934, as amended) and other key employees as may be
designated as Participants in the Plan by the Committee.

1.7           “Performance
Period” shall mean the Plan Year.

1.8           “Plan
Year” shall mean the Company’s fiscal year, beginning on July 1 and ending on
June 30.

ARTICLE II - ELIGIBILITY
AND PARTICIPATION

2.1           Participation
in the Plan for a Plan Year shall be open to those employees who are designated
as Participants pursuant to the Plan or by action of the Committee from time to
time.

2.2           If
a Participant has not been a Participant for a full Plan Year, such Participant’s
benefits payable under the Plan, if any, shall be limited to a pro-rata portion
of the benefit otherwise payable for such Plan Year based on the portion of the
Plan Year such Participant was a Participant in the Plan.

ARTICLE III - PERFORMANCE
GOAL

No amount shall be payable pursuant to the Plan with
respect to a Plan Year unless the Company has Net Pre-Tax Profits for such Plan
Year.

ARTICLE IV -
DETERMINATION OF BONUS AWARDS

4.1           As
soon as practicable following the end of a Performance Period, the Committee
shall determine whether the Company has any Net Pre-Tax Profits, and shall, if
there are such Net Pre-Tax Profits, determine the amount payable pursuant to
the Plan, as set forth below:

(a)           The
bonus payable to Jeffrey P. Orleans for each Plan Year shall be equal to three
percent (3%) of the Company’s Net Pre-Tax Profit for such Plan Year.

(b)           The
bonus payable to Michael T. Vesey for each Plan Year shall be equal to one and
one-half percent (11⁄2%) of the Company’s Net Pre-Tax Profit for such Plan Year.

(c)           Subject
to Section 4.2, the bonus payable to each other Participant for each Plan Year
shall be determined by the Committee; provided, however, that in no event shall
the bonus payable to any such other Participant in any Plan Year exceed one and
one-half percent (11⁄2%) of the Company’s Net Pre-Tax Profits for the Plan Year.

(d)           Notwithstanding
any other provisions of the Plan, the aggregate payments to Participants under
the Plan with respect to any Plan Year shall not exceed (and may be less than)
eight percent (8%) of the Company’s Net Pre-Tax Profits for such Plan
Year.  The Committee shall take this
aggregate payment amount into account in its determination of the aggregate
bonus amount awarded pursuant to Section 4.1(c).

 2
 

4.2           The
Committee shall have no discretion to increase the maximum bonus payable to any
Participant under the Plan, but shall have the right and obligation to reduce
the amount of or totally eliminate one or more such bonuses (other than the
bonuses payable to Messrs. Orleans and Vesey) so as to cause the aggregate
amount of bonuses payable under the Plan with respect to a Plan Year to not
exceed eight percent (8%) of the Company’s Net Pre-Tax Profits for the Plan
Year).

4.3           Notwithstanding
anything to the contrary in this Article IV, no amount shall be payable under
the Plan to any Participant who is not employed by the Company or an affiliate
of the Company as of the date payment is to be made unless the Participant’s
termination of employment is attributable to the Participant’s death,
disability, or retirement.

ARTICLE V - PAYMENT OF
AWARDS

5.1           Approved
bonus awards shall be payable by the Company in cash to each Participant, or to
his estate in the event of his death, in a single payment or in installments,
after the end of each Performance Period, but only after the Committee has
certified in writing that the relevant performance goal for the Plan Year has
been achieved; provided, however, that with respect to any payments the
Committee determines are to be paid notwithstanding the Participant’s
termination of employment, such payments shall in all events be made in a lump
sum paid no later than two and one-half months after the end of the calendar
year in which the Participant’s right to such bonus award became vested.

5.2           If
a bonus award is payable to a Participant who is no longer employed by the
Company or an affiliate of the Company by reason of such Participant’s death,
disability or retirement, the amount of the bonus award payable to such
Participant shall be reduced to reflect the portion of the year the Participant
was a Participant in the Plan, as provided in Section 2.2, above.

5.3           Notwithstanding
anything herein to the contrary, the Committee may, at its discretion, provide
for the payment of all or of any portion of an approved bonus award to a
Participant by a transfer to such Participant of shares of the Company’s Common
Stock, par value $.10 (the “Shares”), subject to the following terms and
conditions:

(a)           The number of Shares
transferred in lieu of cash shall be determined by reference to a per share
exchange equal to a price that is at least 75%, and is no more than 100%, of
the closing price of such shares on the first business day following the end of
the Performance Period to which the bonus award relates.

(b)           The Shares shall be in
the form of an Award granted under the Company’s Stock Award Plan.

(c)           The terms of the Award
shall be subject to such requirements as to vesting of the Shares, conditions
of forfeiture and restrictions on transfer or disposition as the Committee
deems appropriate, at its sole discretion.

(d)           The provisions of this
Section 5.3 shall not become effective with respect to any Participant who is a
Covered Employee until the first Performance Period that commences 

 3
 

following the adoption of this Amendment, except to
the extent that the compensation payable to such Covered Employee would not be
subject to the limitations on deductibility imposed on the Company pursuant to
Section 162(m) of the Code.

ARTICLE VI - OTHER TERMS
AND CONDITIONS

6.1           No
bonus award shall be paid under the Plan unless and until the material terms
have been disclosed to and approved by the Company’s shareholders by a majority
of votes cast in a separate vote, either in person or by proxy, including
abstentions to the extent abstentions are counted as voting under applicable
state law, such requirements to be interpreted in a manner consistent with the
applicable provisions of Treasury Regulation Section 1.162-27, promulgated pursuant
to Section 162(m) of the Code.

6.2           No
person shall have any legal claim to be granted an award under the Plan and the
Committee shall have no obligation to treat Participants uniformly. 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.

6.3           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.

6.4           The
Company or any of its subsidiaries may deduct from any award any applicable
withholding taxes or any amounts owed by the employee to the Company or any of
its subsidiaries.

ARTICLE VII -
ADMINISTRATION

7.1           All
members of the Committee shall be persons who qualify as “outside directors” as
defined under Section 162(m) of the Code.

7.2           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.

7.3           Except
with respect to matters which under Section 162(m)(4)(C) of the Code are
required to be determined in the sole and absolute discretion of the Committee,
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.

7.4           The
Committee may rely on opinions, reports or statements of officers or employees
of the Company or any subsidiary thereof and of Company counsel (inside or
retained counsel), public accountants and other professional or expert persons.

 4
 

7.5           The
Board reserves the right to amend or terminate the Plan in whole or in part at
any time. Unless otherwise prohibited by applicable law, any amendment required
to conform the Plan to the requirements of Section 162(m) of the Code may be
made by the Committee. No amendment may be made to the class of individuals who
are eligible to participate in the Plan, the performance criteria specified in
Article III or the maximum bonus payable to any Participant as specified in
Sections 4.1 and 4.2 without shareholder approval, unless shareholder approval
is not required in order for bonuses paid to Covered Employees to constitute
qualified performance-based compensation under Section 162(m) of the Code.

7.6           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.

7.7           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.

 5

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