EXHIBIT 10.2
ORLEANS HOMEBUILDERS, INC.
EXECUTIVE COMPENSATION DEFERRAL PLAN
(EFFECTIVE AS OF JUNE 1, 2005)
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 on or before December 31, 2006, or at such other time or times,
the Plan will be amended or amended and restated retroactively to
January 1, 2005, as provided in Internal Revenue Service Notice 2005-1
("Notice 2005-1"), or pursuant to other guidance as may be issued by
the IRS and/or the Treasury Department, if necessary in order that the
Plan be in compliance with Section 409A.
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.
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, or any committee of
such Board that is authorized to oversee, administer and amend the Plan. Any
reference herein to the "Committee" shall be deemed to be a reference to the
Board, or to such administrative committee as may be established by the Board to
administer the Plan in its stead.
2.6 "Change of Control" means a transaction or event that is a "Change of
Control" as defined in Section 7.7.
2.7 "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.
2.8 "Compensation" means the total amount of salary and bonus earned each year
by a Participant.
2.9 "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 and health plan covering
employees of the Company. The Disability of a Participant shall be determined by
a licensed physician selected by the Company.
2.10 "Eligible Employee" means an Employee who has been designated as eligible
to participate in the Plan.
2.11 "Employee" means an employee of the Company.
2.12 "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 individual shall continue to be a
Participant as long as there is an Account Balance for that person.
2.13 "Participation Agreement" means a written agreement between a Participant
and the Company in substantially the form attached hereto as Exhibit A.
2.14 "Plan" means the Orleans Homebuilders, Inc. Executive Compensation Deferral
Plan, as contained in this instrument, including all amendments thereto.
2.15 "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.
2.16 "Termination" means the ending of employment with the Company.
2.17 "Vested" means the nonforfeitable portion of any Account maintained on
behalf of a Participant.
2
SECTION 3 - PLAN ADMINISTRATION
3.1 POWERS AND DUTIES OF THE ADMINISTRATOR. The Board shall appoint the Plan
Administrator, who 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.
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;
(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
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.
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.
4
SECTION 4 - ELIGIBILITY AND PARTICIPATION
4.1 ELIGIBILITY. The Company, in its sole discretion, shall select the Employees
who are eligible to become Participants.
4.2 PARTICIPATION. The Company 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 Company 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
understood 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.
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 the
foregoing to the contrary, a participant may elect to defer only up to 50% of
any bonus paid in 2006.
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 date of such election.
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 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.
5
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 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. [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.]
6
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.
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 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 may, therefore, be delayed until such
time as the distribution is permissible under Code Section 409A. Such a delay in
distribution may, 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)) 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 (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.
7
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 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. The Administrator may resign at any time by written notice to
the Board, which shall be effective thirty (30) days after receipt of such
notice unless the Administrator and the Board agree otherwise.
9.2 REMOVAL. The Administrator may be removed by the Board on thirty (30) days
notice or upon shorter notice accepted by the Administrator.
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.
8
9.4 SUCCESSOR ADMINISTRATOR. If the Administrator resigns or is removed in
accordance with Section 9.1 or 9.2, the Board may appoint any third party as
successor Administrator. The appointment shall be effective when accepted in
writing by the new Administrator. The new Administrator shall have all of the
rights and powers of the former Administrator.
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 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 Company, cease and terminate, and in such event, the
Company 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 Company
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.
9
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.
11.4 DESIGNATION OF BENEFICIARY. Each Participant shall file with the Company 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 Company.
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 physical or mental 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.
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.
10
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 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: Benjamin D. Goldman
-----------------------------------
Benjamin D. Goldman, Vice Chairman
Attest:
Lawrence J. Dugan
- ----------------------------
Lawrence J. Dugan, Secretary
11