March 21, 2007
[Name and address]
Dear [ ]:
We are pleased to offer you (“you” or “Employee”) the following retention bonus agreement (the “Agreement”). The purpose of this Agreement is to reward you for your continued service to Dominion Homes, Inc. (the “Company”).
The terms of this Agreement are as follows:
1. Period of this Agreement. This Agreement will commence effective as of January 1, 2007, and will end on December 31, 2007 (“Agreement Period”), provided, however, that Section 6 (Confidentiality) of this Agreement shall survive the expiration or termination of this Agreement. This Agreement is not renewable unless expressly agreed in writing between you and the Company, and it does not guarantee your employment for any specific period of time. The Company reserves the right to terminate you at any time and for any or no reason, subject to the provisions of your Employment Agreement with the Company dated , as amended (the “Employment Agreement”).
2. Retention Bonus Payments. Subject to the terms and conditions of Section 4 of this Agreement, the Company will provide you with a retention bonus (“Retention Bonus”) in the gross amount of $ , which represents 25% of your annual base salary as of the effective date of this Agreement. The Retention Bonus shall be payable as follows: $ (representing 10% of the Retention Bonus) to be paid on or about each of March 31, 2007, June 30, 2007 and September 30, 2007, with $ (representing 70% of the Retention Bonus) to be paid on December 31, 2007. You must remain actively employed and in compliance with the Company’s policies and directives concerning job performance and conduct as of each payout date in order to earn and receive your Retention Bonus payment. The Retention Bonus payments made under this Agreement are subject to regular tax withholdings and other authorized deductions.
3. Termination of Employment.
(a) Termination by the Company without Cause . In the event that the Company terminates your employment without Cause (as defined herein) during the Agreement Period, you shall be entitled to receive a pro rata Retention Bonus payment based on service completed during the Agreement Period, less any Retention Bonus payments previously paid. This amount shall be payable within fourteen (14) days after the termination date, subject to any deferral required by Section 409A of the Internal Revenue Code, and shall be in addition to any amounts you may be entitled to receive under your Employment Agreement. For example, if your
employment is terminated by the Company without Cause on July 31, 2007, you shall be entitled to receive a pro rata Retention Bonus payment equal to 7/12 of your total Retention Bonus amount, less withholdings and the amount of Retention Bonus payments made on March 31, 2007 and June 30, 2007.
(b) Resignation by Employee or Termination by the Company for Cause. In the event that you resign or the Company terminates your employment for Cause during the Agreement Period, you will not be entitled to receive any unearned and unpaid portion of your Retention Bonus payment. For example, if you resign or the Company terminates you for Cause on June 29, 2007, assuming you have received your March 31, 2007 Retention Bonus