Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this
“Agreement”) is made effective as of the 14th day of
March, 2005 (the “Effective Date”) by and between
BEAZER HOMES USA, INC., a Delaware corporation (the
“Company”), and Kenneth J. Gary, an individual resident
of the State of Georgia (“Executive”).
WITNESSETH:
WHEREAS, the
Company wishes to employ the Executive, and the Executive wishes to
accept employment with the Company, on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the
premises and of the mutual covenants and agreements herein
contained, the Company and Executive hereby agree as
follows:
1.
Employment and
Duties .
(a)
The Company hereby agrees to employ Executive for the Term (as
hereinafter defined) as its Executive Vice President, General
Counsel and Corporate Secretary. If requested by the Board of
Directors of the Company (the “Board”), Executive shall
also serve on the Board without additional compensation.
Executive shall also serve, if requested by the Board, as an
executive officer and/or director of any subsidiaries and/or
affiliated companies and shall comply with the policy of the
Compensation Committee of the Board (the “Compensation
Committee”) with regard to retention or forfeiture of any
director’s fees. As used in this Agreement, the term
“affiliated companies” shall include any company
controlled by, controlling or under common control with the
Company.
(b)
The Executive shall have such management and oversight
responsibilities and authority as are necessary to efficiently
administer the affairs of the Company and as are customary of an
Executive Vice President, General Counsel and Corporate
Secretary. All powers herein granted to the Executive are
subject to supervisory approval of the Board and of the President
and Chief Executive Officer of the Company (the “CEO”),
and the Executive may be given such further reasonably related
supervisory duties, powers and prerogatives as may be delegated to
him from time to time by said Board and/or the CEO. The
Executive shall report exclusively to the CEO and the Board and
further shall render such advice to the CEO and Board as said CEO
and/or Board may from time to time request.
(c)
During the Term, and excluding any periods of vacation and sick
leave to which the Executive is entitled, Executive shall devote
substantially all of his business time and efforts to the business
and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder,
use the Executive’s reasonable best efforts to perform
faithfully such responsibilities. In performing such duties
hereunder, Executive shall comply with the policies and procedures
as adopted from time to time by the Board, shall give the Company
the benefit of his special knowledge, skills, contacts and business
experience, shall perform his duties and carry out his
responsibilities hereunder in a diligent manner.
(d)
During the Employment Term, it shall not be a violation of this
Agreement for the Executive to (i) with the prior approval of the
Board in each case, serve on corporate, civic or charitable boards
or committees, (ii) with the prior approval of the Board in each
case, deliver lectures, fulfill speaking engagements or teach at
educational institutions, and (iii) manage personal investments, so
long as such activities do not significantly interfere or
constitute a conflict of interest with the performance of the
Executive’s responsibilities as an employee of the Company in
accordance with this Agreement.
(e)
The principal location for performance of Executive’s
services hereunder shall be at the offices of Beazer Homes USA,
Inc. in Atlanta, Georgia, subject to reasonable travel
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requirements
during the course of such performance. Executive shall not
be required, without his consent, to regularly report to any office
of the Company which is located more than thirty-five (35) miles
from the Company’s current office location, provided
Executive will be expected to travel to the extent reasonably
necessary to fulfill his responsibilities.
2.
Employment
Term. The term of Executive’s
employment hereunder (the “Term”) shall commence
effective as of the date hereof and shall end on March 13, 2007,
unless sooner terminated as provided herein; provided ,
however ; that the Term shall automatically be extended for
successive one year periods unless: (i) this Agreement is
terminated as otherwise provided herein; or (ii) Executive or the
Company provides written notice to the other of such party’s
desire not to extend the Term at least sixty (60) days prior to the
scheduled expiration of the Term as then in effect.
3.
Compensation and
Benefits
(a)
Base Salary
. During the Term, the Executive shall receive an annual base
salary (“Annual Base Salary”) in the amount of
$375,000, payable in accordance with the Company’s normal
payroll practices (but not less frequently than monthly). During
the Term, the Annual Base Salary shall be reviewed by the
Compensation Committee (for purposes of increase only) at least
annually. Any increase in Annual Base Salary shall not serve to
limit or reduce any other obligation to the Executive under this
Agreement. Annual Base Salary shall not be reduced after any such
increase and the term Annual Base Salary as utilized in this
Agreement shall refer to Annual Base Salary as so increased.
Notwithstanding anything contained herein to the contrary, in the
event that the Company shall implement a Company-wide reduction in
executive base compensation, then, solely for such purpose and only
during the continuation of such Company-wide reduction, the Company
shall have the right to reduce the Annual Base Salary then payable
hereunder in a manner that is consistent with said Company-wide
reduction.
(b)
Bonuses; Stock Incentive
Plans . Executive will be eligible to and shall
participate in the Company’s bonus and stock incentive plans
at the discretion of the Compensation Committee of the Board. The
amount and terms of, and the targets, conditions and restrictions
applicable to each bonus or other incentive award shall be subject
to the provisions of any such plan and of the applicable award
letter duly executed and delivered by the Company.
(c)
Incentive, Savings and
Retirement Plans . During the Term, the Executive
shall be entitled to participate in all incentive, savings and
retirement plans, practices, policies and programs applicable
generally to other most senior executives of the Company and its
affiliated companies.
(d)
Welfare Benefit
Plans . During the Term, the Executive and/or the
Executive’s family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the
Company and its affiliated companies (including, without
limitation, medical, prescription, dental, disability, employee
life, group life, accidental death and travel accident insurance
plans and programs) to the extent applicable generally to other
most senior executives of the Company and its affiliated
companies.
(e)
Expenses . The
Company will pay or reimburse Executive for all reasonable and
necessary out-of-pocket expenses incurred by him in the performance
of his duties under this Agreement. Executive shall keep detailed
and accurate records of expenses incurred in connection with the
performance of his duties hereunder and reimbursement therefore
shall be in accordance with policies and procedures to be
established from time to time by the Board.
(f)
Office and Support
Staff . During the Term, the Executive shall
be entitled to an office or offices of a size and with furnishings
and other appointments, and to secretarial and other assistance,
consistent with the Executive’s position and title.
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(g)
Vacation
. During the Term, Executive shall be entitled to twenty (20)
working days of compensated vacation in each fiscal year, to be
taken at times which do not unreasonably interfere with the
performance of Executive’s duties hereunder. Any unused
vacation time from any fiscal year shall be subject to accumulation
or forfeiture in accordance with Company policy as in effect from
time to time.
4.
Termination of
Employment .
(a)
Death or
Disability . The Executive’s employment shall
terminate automatically upon the Executive’s death during the
Term. If the Disability of the Executive occurs during the Term
(pursuant to the definition of Disability set forth below), the
Company may give to the Executive written notice in accordance with
Section 10(c) of this Agreement of its intention to terminate the
Executive’s employment. In such event, the Executive’s
employment with the Company shall terminate effective on the 30th
day after receipt of such notice by the Executive (the
“Disability Effective Date”), provided that, within the
30 days after such receipt, the Executive shall not have returned
to full-time performance of the Executive’s duties. For
purposes of this Agreement, “Disability” shall mean the
absence of the Executive from the Executive’s duties with the
Company on a full-time basis for 120 consecutive business days as a
result of incapacity due to mental or physical illness which is
determined to be total and permanent by a physician selected by the
Company or its insurers and acceptable to the Executive or the
Executive’s legal representative.
(b)
Cause . The
Company may terminate the Executive’s employment for Cause.
For purposes of this Agreement, “Cause” shall mean:
(i)
any act or failure to act by Executive done with the intent to harm
in any material respect the financial interests or reputation of
the Company or any affiliated companies;
(ii)
Executive being convicted of (or entering a plea of guilty or
nolo contendere to)
a felony (other than a felony involving a motor vehicle);
(iii)
Executive’s dishonesty, misappropriation or fraud with regard
to the Company or any affiliated companies (other than good faith
expense account disputes);
(iv)
a grossly negligent act or failure to act by Executive which has a
material adverse affect on the Company or any affiliated
companies;
(v)
the material breach by Executive of his agreements or obligations
under this Agreement which has a material adverse effect on the
Company, which breach, if curable, is not cured by Executive within
fifteen (15) days after written notice from the Company which
specifically identifies the material breach which the Company
believes that Executive has committed; or
(vi)
the continued refusal to follow the directives of the CEO or the
Board or their designees which are consistent with
Executive’s duties and responsibilities identified in Section
1 hereof; provided that the foregoing refusal shall not be
“cause” if Executive in good faith believes that such
direction is illegal, unethical or immoral and promptly so notifies
the CEO or Board, as the case may be, in writing.
(c)
Notice of
Termination . Any termination by the Company
for Cause shall be communicated by Notice of Termination to the
Executive given in accordance with Section 10(c)
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of this Agreement. For
purposes of this Agreement, a “Notice of Termination”
means a written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated and
(iii) if the Date of Termination (as defined below) is other than
the date of receipt of such notice, specifies the termination date
(which date shall be not more than thirty days after the giving of
such notice). The failure by the Company to set forth in the Notice
of Termination any fact or circumstance which contributes to a
showing of Cause shall not waive any right of the Company hereunder
or preclude the Company from asserting such fact or circumstance in
enforcing the Company’s rights hereunder.
(d)
Date of
Termination . “Date of Termination”
means (i) if the Executive’s employment is terminated by the
Company for Cause, the date of receipt of the Notice of Termination
or, subject to applicable cure periods, any later date specified
therein, as the case may be, (ii) if the Executive’s
employment is terminated by the Company other than for Cause or
Disability, the Date of Termination shall be the date on which the
Company notifies the Executive of such termination and (iii) if the
Executive’s employment is terminated by reason of death or
Disability, the Date of Termination shall be the date of death of
the Executive or the Disability Effective Date, as the case may
be.
6.
Obligations of the Company
upon Termination .
(a)
Other Than for
Cause . If, during the Term, the Company shall
terminate the Executive’s employment other than for
Cause:
(i)
the Company shall pay to the Executive in a lump sum in cash within
30 days after the Date of Termination the aggregate of the
following amounts: (1) the Executive’s Annual Base Salary
through the Date of Termination to the extent not theretofore paid,
(2) any accrued but unpaid annual bonus (“Annual
Bonus”) respecting any completed fiscal year ending prior to
the Date of Termination, (3) the product of (x) the Average Annual
Bonus (hereinafter defined) and (y) a fraction, the numerator of
which is the number of days in the current fiscal year through the
Date of Termination, and the denominator of which is 365 and (4)
any compensation previously deferred by the Executive (together
with any accrued interest or earnings thereon) and any accrued
vacation
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