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
