THIS EMPLOYMENT
AGREEMENT (this “Agreement”) is entered into effective
as of October 1, 2003 (the “Effective Date”), by
and between ORIGEN FINANCIAL, INC., a Delaware corporation
(“Parent”), ORIGEN FINANCIAL L.L.C., a Delaware limited
liability company (“Origen”), and PAUL GALASPIE (the
“Executive”).
WHEREAS, Origen
desires to employ the Executive, and the Executive desires to be
employed by Origen, on the terms and subject to the conditions set
forth below.
NOW, THEREFORE, in
consideration of the mutual promises contained in this Agreement,
the parties agree as follows:
(a) Origen
agrees to employ the Executive and the Executive accepts the
employment, on the terms and subject to the conditions set forth
below. During the term of employment hereunder, the Executive shall
serve as the Senior Vice President and Chief Technology Officer of
Origen, and shall do and perform diligently all such services, acts
and things as are customarily done and performed by the Senior Vice
President and Chief Technology Officer of companies in similar
business and in size to Origen, together with such other duties as
may reasonably be requested from time to time by the Board of
Managers of Origen (the “Board”), which duties shall be
consistent with the Executive’s positions as set forth above.
Executive shall also serve as the Senior Vice President and Chief
Technology Officer of Parent without additional compensation
therefor.
(b) For
service as an officer and employee of Origen, the Executive shall
be entitled to the full protection of the applicable
indemnification provisions of the Certificate of Organization and
Operating Agreement of Origen, as they may be amended from time to
time.
Subject
to the provisions for termination provided below, the term of the
Executive’s employment under this Agreement shall commence on
the date of this Agreement and shall continue thereafter until
December 31, 2006; provided however, that the term of this
Agreement shall be automatically extended for successive terms of
one year each, unless either party notifies the other party in
writing of its desire to terminate this Agreement at least
180 days before the end of the term then in effect.
3.
Devotion to Origen’s Business .
The
Executive shall devote his entire productive time, ability and
attention to the business of Origen and Parent during the term of
this Agreement; however, the expenditure of reasonable amounts of
time to various charitable and other community activities, or to
the Executive’s own personal investments and projects,
provided the amount of time so devoted does
not materially
impair, detract or adversely affect the performance of the
Executive’s duties under this Agreement, shall not be deemed
a breach of this Agreement.
(a) During
the term of this Agreement, Origen shall pay or provide, as the
case may be, to the Executive the compensation and other benefits
and rights set forth in Sections 4, 5 and 6 of this
Agreement.
(b)
Base Compensation . As compensation for the services to be
performed hereafter, Origen shall pay to the Executive, during his
employment hereunder, a base salary (the “Base Salary”)
payable in accordance with Origen’s usual pay practices (and
in any event no less frequently than monthly) at the rate
of:
(i) $160,000 for
the period beginning on the Effective Date and ending December 31,
2004;
(ii) $170,000 for
the year ending December 31, 2005; and
(iii) $185,000 for
the year ending December 31, 2006.
(c)
Annual Salary Increase . In the event that the term of this
Agreement is automatically extended pursuant to Section 2, the
Base Salary then in effect shall be increased by five percent (5%)
of the Base Salary for the immediately prior year or such greater
increase as may be deemed appropriate by the Board, in its sole
discretion.
(d)
Incentive Compensation . Executive shall be eligible to
receive an award under any bonus plan adopted by the Board of
Parent which may be established for the payment of an annual
incentive bonus to the Executive on the terms and conditions set
forth therein and shall also be eligible to receive such other
bonus as determined by Parent’s Board or compensation
committee (collectively, “Incentive
Compensation”).
(e)
Disability . During any period that the Executive fails to
perform his duties hereunder as a result of incapacity due to
physical or mental illness (the “Disability Period”),
the Executive shall continue to receive his full Base Salary,
bonuses and other benefits at the rate in effect for such period
until his employment is terminated by Origen pursuant to Section
7(a)(iii) hereof; provided, however, that payments so made to the
Executive during the Disability Period shall be reduced by the sum
of the amounts, if any, which were paid to the Executive at or
prior to the time of any such payment under disability benefit
plans of Origen.
(a)
Insurance . Origen shall provide to the Executive life,
disability, medical, hospitalization and dental insurance for
himself, his spouse and eligible family members as may be
determined by the Board to be consistent with industry
standards.
(b)
Benefit Plans . The Executive, at his election, may
participate, during his employment hereunder, in all retirement
plans, 401(K) plans and other benefit plans of Origen
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generally
available from time to time to other executive employees of Origen,
Parent or their subsidiaries (the “Subsidiaries”) and
for which the Executive qualifies under the terms of the plans (and
nothing in this Agreement shall or shall be deemed to in any way
affect the Executive’s right and benefits under any such plan
except as expressly provided herein). The Executive shall also be
entitled to participate in any equity, stock option or other
employee benefit plan that is generally available to senior
executives, as distinguished from general management, of Origen,
Parent or the Subsidiaries. The Executive’s participation in
and benefits under any such plan shall be on the terms and subject
to the conditions specified in the governing document of the
particular plan.
(c)
Annual Vacation . The Executive shall be entitled to four
weeks vacation time each year without loss of compensation. The
Executive may be absent from his employment for vacation on dates
to be mutually agreed upon by Origen and the Executive, and
approval of Origen shall not be unreasonably withheld. In the event
that the Executive is unable for any reason to take the total
amount of vacation time authorized herein during any year, he may
accrue such unused time and add it to the vacation time for any
following year. Upon any termination of this Agreement for any
reason whatsoever, accrued and unused vacation time shall be paid
to the Executive within ten days of such termination based on the
Base Salary in effect on the date of such termination; provided,
however, that no more than 20 days of accrued vacation time
may be carried over at any time.
6.
Reimbursement of Business Expenses .
Origen
shall reimburse the Executive or provide him with an expense
allowance during the term of this Agreement for travel,
entertainment, business development and other expenses reasonably
and necessarily incurred by the Executive in connection with
Origen’s business. The Executive shall furnish such
documentation with respect to reimbursement to be paid hereunder,
as Origen shall reasonably request.
7.
Termination of Employment .
(a) The
Executive’s employment under this Agreement may be
terminated:
(i) by either the
Executive or Origen at any time for any reason whatsoever or for no
reason upon not less than 60 days written notice;
(ii) by Origen at
any time for “cause” as defined below, without prior
notice;
(iii) by Origen
upon the Executive’s “permanent disability” (as
defined below) upon not less than 30 days written notice;
and
(iv) upon the
Executive’s death.
(b) For
purposes hereof, for “cause” shall mean the material
breach of any provision of this Agreement by the Executive which
breach, if curable, continues uncured for a period of 20 days
after the Executive’s receipt of written notice of such
breach from Origen, or any action of the Executive (or the
Executive’s failure to act), which, in the
reasonable
3
determination
of the Board of Parent or the Board of Origen, involves
malfeasance, fraud, or moral turpitude, or which, if generally
known, would or might have a material adverse effect on Origen,
Parent and/or either of its reputation.
(c) For
purposes hereof, the Executive’s “permanent
disability” shall be deemed to have occurred after 120
consecutive days during which the Executive, by reason of his
physical or mental disability or illness, shall have been unable to
discharge his duties under this Agreement. The date of permanent
disability shall be such 121 st day. In the event either Origen or the
Executive, after receipt of notice of the Executive’s
permanent disability from the other, disputes that the
Executive’s permanent disability shall have occurred, the
Executive shall promptly submit to a physical examination by the
chief of medicine of any major accredited hospital in Michigan and,
unless such physician shall issue his written statement to the
effect that in his opinion, based on his diagnosis, the Executive
is capable of resuming his employment and devoting his full time
and energy to discharging his duties within 30 days after the,
date of such statement, such permanent disability shall be deemed
to have occurred.
8.
Compensation Upon Termination or Disability .
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