EXHIBIT 10.3
EMPLOYEE MATTERS AGREEMENT
EMPLOYEE
MATTERS AGREEMENT, dated as of August 10, 2009 (this “
Agreement ”), by and between OCWEN FINANCIAL
CORPORATION, a Florida corporation (“ OCWEN ”),
and ALTISOURCE SOLUTIONS S.À R.L., a private limited
liability company organized under the laws of the Grand Duchy of
Luxembourg and an indirect, wholly-owned subsidiary of OCWEN
(“ ALTISOURCE ”). Capitalized terms used herein
and not otherwise defined have the respective meanings assigned to
them in the Separation Agreement to be entered into between OCWEN
and Altisource Portfolio Solutions S.A., the sole parent of
ALTISOURCE (“ ALTISOURCE Parent ”) (the “
Separation Agreement ”).
R E C I T A L S
WHEREAS,
OCWEN and ALTISOURCE Parent are entering into the Separation
Agreement pursuant to which OCWEN will (i) separate its existing
business into two independent businesses, (ii) contribute the
ALTISOURCE Business to ALTISOURCE and (iii) distribute all of the
capital stock of ALTISOURCE Parent to the shareholders of OCWEN as
a dividend; and
WHEREAS,
OCWEN and ALTISOURCE wish to set forth their agreements as to
certain matters regarding compensation and employee
benefits.
NOW,
THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained in this Agreement, the Parties agree as
follows:
ARTICLE I
General
SECTION
1.01 General Allocation of Assets and Liabilities for Existing
Plans . Except as otherwise specifically provided herein, from
and after the Distribution, (a) OCWEN shall retain, or shall cause
the applicable other members of the OCWEN Group or its or their
applicable employee benefit plans to retain, sponsorship of, and
all Assets and Liabilities arising out of or relating to, all
employment, compensation and employee benefits-related plans,
programs, agreements and arrangements sponsored or maintained by
OCWEN or any of its Subsidiaries (other than ALTISOURCE Parent and
its Subsidiaries) immediately prior to the Distribution
(collectively, the “ Existing OCWEN Plans ”) and
(b) ALTISOURCE shall retain, or shall cause the applicable other
members of the ALTISOURCE Group or its or their applicable employee
benefit plans to retain, sponsorship of, and all Assets and
Liabilities arising out of or relating to, all employment,
compensation and employee benefits-related plans, programs,
agreements and arrangements sponsored or maintained by ALTISOURCE
Parent or any of its Subsidiaries immediately prior to the
Distribution, if any (collectively, the “ Existing
ALTISOURCE Plans ”).
SECTION
1.02 Cessation of Participation in OCWEN Plans . Except as
otherwise expressly provided herein, as of the Distribution, each
employee of ALTISOURCE or any of its Subsidiaries (whether or not
on disability or any other leave of absence) giving effect to the
Distribution (it being understood that ALTISOURCE Parent has no
employees) (collectively, the “ ALTISOURCE Employees
”) shall immediately cease to be eligible for and participate
actively in any Existing OCWEN Plan.
SECTION
1.03 Adoption of New ALTISOURCE Plans . Except as otherwise
expressly provided herein or in the Separation Agreement, in
connection with the Distribution, ALTISOURCE shall provide, or
shall cause to be provided, compensation and employee benefits to
the ALTISOURCE Employees under one or more existing or newly
adopted employee benefit plans, programs or arrangements. Except as
otherwise expressly provided herein or in the Separation Agreement,
ALTISOURCE shall be solely responsible for all Liabilities arising
out of or relating to such plans, programs and
arrangements.
ARTICLE II
OCWEN Options and Restricted
Stock
SECTION
2.01 Stock Options . (a) Effective as of the Distribution,
each option to purchase OCWEN Common Stock (“ OCWEN Stock
Options ”) granted and outstanding under either the 2007
Equity Incentive Plan or the 1991 Non-Qualified Stock Option Plan
of OCWEN (“ OCWEN Option Plans ”) shall remain
granted and outstanding and shall not, and OCWEN shall cause (to
the maximum extent permitted under the OCWEN Option Plans) the
OCWEN Stock Options not to, terminate, accelerate or otherwise vest
as a result of the Distribution, and each holder thereof
immediately prior to the Distribution will be entitled to receive
the following, determined in a manner in accordance with, and
subject to, the relevant OCWEN Option Plan, FAS123R and Section
409A of the Internal Revenue Code: (i) a number of options to
acquire shares of ALTISOURCE Common Stock equal to the product of
(x) the number of OCWEN Stock Options held by such holder on the
Distribution and (y) one-third (1/3) (the “ ALTISOURCE
Stock Options ”), with an exercise price to be determined
in a manner consistent with this Section 2.01 and (ii) the
same number of OCWEN Stock Options as such holder had prior to the
Distribution, with an adjusted exercise price to be determined in a
manner consistent with this Section 2.01 (the “
Adjusted OCWEN Stock Options ”) (the ALTISOURCE Stock
Options and the Adjusted OCWEN Stock Options, together, the “
Post-Distribution Stock Options ”).
(b) The
option exercise price of the ALTISOURCE Stock Options and the
Adjusted OCWEN Stock Options shall be set at a value so as to
maintain the intrinsic value of the OCWEN Stock Options, both
individually and in the aggregate, and to maintain the ratio of
exercise price to fair market value of the OCWEN Stock Options and
the Post-Distribution Stock Options.
(c) Each
of OCWEN and ALTISOURCE intends that, subsequent to the
Distribution, ALTISOURCE shall enact, or shall cause to be enacted,
one or more equity incentive or similar plans that will allow or
provide for the issuance of new options (or other equity-based
awards) to acquire ALTISOURCE Common Stock, on such terms, and
subject to such conditions (including, without limitation, as to
eligibility, vesting and performance criteria), as ALTISOURCE may
decide in its sole discretion.
2
SECTION
2.02 Restricted Stock . Pursuant to the Distribution, each
holder of shares of OCWEN Common Stock that is subject to
restriction shall receive a dividend of ALTISOURCE Common Stock as
provided for in the Separation Agreement. Any such share of
ALTISOURCE Common Stock received as a dividend in respect of
restricted OCWEN Common Stock shall be subject to the same
restrictions and terms (including vesting schedule and forfeiture)
as were applicable, as of the Distribution Date, to the restricted
OCWEN Common Stock on which the dividend was declared and paid
(except where applicable laws in such foreign jurisdictions may
require a different approach).
SECTION
2.03 Form S-8 . Subsequent to the effectiveness of the Form
10, but prior to the consummation of the Distribution, ALTISOURCE
shall prepare and file with the Commission a registration statement
on Form S-8 (or another appropriate form) registering a number of
shares of ALTISOURCE Common Stock equal to the number of options to
purchase ALTISOURCE Common Stock resulting from the actions
contemplated in SECTION 2.01 above and under any new equity
incentive or similar plan. ALTISOURCE shall use its reasonable best
efforts to cause any such registration statement to be effective
(and the current status of the prospectus or prospectuses required
thereby shall be maintained) as long as any options to purchase
ALTISOURCE Common Stock may remain outstanding.
SECTION
2.04 Section 16 . The Parties shall take all reasonable
steps as may be required to cause the transactions contemplated by
this Article II and any other acquisitions of ALTISOURCE
equity securities (including derivative se
