UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: July 14 2006
(Date of earliest event reported)
ORIGEN FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
| |
|
|
|
|
| Delaware
|
|
Commission File No. 000-50721
|
|
20-0145649 |
| (State of incorporation)
|
|
|
|
(IRS Employer I.D. No.) |
27777 Franklin Road
Suite 1700
Southfield, Michigan 48034
(Address of principal executive offices)
(248) 746-7000
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
| o |
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
| o |
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 140.14a-12) |
| |
| o |
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b)) |
| |
| o |
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c)) |
TABLE OF CONTENTS
Item 1.01 Entry into a Material Definitive Agreement
On July 14, 2006, Origen Financial, Inc. and its primary operating subsidiary Origen Financial
L.L.C. (collectively, “Origen”) entered into an employment agreement with Ronald A. Klein, Origen’s
Chief Executive Officer. The following brief description of the employment agreement is qualified
in its entirety by reference to the full text of the agreement, a copy of which is attached as
Exhibit 10.1.
Mr. Klein’s employment agreement is for an initial three-year term ending July 14, 2009 and is
automatically renewable for successive one-year terms thereafter unless either party timely
terminates the agreement. The employment agreement provides for an annual base salary of $495,000
in the first year, $520,000 in the second year, and $545,000 in the third year. If the agreement is
automatically renewed beyond the initial three-year term, Mr. Klein’s base salary will increase by
5% during each successive one-year term. In addition to his base salary, Mr. Klein is entitled to
annual incentive compensation of up to 100% of his then current base salary if he satisfies certain
individual and company performance criteria established from time to time by Origen’s board of
directors.
In connection with the execution of the employment agreement, Origen Financial, Inc. issued
Mr. Klein 175,000 restricted shares of its common stock. The shares vest in five equal annual
installments of 35,000 shares on each of May 8, 2007, 2008, 2009, 2010 and 2011.
The non-competition provision of the employment agreement generally precludes Mr. Klein from
engaging, directly or indirectly in the United States or Canada in the manufactured housing finance
business or any ancillary business of Origen during the term of his employment with Origen and for
a period of twelve months following the period he is employed by Origen, subject to certain
conditions and exceptions. Mr. Klein will also be prohibited from soliciting the employment of any
of Origen’s other employees and diverting any business from Origen for a period of up to two years
after termination of the employment agreement.
Under the employment agreement, Mr. Klein will be entitled to a severance payment equal to (a)
two years’ salary and target bonus if the employment agreement is terminated by Origen without
cause or by Mr. Klein for good reason, or if Mr. Klein dies or becomes disabled, or (b) one year’s
salary if Origen does not renew the term of the contract at the end of its initial term or any
subsequent renewal term.
Upon a change in control of Origen (as defined in the employment agreement), Mr. Klein may be
entitled to a change in control payment equal to 2.99 times the sum of (a) his then current base
salary, and (b) fifty percent of his then-current target bonus. The change in control payment will
be payable if (i) Mr. Klein is still employed by Origen on the first anniversary of the change in
control, (ii) during such one-year period Mr. Klein’s employment is terminated without cause by
Origen, Mr. Klein resigns with good reason or Mr. Klein dies or becomes disabled, or (iii) Origen
terminates Mr. Klein’s employment in anticipation of a change in control during a specified period
before the closing of the change in control transaction. If, in addition to the change in control
payment under the employment agreement, Mr. Klein is entitled to a payment from Origen upon a
change in control or similar event under Origen’s Retention Plan or any other plan or agreement,
Origen will be obligated to pay only the greater of the change of control payment described in the
employment agreement and such other plan or agreement.
If any severance payments or change in control payments to Mr. Klein under the agreement
collectively constitute a “parachute payment” under Section 280G(b)(2) of the Internal Revenue
Code, thereby requiring the payment of excise taxes, then Origen will gross up such payments to
cover all applicable excise taxes.
-2-