EXHIBIT 10.1
ORIGEN FINANCIAL, INC.
RETENTION PLAN
     1. Purpose and Adoption.
          (a) The purpose of the Origen Financial, Inc. Retention Plan (the
“Plan”) is to maximize stockholder value by: (i) allowing Origen Financial,
Inc., a Delaware corporation (the “Company”), and its subsidiaries to attract
and retain capable and qualified employees and officers, (ii) providing for
continuity and stability of management before, during and after a Change in
Control, and (iii) providing Plan Participants with fair and reasonable
protection from the risks presented by the possibility of a Change in Control by
retaining them during times when a Change in Control may be contemplated or
pending.
          (b) The Plan was approved and adopted by the Board as of June 15,
2006.
     2. Definitions.
          (a) “Administrator” shall mean the Compensation Committee of the
Board, or such other body as the Board may appoint (including itself) from time
to time to administer the Plan.
           (b) “Base Salary” means the Participant’s annual salary in effect on
the date the Change in Control is consummated.
          (c) “Board” means the Board of Directors of the Company.
          (d) “Cause” means (i) a material breach of any provision of the
Participant’s employment agreement, if one exists (if the breach is curable, it
will constitute Cause only if it continues uncured for a period of ten business
days after the Participant’s receipt of notice of such breach from the Company),
(ii) the Participant’s failure or refusal, in any material manner, to perform
all lawful services required of him and that are consistent with the
Participant’s position and job description, which failure or refusal continues
for more than ten business days after the Participant’s receipt of notice of
such deficiency, (iii) the Participant’s commission of fraud, embezzlement or
theft, in any case whether or not involving the Company or its subsidiaries,
(iv) the Participant’s commission of a crime constituting moral turpitude,
whether or not involving the Company or its subsidiaries, that in the reasonable
good faith judgment of the Administrator renders the Participant’s continued
employment harmful to the Company, (v) the Participant’s misappropriation of
assets or property of the Company or its subsidiaries, (vi) the Participant’s
conviction or the entry of a plea of guilty or no contest by the Participant
with respect to any felony that, in the reasonable good faith judgment of the
Administrator, adversely affects the Company, its reputation or its business, or
(vii) the Participant’s gross negligence in performing his duties to the Company
or its subsidiaries.

 

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          (e) All of the following will be deemed a “Change in Control”:
             (i) An event or series of events by which any “person,” as such
term is used in Section 13(d) and 14(d) of the Exchange Act (other than the
Company, any Company subsidiary, or any trustee, fiduciary or other person or
entity holding securities under any employee benefit plan or trust of the
Company), together with all “affiliates” and “associates” (as such terms are
defined in Rule 12b-2 of the Exchange Act) of such person, shall become the
“beneficial owner” (within the meaning of Rule 13d-3 under the Exchange Act),
directly or indirectly, of more than 50% of the combined voting power of the
Company’s then outstanding securities having the right to vote in an election of
the Board (other than as a result of an acquisition of securities directly from
the Company);
             (ii) The consummation of: (1) any consolidation or merger of the
Company in which the stockholders of the Company immediately prior to the
consolidation or merger would not, immediately after the consolidation or
merger, “beneficially own” (as such term is defined in Rule 13d-3 of the
Exchange Act), directly or indirectly, shares representing in the aggregate more
than fifty percent (50%) of the voting shares of the corporation issuing cash or
securities in the consolidation or merger (or of its ultimate parent
corporation, if any) or (2) any sale, lease, exchange or other transfer to an
unrelated party (in one transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or substantially all of the
assets of the Company;
             (iii) The approval of the stockholders of the Company of any plan
or proposal for the liquidation or dissolution of the Company; or
             (iv) Where the persons who, as of the Effective Date (as defined
below), constitute the Company’s Board (the “Incumbent Directors”) cease for any
reason, including, without limitation, as a result of a tender offer, proxy
contest, merger or similar transaction, to constitute at least a majority of the
Board, provided that any person becoming a director of the Company subsequent to
such date shall be considered an Incumbent Director if such person’s election
was approved by or such person was nominated for election by either (1) a vote
of at least two-thirds of the Incumbent Directors or (2) a vote of at least a
majority of the Incumbent Directors who are members of a nominating committee of
the Board comprised, in the majority, of Incumbent Directors; provided further,
however, that notwithstanding the foregoing, any director designated by a person
or entity that has entered into an agreement with the Company to effect a
transaction described in clauses (i), (ii) or (iii) above, shall not be deemed
to be an Incumbent Director.
          (f) “Change in Control Payment” means any payment received by a
Participant pursuant to Section 4 below.
          (g) “Change in Control Payment Date” has the meaning given such term
in Section 4(a) below.

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          (h) “Change in Control Salary” means, (i) for all Participants in
Tiers 1, 2 and 3, the Participant’s Base Salary, and (ii) for all Participants
in Tiers 4, 5, and 6, the sum of (A) the Participant’s Base Salary and (B) 50%
of the Participant’s Target Bonus.
          (i) “Code” means the Internal Revenue Code of 1986, as amended from
time to time.
          (j) “Company” has the meaning given such term in Section 1 above.
          (k) “Disability” means the inability of the Participant to perform his
or her employment services for the Company or its subsidiaries by reason of
physical or mental illness or incapacity as determined by a physician chosen by
the Company and reasonably acceptable to the Participant, which inability has
continued for an aggregate period of at least 120 days in any period of 365
consecutive days.
          (l) “Exchange Act” means the Securities Exchange Act of 1934, as
amended.
          (m) “Excise Tax” has the meaning given such term in Section 5 below.
          (n) “Good Reason” means the occurrence of any of the following events:
(i) a substantial involuntary reduction in Participant’s annual salary except
for an across-the-board salary reduction similarly affecting all or
substantially all employees, or (ii) the relocation of Participant’s principal
place of employment to another location of the Company or its subsidiaries,
outside a sixty (60) mile radius from the location of Participant’s principal
place of employment as of the date the Participant is designated to participate
in the Plan.
          (o) “Participants” means the employees of the Company and its
subsidiaries who are designated to participate in the Plan as provided in
Section 3(a) below.
          (p) “Plan” means this Retention Plan of the Company.
          (q) The “Plan Year” shall be April 1st through March 31st.
          (r) “Restricted Period” means the following periods following the
termination of a Participant’s employment with the Company or its subsidiaries:
for Tier 1 Participants, three months; for Tier 2 Participants, six months; and
for all other Participants, twelve months.
          (s) “Target Bonus” means the Participant’s target annual bonus
pursuant to any annual bonus or incentive plan maintained by the Company or its
subsidiaries in respect of the fiscal year in which the Change in Control is
consummated.

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     3. Designation of Participants; Tiers of Participation.
          (a) Participation in the Plan. The Administrator shall designate the
employees of the Company and its subsidiaries who shall be Participants in the
Plan, both initially and at any time from time to time thereafter. Each person
designated for participation in the Plan shall continue to participate in the
Plan Year of designation at his or her designated Tier. A person’s continued
participation in the Plan in subsequent Plan Years shall be effective only if
the Administrator designates such person to participate in the Plan in each such
subsequent Plan Year. Upon designating a Participant for participation in the
Plan in a new Plan Year, the Administrator may decrease the Tier of
participation for a Participant, but only if there have been changes in the
Participant’s title, duties, job description or performance since the beginning
of the prior Plan Year and only if no Change in Control has occurred prior to
the time such change becomes effective. The Administrator may at any time
terminate a Participant’s participation in the Plan if the Participant’s
employment could be terminated for Cause, regardless of whether or not the
Participant’s employment is actually terminated.
          (b) Tiers of Participation. The Administrator shall designate each
Participant as participating in the Plan at one of the “Tier” levels with the
related Change in Control Payment Multiplier specified in the chart below.

      Tier   Change in Control Payment Multiplier
Tier 1
  0.25
Tier 2
  0.5
Tier 3
  1.0
Tier 4
  1.0
Tier 5
  2.0
Tier 6
  2.99

     4. Payment After Change in Control.
          (a) Participants Employed with the Company on the Change in Control
Payment Date. On the first anniversary of a Change in Control (the “Change in
Control Payment Date”), the Company will pay each Participant still employed
with the Company or its subsidiaries on such date a lump-sum cash amount equal
to the Participant’s Change in Control Payment Multiplier multiplied by the
Participant’s Change in Control Salary.
          (b) Participants No Longer Employed with the Company at the Change in
Control Payment Date. The Company will pay each Participant (i) who resigns with
Good Reason from employment with the Company and its subsidiaries during the
one-year period following a Change in Control, (ii) whose employment is
terminated by the Company or any of its subsidiaries without Cause during the
one-year period following a Change in Control, (iii) who dies or suffers a
Disability during the one-year period following a Change in Control, or
(iv) whose employment is terminated by the Company or any of its subsidiaries in
anticipation of a Change in Control at any time from the date that is 30 days
immediately preceding the execution of a definitive agreement with respect to a
Change of Control that actually occurs and the consummation of such Change in
Control, a lump-sum payment equal to the Participant’s Change in Control Payment
Multiplier multiplied by the Participant’s Change in Control Salary.

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The payment provided for under this Section 4(b) will not be paid to any
Participant who resigns without Good Reason or is terminated for Cause. The
payments provided for in this Section 4(b) shall be made within 30 days of the
effective date of the termination of the Participant’s employment with the
Company and its subsidiaries or of the Participant’s death or Disability, as
applicable.
          (c) No More Than One Change in Control Payment. Anything to the
contrary in this Plan notwithstanding, in no event shall more than one payment
to a given Participant be made under this Section 4, regardless of whether more
than one event constituting a Change in Control occurs at a time that such
Participant is participating in the Plan.
          (d) Covenant Not to Compete. Any Participant who receives a Change in
Control Payment under Section 4(a) above and who terminates his employment with
the Company or its subsidiaries without Good Reason or is terminated by the
Company or its subsidiaries without Cause during the one-year period commencing
on the Change in Control Payment Date shall not compete with the Company during
the Restricted Period. The phrase “shall not compete with the Company,” means
that the Participant shall not, directly or indirectly, engage in, or have an
interest in or be associated with (whether as an officer, director, stockholder,
partner, associate, employee, consultant, owner or otherwise) any “Competitor”
(as defined below) anywhere within the United States or Canada. For purposes
hereof, “Competitor” means any corporation, firm or enterprise which is engaged
in any business which is materially similar to or which is competitive with the
business then conducted or actually proposed by the Company or any company owned
or controlled by or under common control with the Company (an “Affiliate”)
including, without limitation, any company whose business involves the financing
of manufactured houses; provided, however, that the Participant shall be
permitted to make passive investments in the stock of any publicly traded
business (including a competitive business), so long as the stock investment in
any competitive business does not rise above one percent (1%) of the outstanding
shares of such business. In addition, during the Restricted Period, the
Participant shall not directly or indirectly solicit for employment any employee
or independent contractor of the Company or its Affiliates. The provisions of
this Section 4(d) shall not render unenforceable any other covenant not to
compete with the Company or its Affiliates to which the Participant may be
bound, whether pursuant to an employment agreement or otherwise.
     5. Excise Tax Payment. Anything in this Plan to the contrary
notwithstanding, if any of the payments or benefits received or to be received
by the Participant in connection with a Change in Control or the Participant’s
termination or resignation of employment (whether pursuant to the terms of this
Plan or any other plan, arrangement or agreement with the Company or its
subsidiaries) (the “Aggregate Payment”) is determined to constitute a “parachute
payment” as such term is deemed in Section 280G(b)(2) of the Code, the Company
shall pay to the Participant, prior to the time an excise tax imposed by
Section 4999 of the Code (“Excise Tax”) is payable with respect to such
Aggregate Payment, an additional amount which, after the imposition of all
income and excise taxes thereon, is equal to the Excise Tax on the Aggregate
Payment. The determination of whether the Aggregate Payment constitutes a
parachute payment and, if so, the amount to be paid to the Participant and the
time of payment pursuant to this Section 5 shall be made by a nationally
recognized United States public accounting firm selected

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by the Company which has not, during the two years preceding the date of its
selection, acted in any way on behalf of the Company or any Affiliate thereof.
     6. General Release. Prior to and as a condition of any payment or benefits
under this Plan, the Participant shall execute and deliver a general release of
claims to other change of control payments and such other matters as the Company
may reasonably request (including, without, limitation, in the case where a
Participant’s employment has been terminated, such matters as the Company
customarily requires of employees receiving severance payments) in a form
acceptable to the Company, and any applicable statutory rescission period
relating thereto shall have expired.
     7. Entitlement to Benefits Under Other Plans, Programs, Agreements and
Arrangements.
          (a) Other Change in Control Payments. If a Participant is entitled to
any payments upon a Change in Control or other substantially similar event
pursuant to any other plan, program, agreement or arrangement with the Company
and its subsidiaries, the Company shall not be obligated to make payments to the
Participant under both this Plan and such other plan, program, agreement or
arrangement. Instead, the Company shall be obligated to pay the Participant only
the greater of the amounts payable as determined under this Plan and such other
plan, program, agreement or arrangement.
          (b) Severance Payments. Anything in this Plan to the contrary
notwithstanding, all Change in Control Payments made to a Participant under this
Plan shall be in addition to, and not in lieu of, the severance payments to
which the Participant is entitled under any other plan, program, agreement or
arrangement with the Company and its subsidiaries.
          (c) Equity Compensation. This Plan has no effect on a Participant’s
equity compensation awards; any rights of a Participant with respect to equity
compensation awards shall be governed by the plans, programs, agreements and
arrangements setting the terms of such awards.
     8. Miscellaneous
          (a) Successors. This Plan shall be binding upon the Company, its
successors and assigns, and shall be enforceable by Participant and his or her
legal representatives. In the event of a Change in Control or similar
transaction, the provisions of this Plan shall bind and inure to the benefit of
the surviving or resulting entity, or the entity to which such assets shall have
been transferred, as the case may be; provided, however, that the Company will
require any successor to all or substantially all of the business and/or assets
of the Company to expressly assume and agree to perform the Company’s
obligations under this Plan in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place.
          (b) Termination or Amendment of Plan. The Company may terminate or
amend this Plan, but, subject to the following paragraph, no termination or
amendment that is materially adverse to a Participant may

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be effective without the written consent of the Participant, provided that a
termination or an amendment may be adopted without the consent of an affected
Participant if it is adopted on or before March 15 of a given year and does not
become effective until after the end of that Plan Year, and no Change in Control
has occurred prior to the time such termination or amendment becomes effective.
Any termination or amendment shall occur by resolution of the Administrator.
           It is the Company’s intent that the Plan not provide for deferrals of
compensation, as defined under Section 409A of the Code. Notwithstanding
anything to the contrary herein, the Company reserves the right to amend the
Plan as necessary to remain exempt from Section 409A of the Code, including
related final Treasury Regulations and other governmental guidance and
authority.
          (c) Governing Law. This Plan shall be construed and obligations
hereunder enforced in accordance with the laws of the State of Michigan
(regardless of any contrary provisions of its conflicts of laws principles).
          (d) Tax Withholding. The Company may withhold such amounts as may be
required under federal, state and local law to be withheld from payments made
under the Plan.
          (e) Effective Date. This Plan shall be effective as of June 15, 2006
(the “Effective Date”).

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