EX-10.4






Exhibit 10.4




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”).




RECITALS




          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 securities) or dispositions of
OCWEN equity securities (including derivative securities) in connection with this Agreement or the
Separation Agreement by each individual who is a director or officer of OCWEN or ALTISOURCE subject
to Section 16 of the Exchange Act to be exempt under Rule 16b-3 promulgated under the Exchange Act.




ARTICLE III




U.S. Retirement and Deferred Compensation Plans




          SECTION 3.01 U.S. Tax-Qualified 401(k) Plan. (a) Effective as of the Distribution,
ALTISOURCE shall have in effect a defined contribution plan within the meaning of Section 401(k) of
the Code (the “ALTISOURCE 401(k) Plan”) that will provide benefits to eligible and
participating ALTISOURCE Employees and any former employee of ALTISOURCE or any of its Subsidiaries
(other than any such individual who was employed directly by OCWEN or any of its Subsidiaries
(other than ALTISOURCE or any of its Subsidiaries) at any time following such individual’s most
recent direct employment with ALTISOURCE or any of its Subsidiaries) (each such former employee, a
“Former ALTISOURCE Employee”) participating in OCWEN’s 401(k) Plan (the “OCWEN 401(k)
Plan”) (except where applicable laws in such foreign jurisdictions may require a different
approach). Each ALTISOURCE Employee and Former ALTISOURCE Employee participating in the OCWEN
401(k) Plan immediately prior to the effectiveness of the ALTISOURCE 401(k) Plan shall be eligible
to participate in the ALTISOURCE 401(k) Plan as of such effectiveness. ALTISOURCE shall cause each
ALTISOURCE Employee to be credited with all service accrued with OCWEN and its Subsidiaries prior
to such transfer for all purposes under the ALTISOURCE 401(k) Plan.




3









 








          (b) Within a reasonable period of time following the Distribution, OCWEN shall cause to be
transferred to the ALTISOURCE 401(k) Plan, and ALTISOURCE shall cause the ALTISOURCE 401(k) Plan to
accept, an amount equal to the account balances of all ALTISOURCE Employees and Former ALTISOURCE
Employees who are participants in the OCWEN 401(k) Plan. Such transfer shall include any
promissory notes evidencing outstanding loan balances under the OCWEN 401(k) Plan with respect to
such account balances. OCWEN shall debit the account of each such individual under the OCWEN
401(k) Plan by the amount transferred for the benefit of such individual to the ALTISOURCE 401(k)
Plan, and ALTISOURCE shall allocate the amounts transferred to the ALTISOURCE 401(k) Plan to the
account of each such individual by crediting such account with the amount debited from such
individual’s account under the OCWEN 401(k) Plan. Following the foregoing transfer, ALTISOURCE
and/or the ALTISOURCE 401(k) Plan shall assume all Liabilities of OCWEN, the OCWEN Group and their
respective Affiliates under the OCWEN 401(k) Plan with respect to all participants in the OCWEN
401(k) Plan whose balances were transferred to the ALTISOURCE 401(k) Plan and their beneficiaries,
and OCWEN, the OCWEN Group and their respective Affiliates and the OCWEN 401(k) Plan shall have no
Liabilities to provide such participants with benefits under the OCWEN 401(k) Plan following such
transfer. OCWEN and ALTISOURCE shall use reasonable efforts to minimize the duration of any
“blackout period” imposed in connection with the transfer of account balances from the OCWEN 401(k)
Plan to the ALTISOURCE 401(k) Plan.




          SECTION 3.02 Director Non-Qualified Deferred Compensation Plans. OCWEN shall
retain, or shall cause the applicable other members of the OCWEN Group to retain, sponsorship of,
and all Assets and Liabilities arising out of or relating to, OCWEN’s 1996 Stock Plan for
Directors, as amended and Deferred Plan for Directors, dated March 7, 2005, and shall make, or
cause to be made, payments to all participants in such plans, including those who are current or
former directors of OCWEN, in accordance with the terms of the applicable plan.




ARTICLE IV




Incentive Plans




          SECTION 4.01 Annual Incentive Plan. ALTISOURCE shall assume all Liabilities with
respect to ALTISOURCE Employees and ALTISOURCE Former Employees pursuant to OCWEN’s 1998 Annual
Incentive Plan (“OCWEN AIP”) as in effect as of the Distribution Date that relate to any
periods under the OCWEN AIP commencing prior to and ending after the Distribution Date (the
“Applicable Performance Periods”), and OCWEN, the OCWEN Group and their respective
Affiliates shall have no Liabilities to provide ALTISOURCE Employees or ALTISOURCE Former Employees
with benefits under the OCWEN AIP with respect to the Applicable Performance Periods. ALTISOURCE
expects to (a) establish an incentive plan (the “ALTISOURCE AIP”) for ALTISOURCE Employees
and ALTISOURCE Former Employees that will contain the same terms as the OCWEN AIP as in effect as
of the Distribution Date with respect to the Applicable Performance Periods and (b) at the times
originally prescribed by the OCWEN AIP, make payments to the ALTISOURCE Employees and Former
ALTISOURCE Employees with respect to the Applicable Performance Periods in accordance with the
terms of the ALTISOURCE AIP.




4









 








ARTICLE V




U.S. Welfare Benefits, Severance Plan and Other Matters




          SECTION 5.01 U.S. Welfare Plans. (a) No later than the Distribution, ALTISOURCE
shall have in effect welfare benefit plans that provide an appropriate level of life insurance,
health care, dental care, accidental death and dismemberment insurance, disability and other group
welfare benefits (the “ALTISOURCE Welfare Plans”) for ALTISOURCE Employees employed in
Luxembourg or such other foreign jurisdiction as may become applicable, who immediately prior to
the date such ALTISOURCE Welfare Plans are established (the “Welfare Plan Transition Date”)
are participants in the comparable Existing OCWEN Plans (the “OCWEN Welfare Plans”) (except
where applicable laws in such foreign jurisdictions may require a different approach). OCWEN and
ALTISOURCE agree that, to the extent reasonably practicable, the ALTISOURCE Welfare Plans shall
provide to such ALTISOURCE Employees coverage that is substantially similar to the coverage that
was provided to them under the corresponding OCWEN Welfare Plans immediately prior to the Welfare
Plan Transition Date. ALTISOURCE shall, subject to approval by its third-party insurance
providers, (A) waive all limitations as to preexisting conditions, exclusions and waiting periods
and actively-at-work requirements with respect to participation and coverage requirements
applicable to such ALTISOURCE Employees and their dependents under the ALTISOURCE Welfare Plans to
the extent previously satisfied under the applicable corresponding OCWEN Welfare Plan immediately
prior to the Welfare Plan Transition Date and (B) provide each such ALTISOURCE Employee and his or
her eligible dependents with credit under ALTISOURCE Welfare Plans for any co-payments and
deductibles paid under corresponding OCWEN Welfare Plans prior to the Welfare Plan Transition Date
in the calendar year in which the Welfare Plan Transition Date occurs for purposes of satisfying
any applicable deductible or out-of-pocket requirements under any ALTISOURCE Welfare Plans in which
such ALTISOURCE Employees participate.




          (b) ALTISOURCE shall retain, or shall cause the applicable other members of the ALTISOURCE
Group or the applicable ALTISOURCE Welfare Plans to retain, responsibility for all claims for
welfare benefits incurred prior to, from and after the Distribution under the OCWEN Welfare Plans
and the ALTISOURCE Welfare Plans by ALTISOURCE Employees and their dependents and beneficiaries.




          SECTION 5.02 COBRA and HIPAA. ALTISOURCE shall retain all liabilities and
obligations to ALTISOURCE Employees and their eligible dependents, in respect of health insurance
under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the
Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and applicable state
law.




ARTICLE VI




Termination




          SECTION 6.01 Termination. This Agreement may be terminated by OCWEN at any time,
in its sole discretion, prior to the Distribution Date.




5









 








          SECTION 6.02 Effect of Termination. In the event of any termination of this
Agreement prior to the Distribution Date, neither party (or any of its directors or officers) shall
have any Liability or further obligation to the other party.




ARTICLE VII




Miscellaneous




          SECTION 7.01 No Third-Party Beneficiaries. Without limiting the generality of
Section 10.04 of the Separation Agreement, this Agreement is solely for the benefit of the parties
hereto, and no current or former director, officer, employee or independent contractor of any
member of the OCWEN Group or any member of the ALTISOURCE Group or any other individual associated
therewith (including any beneficiary or dependent thereof) shall be regarded for any purpose as a
third-party beneficiary of this Agreement, and no provision of this Agreement shall create such
rights in any such persons in respect of any benefits that may be provided, directly or indirectly,
under any benefit plan, program, policy, agreement or arrangement of any member of the OCWEN Group
or any member of the ALTISOURCE Group. No provision of this Agreement shall constitute a
limitation on the rights to amend, modify or terminate any benefit plans, programs, policies,
agreements or arrangements of any member of the OCWEN Group or any member of the ALTISOURCE Group,
and nothing herein shall be construed as an amendment to any such benefit plan, program, policy,
agreement or arrangement. No provision of this Agreement shall require any member of the OCWEN
Group or any member of the ALTISOURCE Group to continue the employment of any employee of any
member of the OCWEN Group or any member of the ALTISOURCE Group for any specific period of time
following the Distribution Date.




          SECTION 7.02 Confidentiality. This Agreement and the information provided to each
party hereunder shall be subject to the confidentiality provisions set forth in Sections 6.07 and
6.08 of the Separation Agreement.




          SECTION 7.03 Dispute Resolution. All disputes, controversies and claims directly
or indirectly arising out of or in relation to this Agreement or the validity, interpretation,
construction, performance, breach or enforceability of this Agreement shall be finally, exclusively
and conclusively settled in accordance with the provisions of Article VII of the Separation
Agreement, which shall apply mutatis mutandis to this Agreement.




          SECTION 7.04 Miscellaneous. Except as otherwise expressly set forth in this
Agreement, the provisions in Article X of the Separation Agreement (which Article X addresses
counterparts, entire agreement, corporate power, governing law, assignability, third party
beneficiaries, notices, severability, publicity, expenses, headings, survival of covenants, waivers
of default, specific performance, amendments, interpretation, jurisdiction and service of process)
shall apply mutatis mutandis to this Agreement.




* * * * *





6









 








          IN WITNESS WHEREOF, the parties have caused this Employee Matters Agreement to be executed as
of the date first written above by their duly authorized representatives.




	 	 	 	 	 
	 	OCWEN FINANCIAL CORPORATION

 	 
	 	By 	/s/ Ronald M. Faris
 	 
	 	 	Name:  	Ronald M. Faris 	 
	 	 	Title:  	President 	 
	 
	 	ALTISOURCE SOLUTIONS S.À R.L.

 	 
	 	By 	/s/ William B. Shepro
 	 
	 	 	Name:  	William B. Shepro 	 
	 	 	Title:  	Manager 	 
	 



[Employee Matters Agreement]