Document:

<PAGE>   1
                                                                  Exhibit 10.9.1

                              AMENDMENT NUMBER ONE

                       TO THE EMPLOYMENT AGREEMENT BETWEEN

           HANOVER CAPITAL MORTGAGE HOLDINGS, INC. AND IRMA N. TAVARES

         This Amendment, effective as of August 10, 2000, by and among Hanover
Capital Mortgage Holdings, Inc., having an address at 90 West Street, Suite
2210, New York, New York 10006 (the "Company") and Irma N. Tavares (the
"Employee"), an individual whose residence is 1260 Lenape Way, Scotch Plains,
New Jersey, 07076, to the Employment Agreement, effective as of September 19,
1997, between the Company and the Employee (the "Agreement"). Capitalized terms
used but not otherwise defined herein shall have the meanings assigned to such
terms in the Agreement.

         1.       Section 1 of the Agreement is hereby amended by deleting the
last sentence of such Paragraph and inserting in its place the following:

                  Subject to Sections 9(a) and 9(g) of this Agreement, this
         Agreement shall be automatically extended upon each anniversary date of
         the Effective Date for a successive five year term commencing on such
         anniversary of the Effective Date unless the Employee or the Company
         gives the other party not less than three (3) months written notice
         prior to any anniversary of the Effective Date. Upon the date of each
         automatic extension, the Expiration Date shall be the date ending five
         years thereafter.

         2.       This amendment shall be construed in accordance with the laws
of the State of New York and the obligations, rights, and remedies of the
parties hereunder shall be determined in accordance with such laws without
regard to conflict of laws doctrine applied in such state.

         3.       This Amendment may be executed in any number of counterparts,
each of which shall constitute an original and all of which, taken together,
shall constitute one instrument.

         4.       Except as amended above, the Agreement shall continue in full
force and effect in accordance with its terms.

         IN WITNESS WHEREOF, the Employee has executed this Amendment and the
Company has caused this Amendment to be executed and delivered by a duly
authorized officer as of the day and year first above written.

                                   COMPANY:

                                   HANOVER CAPITAL MORTGAGE HOLDINGS, INC.

                                   By:
                                       -----------------------------------------
                                   Name: John A. Burchett
                                   Title: President

                                   EMPLOYEE:

                                   ---------------------------------------------
                                   Irma N. Tavares<PAGE>   1
                                                                 Exhibit 10.10.1

                              AMENDMENT NUMBER ONE

                       TO THE EMPLOYMENT AGREEMENT BETWEEN

          HANOVER CAPITAL MORTGAGE HOLDINGS, INC. AND JOYCE S. MIZERAK

         This Amendment, effective as of August 10, 2000, by and among Hanover
Capital Mortgage Holdings, Inc., having an address at 90 West Street, Suite
2210, New York, New York 10006 (the "Company") and Joyce S. Mizerak (the
"Employee"), an individual whose residence is 11 Foxhill Run, Monmouth Junction,
New Jersey, 08852, to the Employment Agreement, effective as of September 19,
1997, between the Company and the Employee (the "Agreement"). Capitalized terms
used but not otherwise defined herein shall have the meanings assigned to such
terms in the Agreement.

         1.       Section 1 of the Agreement is hereby amended by deleting the
last sentence of such Paragraph and inserting in its place the following:

                  Subject to Sections 9(a) and 9(g) of this Agreement, this
         Agreement shall be automatically extended upon each anniversary date of
         the Effective Date for a successive five year term commencing on such
         anniversary of the Effective Date unless the Employee or the Company
         gives the other party not less than three (3) months written notice
         prior to any anniversary of the Effective Date. Upon the date of each
         automatic extension, the Expiration Date shall be the date ending five
         years thereafter.

         2.       This amendment shall be construed in accordance with the laws
of the State of New York and the obligations, rights, and remedies of the
parties hereunder shall be determined in accordance with such laws without
regard to conflict of laws doctrine applied in such state.

         3.       This Amendment may be executed in any number of counterparts,
each of which shall constitute an original and all of which, taken together,
shall constitute one instrument.

         4.       Except as amended above, the Agreement shall continue in full
force and effect in accordance with its terms.

         IN WITNESS WHEREOF, the Employee has executed this Amendment and the
Company has caused this Amendment to be executed and delivered by a duly
authorized officer as of the day and year first above written.

                                     COMPANY:

                                     HANOVER CAPITAL MORTGAGE HOLDINGS, INC.

                                     By:
                                         ---------------------------------------
                                     Name: John A. Burchett
                                     Title: President

                                     EMPLOYEE:

                                     -------------------------------------------
                                     Joyce S. Mizerak<PAGE>   1
                                                                 Exhibit 10.11.1

                              AMENDMENT NUMBER ONE

                       TO THE EMPLOYMENT AGREEMENT BETWEEN

         HANOVER CAPITAL MORTGAGE HOLDINGS, INC. AND GEORGE J. OSTENDORF

         This Amendment, effective as of August 10, 2000, by and among Hanover
Capital Mortgage Holdings, Inc., having an address at 90 West Street, Suite
2210, New York, New York 10006 (the "Company") and George J. Ostendorf (the
"Employee"), an individual whose residence is 506 East Marshall Street, St.
Arlington Heights, Illinois, 60004, to the Employment Agreement, effective as of
September 19, 1997, between the Company and the Employee (the "Agreement").
Capitalized terms used but not otherwise defined herein shall have the meanings
assigned to such terms in the Agreement.

         1.       Section 1 of the Agreement is hereby amended by deleting the
last sentence of such Paragraph and inserting in its place the following:

                  Subject to Sections 9(a) and 9(g) of this Agreement, this
         Agreement shall be automatically extended upon each anniversary date of
         the Effective Date for a successive five year term commencing on such
         anniversary of the Effective Date unless the Employee or the Company
         gives the other party not less than three (3) months written notice
         prior to any anniversary of the Effective Date. Upon the date of each
         automatic extension, the Expiration Date shall be the date ending five
         years thereafter.

         2.       This amendment shall be construed in accordance with the laws
of the State of New York and the obligations, rights, and remedies of the
parties hereunder shall be determined in accordance with such laws without
regard to conflict of laws doctrine applied in such state.

         3.       This Amendment may be executed in any number of counterparts,
each of which shall constitute an original and all of which, taken together,
shall constitute one instrument.

         4.       Except as amended above, the Agreement shall continue in full
force and effect in accordance with its terms.

         IN WITNESS WHEREOF, the Employee has executed this Amendment and the
Company has caused this Amendment to be executed and delivered by a duly
authorized officer as of the day and year first above written.

                               COMPANY:

                               HANOVER CAPITAL MORTGAGE HOLDINGS, INC.

                               By:
                                   ---------------------------------------------
                               Name: John A. Burchett
                               Title: President

                               EMPLOYEE:

                               -------------------------------------------------
                               George J. Ostendorf<PAGE>   1
                                                                 Exhibit 10.11.2

                              EMPLOYMENT AGREEMENT

                                THOMAS P. KAPLAN

         THIS EMPLOYMENT AGREEMENT (the "Agreement"), effective as of the 1st
day of January, 2000 (the "'Effective Date") is by and between Hanover Capital
Mortgage Holdings, Inc, a Maryland corporation, with its offices located at 90
West Street, Suite 2210, New York, New York 10006 (the "Company" and Thomas P.
Kaplan (the "Employee'), an individual whose residence is 229 E 79th Street, New
York, New York 10021.

         The Company acknowledges and recognizes the value of the Employee's
reputation in the business, experience and ability, and based upon the
Employee's representations respecting the Employee's reputation in the business,
experience and ability, the Company desires to provide for the employment and
continuation of the Employee's employment with the Company on the terms set
forth in this Agreement.

         1. Employment and Acceptance of Employment; Term. Upon and subject to
the terms set forth in this Agreement, the Company hereby employs the Employee
as its Chief Financial Officer and Managing Director or such other management
position(s) as the Chief Executive Officer of the Company may determine from
time to time, and the Employee hereby agrees to accept such employment, for a
period of five years (unless sooner terminated as hereinafter set forth,) (the
"Initial Term") commencing on the Effective Date and ending five years
thereafter (the "Expiration Date"). Subject to Sections 9(a) and 9(g) of this
Agreement, this Agreement shall be automatically extended upon each anniversary
date of the Effective Date for a successive five year term commencing on such
anniversary of the Effective Date unless the Employee or the Company gives the
other party not less than three (3) months written notice prior to any
anniversary of the Effective Date. Upon the date of each automatic extension,
the Expiration Date shall be the date ending five years thereafter.

         2. Duties. It is the intention of the Company and the Employee that,
subject to the direction and supervision of the Chief Executive Officer, the
Employee shall serve as the Company's Chief Financial Officer. The Employee
shall be responsible for the Company's corporate finance and capital markets
activities, financial planning, financial reporting, regulatory compliance, tax
compliance, human resources and physical plant. The Employee agrees, during the
Initial Term and any extension of the Initial Term, to devote his entire
business and professional time, attention, and energies exclusively to the
business of the Company and its subsidiaries (including, without limitation,
Hanover Capital Partners Ltd., HanoverTrade.com, Inc. and Hanover Capital
Securities, Inc.) as shall be necessary, advisable or required to perform the
duties of the Employee's position specified in Section 1, and to conform to the
rules, regulations, instructions, personnel practices and policies of the
Company, as existing and amended from time to time by the Company or its Board
of Directors (the "Board"). Notwithstanding the foregoing, during the Initial
Term and any extension of the Initial Term, the Employee may (i) serve as an
officer, director, trustee or committee member of any religious, professional,
civic, charitable or educational organization, or as a director of any
corporation whose business is not competitive with the Company or any of its
subsidiaries, and (ii) engage in, and devote time and effort to, any and all
personal investments or personal business ventures (which shall in no event
include being an officer or principal shareholder of any public or private
company) unrelated to the business or affairs of the Company and its
subsidiaries, in each case so long as such activities do not materially
interfere with the Employee's obligations to the Company and its subsidiaries or
conflict in any way with the business of the Company.
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         3. Compensation and Benefits.

         (a). Base Salary. In consideration of the Employee's performance of
services under this Agreement, the Company will pay to the Employee, during the
first year of the Initial Term of the Employee's employment under this
Agreement, and the Employee agrees to accept from the Company for the Employee's
services under this Agreement, an annual salary (the "Base Salary") of
$229,522.50, payable on a pro rata basis in accordance with the Company's normal
payroll practices applicable to its executive officers, but not less often than
monthly. The Employee's Base Salary shall be subject to annual review by the
Company's Chief Executive Officer and may be adjusted (upwards but not
downwards) in such amounts as the Chief Executive Officer may determine in his
sole discretion. Notwithstanding the foregoing, the Base Salary shall be
increased annually by any cost of living increases, as determined by the Chief
Executive Officer in a manner consistent with that used to determine the cost of
living increases for the Company's other employment agreements, as applicable.

         (b). Bonus. In addition to the Base Salary, the Employee shall be
entitled during the Initial Term and any extension thereof to participate in the
Company's Bonus Incentive Compensation Plan and any and all other bonus plans
adopted by the Board for the executive officers of the Company and its
subsidiaries. The Employee shall be eligible a receive a bonus each year in such
amount as determined by the Chief Executive Officer in his sole discretion, as
applicable.

         (c). Stock Options. The Employee shall be entitled to participate in
the Company's 1999 Stock Option Plan and any and all other equity compensation
plans adopted by the Board for the employees of the Company and its
subsidiaries.

         (d). Life and Disability Insurance. During the Initial Term and any
extension thereof, the Company shall provide to the Employee at the expense of
the Company (i) a term life insurance policy with a death benefit equal to two
million and 00/100 dollars ($2,000,000); and (ii) disability insurance coverage
which shall provide the Employee a death benefit upon total disability equal to
seventy-five (75%) percent of the Base Salary then in effect payable until the
Employee is seventy (70) years old. The Employee shall have the option to pay
the premiums for the disability insurance coverage directly and, in such event,
the Base Salary under this Agreement shall be increased by an amount equal to
the amount of such premiums, plus an additional amount equal to the Employee's
additional income tax resulting from such increase.

         (f). Paid Vacations. The Employee shall be entitled to annual paid
vacations of four (4) weeks in each year of the Initial Term and any extension
of the Initial Term, at such time and for such periods as may be mutually
acceptable to the Company and the Employee, in accordance with the Company's
policies governing vacations for executive officers of the Company. Unused
vacation in any given year shall not accumulate from year to year and Employee
shall not be entitled to any cash payment for or payment in lieu of unused
vacation time.

         (g). Paid Holidays and Personal Days. The Employee shall be entitled to
all paid holidays and personal days, in accordance with the Company's policies
governing holidays and personal days for executive officers.

         (i). Deductions. The Company shall have the right to deduct from the
Base Salary all other cash amounts payable by the Company under the provisions
of this Agreement to the Employee or, if applicable, to his estate, legal
representatives or other beneficiary designated in

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writing by the Employee (a "Designee"), all social security taxes, all federal,
state and municipal taxes and all other charges and deductions which now or
hereafter are imposed by law as charges on the compensation of the Employee or
charges on cash benefits payable by the Company under this Agreement to his
estate, legal representatives or Designee.

         4. Reimbursement of Certain Expenses. The Company shall reimburse the
Employee, upon production of accounts, vouchers or other reasonable evidence of
payment by the Employee, all in accordance with the Company's regular procedures
in effect from time to time and in a form suitable to establish the validity and
deductibility of such expenses for tax purposes, all reasonable, ordinary and
necessary travel, automobile and other expenses as shall have been incurred by
the Employee in the performance of the Employee's duties under this Agreement.

         5. Non-competition.

         (a). Non-Competition. Through the date on which the Employee's
employment with the Company is terminated (the "Termination Date") and, in the
event the Employee's employment with the Company is terminated other than by the
Company pursuant to Sections 9(b) (termination by the Company Without Good
Cause), or 9(g) (termination by the Company following a Change of Control), or
9(g) (termination by the Employee following a Change of Control), until the
Expiration Date, the Employee will not, directly or indirectly, engage in the
business of, or own, or control an interest in (except as a passive investor
owning less than one percent (1%) of the equity securities of a publicly-owned
company), or act as director, officer or employee of, or consultant to, any
individual, partnership, joint venture, corporation or other business entity
directly or indirectly engaged anywhere in the United States in any Business (as
hereafter defined) competing with the business then being carried on by the
Company or its subsidiaries or contemplated by the Company or its subsidiaries
to the extent included within the definition of "Business." In the event any of
the provisions of this Section 5(a) are unenforceable by law, then the
restrictions shall be for such period and such geographic area as a court shall
find is necessary to protect the Company. The provisions of this Section 5(a)
shall no longer be enforceable in the event the Company either files for
bankruptcy or other protection from creditors (which filing is not dismissed
within 180 days) or advises its shareholders in a press release and in a filing
with the Securities and Exchange Commission that it is ceasing to operate as an
ongoing business.

         (b). Business. The term "Business" as used in this Section 5 shall mean
(i) acquiring and holding single family mortgage loans, (ii) originating,
selling and servicing multifamily and commercial real estate loans, (iii)
offering due diligence services to buyers, seller and holders of mortgages, (iv)
securitizing the mortgage loans and retaining interests therein, (v) purchasing
mortgage asset investments in the secondary mortgage market, (vi) managing such
portfolios, (vii) any other business in which the Company or any subsidiary is
engaged on the Termination Date, (viii) such other business contemplated by the
Registration Statement or any subsequent filings by the Company or any
subsidiary with the Security and Exchange Commission prior to the Termination
Date, and (ix) any other business in which the Company or any subsidiary is
actively planning to become engaged on the Termination Date, and in connection
with the planning of which the Employee has had significant involvement.

         (c). Employee Representations. The Employee represents to the Company
(i) that the Employee is not subject to any employment agreement as of the
Effective Date, nor has the Employee previously, at any time, entered into any
written agreement with any person, firm or corporation, which would or could
preclude or prevent him from entering into this Agreement or

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<PAGE>   4
which requires the consent of any other party, and (ii) that as of the Effective
Date, neither the Company nor any of it subsidiaries has any financial or other
obligation to the Employee except as set forth on Exhibit B. The Employee agrees
to indemnify the Company and each of its officers, directors and controlling
persons against any claim, loss, liability or expense (including reasonable
counsel's fees and costs) incurred by the Company or its officers, directors and
controlling persons arising out of or in connection with any misrepresentation
made by the Employee under this Agreement.

         6. Confidentiality.

         (a). Obligation to Keep Confidential. The Employee acknowledges that
his employment by the Company brings him into close contact with many
confidential affairs of the Company, its subsidiaries, and its customers,
including, without limitation, information about costs, profits, markets, sales,
key personnel, pricing policies, operational methods, concepts, and other
business affairs and methods of the Company, its subsidiaries and its customers
and other information not readily available to the public, as well as plans for
future developments (collectively referred to hereinafter as "Proprietary
Information"). The Employee further acknowledges that the relationships between
the Company, its subsidiaries and its officers, employees, agents, and customers
constitute a valuable asset of the Company ( the "Other Proprietary Assets"). In
recognition of the foregoing, the Employee covenants and agrees:

         (i). That all Proprietary Information and Other Proprietary Assets
         shall be the exclusive property of the Company and that the Employee
         will keep secret all Proprietary Information and Other Proprietary
         Assets and will not use the same for the Employee's own benefit or
         disclose the same to, or use the same for the benefit or, anyone
         outside of the Company, either during or after the Employee's
         employment by the Company; and

         (ii). That the Employee will deliver promptly to the Company on
         termination of Employee's employment by the Company, or at any time the
         Chief Executive Officer or the Board may so request, all Proprietary
         Information and Other Proprietary Assets, including, without
         limitation, all memoranda, notes, documentation, data, records, reports
         and other tangible manifestations of the Proprietary Information and
         Other Proprietary Assets (and all copies thereof), that Employee may
         then (or thereafter) possess or have under the Employee's control.

         (b). Exceptions. The Employee's undertakings and obligations under this
Section 6 will not apply to any Proprietary Information and Other Proprietary
Assets which (i) is or becomes generally known to the public through no action
on the part of the Employee, (ii) is generally disclosed to third parties by the
Company without restriction on such third parties, (iii) is approved for release
by written authorization of the Board, or (iv) is the subject matter of a lawful
request or subpoena by and within the authority of a court or government agency
or other body, provided, however, no such information shall be released by
Employee without Employee providing to the Company thirty (30) days prior
written notice to the Company and providing the Company the right to seek a
protective order relief preventing the release of such information.

         7. Non-Solicitation. The Employee hereby covenants and agrees that, if
the Employee's employment with the Company is terminated other than (i) by the
Company pursuant to Sections 9(b) or 9(g) or (ii) by the Employee pursuant to
Section 9(g), the Employee will not, during the period from the Termination Date
through the Expiration Date, induce or attempt to induce any officer, employee,
agent, consultant or customers of the Company or its subsidiaries to discontinue
such affiliation with the Company or its subsidiaries or to refrain from
entering

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into new business relationships with the Company or its subsidiaries.

         8. Specific Performance. Without intending to limit the remedies
available to the Company, the Employee agrees that the damages at law will be an
insufficient remedy to the Company in the event that the Employee violates the
terms of Sections 5, 6 or 7 of this Agreement and that the Company may apply for
and obtain immediate injunctive relief in any court of competent jurisdiction or
restrain the breach or threatened breach of, or otherwise to specifically
enforce, any of the agreements and covenants contained in such Sections. The
parties hereto understand that each of the agreements and covenants of the
Employee contained in Sections 5, 6 and 7 of this Agreement is an essential
element of this Agreement and agree that the obligations of the Employee
thereunder will survive the termination of this Agreement.

         9. Termination.

         (a). Termination by the Company for Good Cause. The Company may
terminate this Agreement and its obligations to the Employee under this
Agreement at any time for "Good Cause", which shall mean only (i) the conviction
of the Employee of (or the plea by the Employee of nolo contendere to) a felony,
(ii) the good faith determination by the Chief Executive Officer or Board that
the Employee has willfully and deliberately failed to perform a material amount
of Employee's duties under this Agreement (other than a failure to perform
duties resulting from the Employee's incapacity due to physical or mental
illness), which failure to perform duties shall not have been cured within
thirty (30) days after the receipt by the Employee of written notice thereof
from the Chief Executive Officer or the Board specifying with reasonable
particularity such alleged failure: (iii) absence from the Company's regular
full-time employment in excess of three consecutive days that is not due to a
vacation, participation in a permitted activity, bona fide illness, disability,
death or other reason expressly authorized by the Board in advance; or (iv) any
act or acts of personal dishonesty (including, without limitation any insider
trading or unauthorized trading in the Company's securities) by the Employee
which have a material adverse effect on the Company or any of its subsidiaries.
In the event of such termination, the Employee shall only be entitled to receive
any accrued but unpaid sick pay and any properly incurred unreimbursed expenses.
In addition, if the Company terminates this Agreement due to the conviction of
the Employee of (or the plea by the Employee of nolo contendere to) a felony as
a result of (iv) above, then Employee will pay all costs and expenses (including
reasonable attorney's fees) incurred by the Company in connection therewith.

         (b). Termination by the Company Without Good Cause. In the event that
the Company terminates this Agreement without Good Cause, the Employee shall be
entitled to the following benefits:

         (i). The Company shall pay the Employee the Employee's Base Salary at
the rate then in effect (plus any cost of living adjustments as described above)
until the later of (x) one year after the Termination Date, or (y) the
Expiration Date; and

         (ii) The Company shall pay the Employee for any accrued but unpaid sick
pay and any properly incurred unreimbursed expenses.

In the event that the Employee shall obtain other full-time or part-time
employment or consulting work during such period, the amount of payments
Employee receives from such employment or work shall be credited against the
amount that the Company is obligated to pay Employee during such period pursuant
to this subparagraph (b). The Employee shall be under no obligation to obtain
such other employment or work, but if the Employee shall, the Employee shall
promptly

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give written notice to the Company of the salary and fringe benefits provided to
the Employee in connection with such other employment or work, in order that the
amount of such credit may be determined.

         (c). Termination by the Employee Without Good Cause. Notwithstanding
the provisions of Section 1, the Employee may resign from the Company at any
time upon ninety (90) days prior written notice to the Company. In the event of
resignation by the Employee under this Section 9(c), the Board in its sole
discretion may elect to waive the period of notice, or any portion thereof, and,
in such event, the Company will pay the Employee's salary for the notice period
(or for any remaining portion of the period) provided the Employee continues to
be employed during that period. From and after the effective date of such
termination by the Employee of Employee's employment under this Agreement, the
Company shall have no further liability to the Employee for salary or other
compensation (or benefits, except for any accrued but unpaid sick pay, any
properly incurred unreimbursed expenses and as provided pursuant to the terms of
any compensation or benefit plan of the Company in which the Employee is a
participant) or other matters whatsoever.

         (d). [INTENTIONALLY OMITTED]

         (e). Termination upon Disability of Employee. This Agreement shall
terminate upon the disability resulting from the Employee's inability, due to an
injury, physical or mental illness, disease or infirmity due to age, to perform
his duties under this Agreement on a full-time basis for two consecutive months
or an aggregate of 60 days within a one-year period, as certified by at least
two (2) duly licensed and qualified physicians (one of whom will be approved by
the independent members of the Board), which is likely to continue for at least
one year from the time of inception, in which event the Employee shall be
entitled to receive, in full satisfaction of all obligations due to the Employee
by the Company under this Agreement, (i) his Base Salary then in effect (plus
any cost of living adjustments as described above) while such disability
continues until the date upon which the disability benefits pursuant to the
disability insurance policy provided for in Section 3(e) commence (but in no
event more than two months); (ii) the proceeds of such disability policy; and
(iii) any accrued but unpaid sick pay and any properly incurred unreimbursed
expenses.

         (f). Termination upon Death of Employee. This Agreement shall
terminate upon the death of the Employee, in which event the Employee's estate,
legal representatives or designee shall be entitled to receive, in full
satisfaction of all obligations due to the Employee by the Company hereunder,
(i) the Employee's Base Salary through the last day of the month of death; (ii)
the proceeds of the insurance policy or policies maintained on the Employee's
life, pursuant to Section 3(e) hereof; and (iii) any accrued but unpaid sick pay
and any properly incurred unreimbursed expenses.

         (g). Termination by the Company Following Change of Control.
Notwithstanding Sections 9(b) and 9(c) above, in the event that, at any time
within 90 days following a Change of Control (as hereinafter defined), either
(i) the Company shall terminate the Employee's employment without Good Cause as
defined in Section 9(a) or (ii) the Employee shall terminate the Employee's
employment without there being a Good Cause termination by the Company pending,
then and in either such event, such termination shall be treated as a
termination pursuant to this Section 9(g) rather than Section 9(b) or 9(c), as
the case may be, and the Employee shall be entitled to receive until the later
of (A) two (2) years after the Termination Date or (B) the Expiration Date, his
Base Salary at the rate then in effect (plus cost of living adjustments as
provided above). The Employee shall also be paid any accrued vacation pay to the
date of such

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<PAGE>   7
termination for the applicable year only, and any sick leave for appropriate
sick day absences then accrued but unpaid or unpaid expense reimbursements that
may then be properly due. The amounts payable to the Employee shall not be
subject to any credit or set-off resulting from the obtaining of any part-time
or full-time employment or consulting assignments by the Employee during such
period.

         For purposes of this Agreement, a "Change of Control" shall mean and
include any of the following (for which the Employee did not promote the
transaction or vote as a shareholder):

         (i). a merger or consolidation of the Company with or into other
         corporation or other business entity (except one in which the holders
         of capital stock of the Company immediately prior to such merger or
         consolidation continue to hold at least a majority of the outstanding
         securities having the right to vote in an election of the Board of
         Directors ("Voting Stock") of the surviving corporation);

         (ii). a sale, lease, exchange or other transfer (in one transaction or
         a related series of transactions) of all or substantially all of the
         Company's assets except in a transaction where the Employee or an
         Affiliate of the Employee is the transferee;

         (iii). the acquisition by any person or any group of persons (other
         than the Company, any of its direct or indirect subsidiaries, or any
         director, trustee, fiduciary or other person or entity holding
         securities under any employee benefit plan or trust of the Company or
         any of its direct or indirect subsidiaries) acting together in any
         transaction or related series of transactions, of such number of shares
         of the Company's Voting Stock as causes such person, or group of
         persons, to own beneficially, directly or indirectly, as of the time
         immediately after such transaction or series of transactions, 10% or
         more of the combined voting power of the Voting Stock of the Company
         (or in the case of John A. Burchett, 18% or more of the outstanding
         shares of Common Stock or in the case of Wallace Weitz, 17% or more of
         the outstanding shares of Common Stock) other than as a result of an
         acquisition of securities directly from the Company, or solely as a
         result of an acquisition of securities by the Company which by reducing
         the number of shares of the Voting Stock outstanding increases the
         proportionate voting power represented by the Voting Stock owed by any
         such person to 50% or more of the combined voting power of such Voting
         Stock; and

         (iv). a change in the composition of the Company's Board of Directors
         following a tender offer or proxy contest or a series of proxy contests
         (coinciding with the staggered terms of the Directors or otherwise), as
         a result of which persons who, immediately prior to such tender offer
         or proxy contest or series of proxy contests, constituted the Company's
         Board of Directors shall cease to constitute at least a majority of the
         members of the Board of Directors (other than by their voluntary
         resignations), but only in the event that the persons elected to the
         Board were not supported by the Employee as a shareholder.

         10. Indemnification. To the fullest extent permitted by law and in
addition to any other rights permitted or granted under the Company's articles
of incorporation, by-laws, or any policy of insurance, or by law, the Company
shall indemnify the Employee if the Employee is made a party, or threatened to
be made a party, to any threatened, pending or contemplated action, suit or
proceeding, whether civil, administrative or investigative, by reason of the
fact that the Employee is or was an employee, officer or director of the Company
or any subsidiary of the Company, in which capacity the Employee is or was
servicing at the Company's request in

                                       7
<PAGE>   8
accordance with the terms of this Agreement, against any an all cost, losses,
damages, judgments, liabilities and expenses (including reasonable attorneys'
fees) which may be suffered or incurred by him in connection with any such
action, suit or proceeding; provided, however, that, there shall be no
indemnification in relation to matters as to which the Employee is adjudged to
have been guilty of fraud, bad faith, gross negligence, breach of fiduciary duty
or as a result of the Employee's material breach of this Agreement; and
provided, however, that all of such costs shall be paid by insurance, to the
extent such coverage exists.

         11. Entire Agreement; Amendment and Waiver. This Agreement is the
entire agreement between the parties with respect to the subject matter hereof
and supersedes any and all prior or contemporaneous oral and prior written
agreements and understandings. There are no oral promises, conditions,
representations, understandings, interpretations, or terms of any kind as
conditions or inducements, to the execution of this Agreement or in effect among
the parties. No custom or trade usage, nor course of conduct among the parties,
shall be relied upon to vary the terms of this Agreement. This Agreement may not
be amended, and no provision of this Agreement shall be waived, except by
writing signed by all the parties to this Agreement which states that it is
intended to amend or waive a specifically identified provision of this
Agreement. Any waiver of any rights or failure to act in a specific instance
shall relate only to such instance and shall not be construed as an agreement to
waive any rights or fail to act in any other instance, whether or not similar.
All amendments or waivers an behalf of the Company shall have first been
approved by the non-employee members of the Board.

         12. Severability. Should any provision of this Agreement be
unenforceable or prohibited by any applicable law, this Agreement shall be
considered divisible as to such provision which shall be inoperative, and the
remainder of this Agreement shall be valid and binding as though such provision
were not included in this Agreement.

         13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original. It shall not be
necessary when making proof of this Agreement to account for more than one
counterpart.

         14. Headings. All headings in this Agreement are for convenience only
and shall not affect the meaning of any provision in this Agreement.

         15. Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon, the Company and any corporation with which the Company
merges, or consolidates or to which the Company sells all or substantially all
of its assets, and upon the Employee and his executors, administrators, heirs
and legal representatives. This Agreement may not be assigned by the Employee.

         16. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York without reference to the
conflict of laws principles thereof.

                                       8
<PAGE>   9
         IN WITNESS WHEREOF, the Employee has executed this Agreement and the
Company has caused this Agreement to be executed and delivered by a duly
authorized officer as of the day and year first above written.

                                       COMPANY:

                                       HANOVER CAPITAL MORTGAGE HOLDINGS, INC.

                                       By:
                                           -------------------------------------
                                       Name: John A. Burchett
                                       Title: President

                                       EMPLOYEE:

                                       -----------------------------------------
                                       Thomas P. Kaplan

                                       9

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