Exhibit 10.2

 

PHH CORPORATION

 

2011 NON-QUALIFIED STOCK OPTION

AWARD NOTICE

 

We are pleased to notify you that PHH Corporation (the “Company”) has awarded
you Non-Qualified Stock Options (each an “Option” or collectively, the
“Options”).  The Options entitle you to purchase shares of the Company’s Stock. 
The number of shares you may purchase and the exercise price at which you may
purchase them are specified below.  This Non-Qualified Stock Option Award Notice
(the “Award Notice”) constitutes part of and is subject to the terms and
provisions of the attached Non-Qualified Stock Option Award Agreement (the
“Agreement”) and the Plan.  Capitalized terms used but not defined in this Award
Notice shall have the meanings set forth in the Agreement or the Plan.

 

Optionee:

 

[Name]

 

 

 

Participant #:

 

[ID]

 

 

 

Grant Date:

 

                   , 2011

 

 

 

Number of Shares:

 

[# of shares]

 

 

 

Exercise Price:

 

$20.00

 

 

 

Expiration Date:

 

The Options shall expire at 5:00 p.m. Eastern Time on the 10th anniversary of
the Grant Date, unless fully exercised or terminated earlier.

 

 

 

Vesting Schedule:

 

Subject to the provisions of the Agreement and the Plan, and provided that you
remain continuously employed with the Company through December 31, 2013, the
Options shall become 100% vested.

 

We congratulate you on the recognition of your importance to our organization
and its future.

 

 

PHH CORPORATION

 

 

 

 

 

By:

 

 

 

 

Name: Jerome J. Selitto

 

Title: President & CEO, PHH Corporation

 

Date:                    , 2011

 

RETAIN THIS NOTIFICATION AND YOUR AWARD AGREEMENT WITH

YOUR IMPORTANT DOCUMENTS AS A RECORD OF THIS AWARD.

 

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PHH CORPORATION

 

NON-QUALIFIED STOCK OPTION

AWARD AGREEMENT

 

PHH Corporation, a Maryland corporation (the “Company”) has granted to the
Optionee named in the Award Notice to which this Non-Qualified Stock Option
Award Agreement (the “Agreement”) is attached, an award consisting of
non-qualified stock options (each an “Option,” and collectively, the “Options”),
subject to the terms and conditions set forth in the Award Notice and this
Agreement.  The Options have been granted pursuant to the PHH Corporation
Amended and Restated 2005 Equity and Incentive Plan, as amended (the “Plan”).

 

WHEREAS, the Human Capital and Compensation Committee of the Board of Directors
of the Company (the “Committee”) has the authority under and pursuant to the
Plan to grant and establish the terms of awards to eligible employees of the
Company and its Subsidiaries; and

 

WHEREAS, the Committee desires to grant non-qualified stock options to the
Optionee, subject to the terms of the Plan, the Award Notice, and this
Agreement.

 

In consideration of the provisions contained in this Agreement, the Company and
the Optionee agree as follows:

 

1.                                       The Plan.  The Options granted to the
Optionee hereunder are granted pursuant to the Plan.  A copy of the prospectus
for the Plan is attached hereto and the terms of such Plan are hereby
incorporated in this Agreement.  Terms used in this Agreement which are not
defined in this Agreement shall have the meanings used or defined in the Plan.

 

2.                                       Number of Shares and Purchase Price. 
The Optionee is hereby granted an option (an “Option”) to purchase the number of
shares of Stock specified on the attached Award Notice (the “Option Shares”) at
the Exercise Price per Share specified on the Award Notice, pursuant to the
terms of this Agreement and the provisions of the Plan.

 

3.                                       Term of Option and Conditions of
Exercise.

 

(a)                                  The Option has been granted as of the Grant
Date and shall terminate on the Expiration Date specified on the Award Notice,
subject to earlier termination as provided herein and in the Plan.  Upon the
termination or expiration of the Option, all rights of the Optionee in respect
of such Option hereunder shall cease.

 

(b)                                 Subject to the provisions of the Plan and
this Agreement, except as may otherwise be provided by the Committee, the Option
shall vest in accordance with the Vesting Schedule set forth on the Award
Notice, so long as the Optionee continues to be employed by or provide service
to the Company or a Subsidiary; provided, however, that

 

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(i)                                     the Option shall become fully vested and
exercisable upon the death of the Optionee or the termination of the Optionee’s
employment or service due to the disability (as defined in the Company’s
long-term disability plan) of the Optionee; and

 

(ii)                                  if the Optionee does not sign a
restrictive covenant agreement in the form presented by the Company within
forty-five (45) days after the Grant Date, the Option shall be forfeited.

 

(c)                                  Upon the occurrence of a Change in Control
that occurs on or before December 31, 2013 and while the Optionee is employed
with the Company or its Subsidiaries, the Optionee will become vested to the
extent provided in the chart below:

 

Date of Change in Control

 

Percent Vested

 

Before January 1, 2012

 

0

%

On or after January 1, 2012, but before January 1, 2013

 

25

%

On or after January 1, 2013, but before December 31, 2013

 

50

%

December 31, 2013

 

100

%

 

provided, however, that if the surviving company following the Change in Control
either (A) continues this Option in effect (subject to Section 5 of the Plan) or
(B) replaces this Option with an option to receive the surviving company stock
in a manner that complies with Code Section 409A and the regulations thereunder
and, in either case, does not extend the maximum period for vesting under the
Vesting Schedule provided under this Option, then no accelerated vesting shall
occur. Options that do not vest according to the above chart will continue to be
subject to the Vesting Schedule in the Award Notice.

 

4.                                       Termination of Employment.

 

(a)                                  Except as may otherwise be provided by the
Committee, if the Optionee’s employment with or service to the Company or a
Subsidiary is terminated, the Options that are then unexercisable will terminate
immediately upon such termination of employment or service.

 

(b)                                 Notwithstanding subsection (a), if the
Optionee’s employment is terminated by the Company and its Subsidiaries without
Cause (as defined in subsection (c)), the Award shall become vested in
accordance with the following schedule:

 

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Date of Termination of 
Employment Without Cause

 

Percent Vested

 

Before January 1, 2012

 

0

%

On or after January 1, 2012, but before January 1, 2013

 

25

%

On or after January 1, 2013, but before December 31, 2013

 

50

%

December 31, 2013

 

100

%

 

Notwithstanding the foregoing, in the event the Optionee violates any
non-competition, non-solicitation, non-disclosure, or other restrictive covenant
agreement with the Company or its Subsidiaries prior to the date the Option is
exercised, then the Optionee shall not be vested and the entire Award will be
forfeited.

 

(c)                                  Excepts as may otherwise be provided by the
Committee, if the Optionee’s employment with or service to the Company or a
Subsidiary is terminated, the Options that are then exercisable will terminate
as follows:

 

(i)                                     If the Optionee’s employment terminates
by reason of such Optionee’s death or disability (as defined in the Company’s
long-term disability plan), the Option may be exercised, to the extent vested on
the date of termination, by the Optionee, the Optionee’s legal representative or
legatee for a period of two years from the date of death or disability or until
the Expiration Date, if earlier.

 

(ii)                                  If the Optionee’s employment is terminated
by the Company for Cause, the Options that are then exercisable will terminate
immediately as of the effective date of such termination.  For purposes of this
Award, “Cause” means any one of the following: (1) a material failure of the
Optionee to substantially perform the Optionee’s duties with the Company or its
Subsidiaries (other than failure resulting from incapacity due to physical or
mental illness); (2) any act of fraud, misappropriation, dishonesty,
embezzlement or similar conduct against, or relating to the assets of, the
Company or its Subsidiaries; (3) conviction (or plea of nolo contendere) of a
felony or any crime involving moral turpitude; (4) repeated instances of
negligence in the performance of the Optionee’s job or any instance of gross
negligence in the performance of the Optionee’s duties as an employee of the
Company or one of its Subsidiaries; (5) any breach by the Optionee of any
fiduciary obligation owed to the Company or any Subsidiary or any material
element of the Company’s Code of Ethics, the Company’s Code of Conduct or other
applicable workplace policies; or (6) failure by the Optionee to perform
Optionee’s job duties for the Company or any Subsidiary to the best of
Optionee’s ability and in accordance with reasonable instructions and directions
from the Board or its designee, and the reasonable workplace policies and
procedures established by the Company or any Subsidiary, as applicable, from
time to time.

 

(iii)                               If the Optionee’s employment terminates for
any reason other than by the Company for Cause or due to death or disability,
the Option may be exercised, to

 

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the extent vested on the date of termination, for a period of one year from the
date of termination or until the Expiration Date, if earlier.

 

5.                                       Exercise of Option.

 

The Option may only be exercised in accordance with the terms of the Plan and
the administrative procedures established by the Committee from time to time. 
The Optionee may pay the Exercise Price by:

 

(a)                                  delivery of cash, certified or cashier’s
check, money order or other cash equivalent acceptable to the Committee in its
discretion;

 

(b)                                 a broker-assisted cashless exercise
procedure satisfactory to the Company;

 

(c)                                  tender (via actual delivery or attestation)
to the Company of other shares of Stock which have a Fair Market Value on the
date of tender equal to the Exercise Price, provided that such shares have been
owned by the Optionee for a period of at least six months free of any
substantial risk of forfeiture or were purchased on the open market without
assistance, direct or indirect, from the Company; or

 

(d)                                 any combination of the foregoing.

 

6.                                       Adjustment upon Changes in
Capitalization.  The Option is subject to adjustment in the event of certain
changes in the capitalization of the Company, to the extent set forth in
Section 5 of the Plan.

 

7.                                       No Rights as a Stockholder.  The
Optionee shall not have any of the rights of a stockholder with respect to the
Option Shares until such Option Shares have been issued to the Optionee upon
exercise of the Options.  No adjustment will be made for dividends or
distributions or other rights for which the record date is prior to the date on
which such Option Shares are issued.

 

8.                                       Clawback.  This Award, and any stock
issued or cash paid pursuant to this Award, is expressly subject to any
“clawback policy” adopted by the Board or its designee.

 

9.                                       Nontransferability of Options.  These
Options are nontransferable otherwise than by will or the laws of descent and
distribution and during the Optionee’s lifetime, the Options may be exercised
only by the Optionee or, during the period in which the Optionee is under a
legal disability, by the Optionee’s guardian or legal representative.  Except as
provided above, the Options may not be assigned, transferred, pledged,
hypothecated or disposed of in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar process.

 

10.                                 Withholding of Taxes.  At the time the
Options are exercised, in whole or in part, or at any time thereafter as
requested by the Company, the Optionee hereby authorizes

 

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withholding from payroll or any other payment of any kind due to the Optionee
and otherwise agrees to make adequate provision for foreign, federal, state and
local taxes required by law to be withheld, if any, which arise in connection
with the Options.  The Company may require the Optionee to make a cash payment
to cover any withholding tax obligation as a condition of exercise of the
Options or issuance of share certificates representing Option Shares.

 

The Committee may, in its sole discretion, permit the Optionee to satisfy, in
whole or in part, any withholding tax obligation which may arise in connection
with the Options either by electing to have the Company withhold from the shares
of Stock to be issued upon exercise that number of Option Shares, or by electing
to deliver to the Company already-owned shares of Stock, in either case having a
Fair Market Value equal to the amount necessary to satisfy the statutory minimum
withholding amount due.

 

11.                                 Amendment.  This Agreement may be amended
from time to time by the Committee in its discretion; provided, however, that
this Agreement may not be modified in a manner that would have a materially
adverse effect on the Options or Option Shares as determined in the discretion
of the Committee, except as provided in the Plan or in a written agreement
signed by the Optionee and the Company.

 

12.                                 Entire Agreement.  This Agreement and the
Plan contain all of the understandings and agreements between the Company and
the Optionee concerning the Option and supersedes all earlier negotiations and
understandings, written or oral, between the parties with respect thereto.  The
Company and the Optionee have made no promises, agreements, conditions or
understandings, either orally or in writing, that are not included in this
Agreement or the Plan.

 

13.                                 Captions.  The captions and section numbers
appearing in this Agreement are inserted only as a matter of convenience.  They
do not define, limit, construe or describe the scope or intent of the provisions
of this Agreement.

 

14.                                 Notices.  Any notice or communication having
to do with this Agreement must be given by personal delivery or by certified
mail, return receipt requested, addressed, if to the Company or the Committee,
to the attention of the General Counsel of the Company at the principal office
of the Company and, if to the Optionee, to the Optionee’s last known address
contained in the personnel records of the Company.

 

15.                                 Binding Effect.  Each and all of the
provisions of this Agreement are binding upon and inure to the benefit of the
Company and the Optionee and their respective estate, successors and assigns,
subject to any limitations on transferability under applicable law or as set
forth in the Plan.

 

16.                                 Blackout Periods.  The Optionee acknowledges
that, from time to time as determined by the Company in its sole discretion, the
Company may establish “blackout periods” during which this Option may not be
exercised.  The Company may establish a blackout period for any reason or for no
reason.

 

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17.                                 Integrated Agreement.  The Award Notice,
this Agreement and the Plan constitute the entire understanding and agreement of
the Optionee and the Company with respect to the subject matter contained herein
or therein and supersedes any prior agreements, understandings, restrictions,
representations, or warranties among the Optionee and the Company with respect
to such subject matter other than those as set forth or provided for herein or
therein.  To the extent contemplated herein or therein, the provisions of the
Award Notice and the Agreement shall survive any settlement of the award and
shall remain in full force and effect.

 

18.                                 Governing Law.  This Agreement and the legal
relations between the parties shall be governed by and construed in accordance
with the internal laws of the State of Maryland, without effect to the conflicts
of laws principles thereof.

 

19.                                 Authority.  The Committee shall have full
authority to interpret and construe the terms of the Plan, the Award Notice, and
this Agreement.  The determination of the Committee as to any such matter of
interpretation or construction shall be final, binding and conclusive on all
parties.

 

*              *              *              *              *

 

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