Document:

Exhibit 10.59

 

Montpelier Re Holdings Ltd.

 

February 25, 2014

 

Christopher L. Harris

Montpelier House

94 Pitts Bay Road

Pembroke, Bermuda  HM08

 

Re:  Assignment of Director Remuneration paid by Blue Capital Reinsurance Holdings Ltd.

 

Dear Chris:

 

This letter agreement relates to your service as a director on the Board of Directors of Blue Capital Reinsurance Holdings Ltd. (“BCRH”).  For so long as you serve as a director of BCRH and are an employee of Montpelier Re Holdings Ltd. (the “Company”), you hereby agree to assign to the Company your rights to any remuneration, including but not limited to cash, equity, equity-based awards and expense reimbursements, paid, payable or granted to you in your capacity as a director of BCRH.  For the avoidance of doubt, this letter agreement shall not apply to (a) reimbursement by BCRH of out-of-pocket expenses for which you personally paid or (b) any compensation payable to you by BCRH other than in your capacity as a director of BCRH.

 

Intending to be legally bound hereby, the parties have executed this letter agreement on the dates set forth below.

 

	
 
    	
MONTPELIER   RE HOLDINGS LTD.,
    
	
 
    	
 
    
	
 
    	
      by
    	
 
    
	
 
    	
 
    	
/s/ Anthony Taylor
    
	
 
    	
 
    	
Name:   Anthony Taylor
    
	
 
    	
 
    	
Title:   Chairman of the Board
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/ Christopher L. Harris
    
	
 
    	
 
    	
Christopher   L. HarrisExhibit 10.60

 

Montpelier Re Holdings Ltd.

 

February 25, 2014

 

William Pollett

Montpelier House

94 Pitts Bay Road

Pembroke, Bermuda  HM08

 

Re:  Assignment of Director Remuneration paid by Blue Capital Reinsurance Holdings Ltd.

 

Dear Bill:

 

This letter agreement relates to your service as a director on the Board of Directors of Blue Capital Reinsurance Holdings Ltd. (“BCRH”).  For so long as you serve as a director of BCRH and are an employee of Montpelier Re Holdings Ltd. (the “Company”), you hereby agree to assign to the Company your rights to any remuneration, including but not limited to cash, equity, equity-based awards and expense reimbursements, paid, payable or granted to you in your capacity as a director of BCRH.  For the avoidance of doubt, this letter agreement shall not apply to (a) reimbursement by BCRH of out-of-pocket expenses for which you personally paid or (b) any compensation payable to you by BCRH other than in your capacity as a director of BCRH.

 

Intending to be legally bound hereby, the parties have executed this letter agreement on the dates set forth below.

 

	
 
    	
MONTPELIER   RE HOLDINGS LTD.,
    
	
 
    
	
 
    	
      by
    	
 
    
	
 
    	
 
    	
/s/ Anthony Taylor
    
	
 
    	
 
    	
Name:   Anthony Taylor
    
	
 
    	
 
    	
Title:   Chairman of the Board
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/ William Pollett
    
	
 
    	
 
    	
William PollettExhibit 4.3

 

	
 
    	
Richard J. Bradfield
    
	
 
    	
Senior   Vice President and Treasurer
    
	
 
    	
PHH   Corporation
    
	
 
    	
3000   Leadenhall Road
    
	
 
    	
Mt.   Laurel, NJ 08054
    

 

Securities and Exchange Commission

100 F Street, NE

Washington, DC 20549

 

February 26, 2014

 

Subject:   PHH Corporation Annual Report on Form 10-K for the fiscal year ended December 31, 2013 — File No. 001-07797

 

To whom it may concern:

 

Neither PHH Corporation (the “Company”) nor any of its consolidated subsidiaries has outstanding any instrument with respect to long-term debt not being registered under which the total amount of securities authorized thereunder exceeds 10% of the total assets of the Company and its subsidiaries on a consolidated basis other than those instruments filed or incorporated by reference as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013. In accordance with paragraph (b)(4)(iii) of Item 601 of Regulation S-K (17 CFR Sec. 229.601), the Company hereby agrees to furnish to the Securities and Exchange Commission, upon request, a copy of each instrument that defines the rights of holders of such long term debt and that is not filed or incorporated by reference as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

 

Very truly yours,

 

PHH Corporation

 

	
/s/   Richard J. Bradfield
    	
 
    	
 
    
	
Richard   J. Bradfield
    	
 
    
	
Senior   Vice President and TreasurerExhibit 10.7.12

 

FORM OF PHH CORPORATION

 

2014 PERFORMANCE RESTRICTED STOCK UNIT

AWARD NOTICE

 

We are pleased to notify you that PHH Corporation (the “Company”) has awarded you this 2014 Performance Restricted Stock Unit Award.   The Performance Restricted Stock Unit Award represents the Company’s unfunded and unsecured promise to issue shares of the Company’s Stock at a future date subject to the terms and conditions of this Performance Restricted Stock Unit Award Notice (the “Award Notice”), the attached Performance Restricted Stock Unit Award Agreement (the “Agreement”), and the PHH Corporation Amended and Restated 2005 Equity and Incentive Plan, as amended (the “Plan”).  This Award Notice constitutes part of, and is subject to, the terms and provisions of 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.

 

	
Grantee:
    	
[Name]
    
	
 
    	
 
    
	
Participant #:
    	
[ID]
    
	
 
    	
 
    
	
Grant Date:
    	
[                              ]
    
	
 
    	
 
    
	
Target Shares:
    	
[          ]
    
	
 
    	
 
    
	
Maximum Shares:
    	
[          ]
    
	
 
    	
 
    
	
Achieved Percentage:
    	
Total   Shareholder Return (“TSR”) Achieved Percentage + Compounded Annual Growth Rate   (“CAGR”) Achieved Percentage3
    
	
 
    	
 
    
	
Earned Shares:
    	
The Earned   Shares are the shares of Stock determined by multiplying the Target Shares by   the Achieved Percentage based on the respective Performance Levels achieved   by the Company for the Target Measurement Periods as described in the charts   below, and as determined by the Human Capital and Compensation Committee (the   “Committee”) in its discretion.
    
	
 
    	
 
    
	
Settlement:
    	
Subject to the   terms of the Agreement and the Plan, the Earned Shares will be paid on or   after [                        ],   and on or before [                            ]   (the date of payment is referred to herein as the “Settlement Date”).  Except as provided in the Award Agreement,   failure to achieve any Performance Level during the Target Measurement Period   shall result in the forfeiture of your rights under this Award and   termination of the Agreement.
    

 

	
 
    	
 
    

 

3 The Committee may exercise negative discretion to reduce the Achieved Percentage and the amount payable under this Award prior to the earlier of payment of the Award or a Change in Control. Such discretion may be exercised based on the Committee’s subjective determination (or the Committee’s determination based upon a recommendation of the Company’s management) of the extent to which the Grantee has achieved such individual goals for the TMP, if any, as the Committee may establish or based on any other factors the Committee deems necessary or appropriate in its sole and absolute discretion.

 

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TSR Target Measurement
    	
 
    
	
Period (“TSR TMP”):
    	
[                     ]  – [                                ]
    
	
 
    	
 
    
	
CAGR Target
    	
 
    
	
Measurement Period
    	
 
    
	
(“CAGR TMP”):
    	
[                     ]  – [                                ]
    
	
 
    	
 
    
	
Target Measurement
    	
 
    
	
Period (“TMP”):
    	
The period spanning   both the TSR TMP and CAGR TMP
    

 

Performance Levels:  Total Shareholder Return (“TSR”)

 

As long as PHH’s TSR is positive, the schedule below will apply in determining the TSR Achieved Percentage:

 

	    
 
    
    
	    
Relative TSR Achieved Percentile Rank:
    
    
	    
 
    
    
	
Performance Level
    	
 
    	
 
    	
TSR Percentile Ranking
    	
 
    	
 
    	
TSR Achieved
   Percentage
    	
 
    	
 
    	
Number of
   Earned Shares*
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Maximum
    	
 
    	
 
    	
[67th Percentile   and Above]
    	
 
    	
 
    	
[75%]
    	
 
    	
 
    	
[  ]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Target
    	
 
    	
 
    	
[55th Percentile]
    	
 
    	
 
    	
[50%]
    	
 
    	
 
    	
[  ]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Threshold
    	
 
    	
 
    	
[33rd Percentile]
    	
 
    	
 
    	
[25%]
    	
 
    	
 
    	
[  ]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Below Threshold
    	
 
    	
 
    	
[Below the 33rd Percentile]
    	
 
    	
 
    	
[0%]
    	
 
    	
 
    	
0
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

* The TSR Achieved Percentage, and therefore the number of Earned Shares, for TSR performance between the levels set forth in the table above and above the “Threshold” level will be determined based on straight-line interpolation.  Fractional shares shall be delivered in cash.

 

TSR shall be calculated for each of the component companies in the KBW Bank Index, as defined below, for the TSR TMP, and shall be listed in the order of their respective TSR performance from highest to lowest.   PHH’s TSR will be percentile ranked relative to the list of TSR performance of the component companies to determine TSR Performance and the  resulting number of Earned Shares.

 

The component companies in the KBW Bank Index will be the component companies in the index for the entire TSR TMP.   Notwithstanding the foregoing, component companies in the KBW Bank Index on the first day of the TSR TMP that declare bankruptcy during the TSR TMP shall be included in the list of TSR performance of the component companies as a negative one hundred percent (-100%).

 

If the PHH TSR is negative, the TSR Achieved Percentage will be 0%.

 

TSR = Price Appreciation + Dividend Yield

 

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Price appreciation is determined by taking the change in price over the TSR TMP and dividing it by the closing price on the first day of the TSR TMP.  The change in price is determined by taking the closing price on the last day of the TSR TMP and subtracting from it the closing price on the first day of the TSR TMP.

 

The dividend yield is determined by taking the sum of all dividends paid during the TSR TMP (for the KBW Bank Index as a whole, this shall be the sum of the actual dividends paid by each component of the index multiplied by the weight of the index component), and dividing this by the closing price on the first day of the TSR TMP.

 

For both the price appreciation and dividend yield, the closing price as of the first and last days of the measurement period will be calculated by using a 20-trading day trailing average price (i.e. averaging the closing price for the 20 trading days up to and including the beginning date or closing date, as applicable).

 

Performance Levels:  Compound Annual Growth Rate (“CAGR”)

 

	    
 
    
    
	    
CAGR Achieved Percentage:
    
    
	    
 
    
    
	
Performance Level
    	
 
    	
 
    	
CAGR
    	
 
    	
 
    	
CAGR Achieved
   Percentage
    	
 
    	
 
    	
Number of
   Earned Shares*
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Maximum
    	
 
    	
 
    	
[At least 7.0%]
    	
 
    	
 
    	
[75%]
    	
 
    	
 
    	
[   ]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Target
    	
 
    	
 
    	
[5.0%]
    	
 
    	
 
    	
[50%]
    	
 
    	
 
    	
[   ]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Threshold
    	
 
    	
 
    	
[3.0%]
    	
 
    	
 
    	
[25%]
    	
 
    	
 
    	
[   ]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Below Threshold
    	
 
    	
 
    	
[Less than 3.0%]
    	
 
    	
 
    	
[0%]
    	
 
    	
 
    	
0
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

* The CAGR Achieved Percentage, and therefore the number of Earned Shares, for CAGR performance between the levels set forth in the table above and above the “Threshold” level will be determined based on straight-line interpolation.  Fractional shares shall be delivered in cash.

 

	
CAGR =
    	
 
    	
[Book   Value @ last day of CAGR TMP + Dividends paid over TMP] ^ [1/3] - 1
    
	
 
    	
 
    	
[Book Value @ first day of CAGR   TMP]
    

 

In the above formula, “Book Value” means the fully diluted tangible book value per share as described in this paragraph.  The fully diluted tangible book value per share is determined by first calculating the average tangible book value.  Except as otherwise provided in the Agreement, the average tangible book value represents the average of the tangible book values for each of the three months up to and including the month end date as of the beginning and ending date of the TMP, as applicable. The tangible book value is calculated by reducing PHH stockholders equity by the balance of goodwill and intangible assets.  Except as otherwise provided in the Agreement, fully diluted tangible book value per share is calculated by dividing the average tangible book value as of the applicable date by the weighted average number of fully diluted shares for the quarter ending as of the beginning and ending dates of the TMP, as applicable. “Dividends paid” means the total dollar value of dividends paid on all classes of PHH stock over the term of the TMP.

 

- 3 -

 

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

 

	
PHH CORPORATION
    	
AGREED TO AND ACCEPTED
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    	
Name:
    	
 
    
	
Title:
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
Date:
    	
 
    
						

 

 

 

RETAIN THIS NOTIFICATION AND YOUR AWARD AGREEMENT WITH
 YOUR IMPORTANT DOCUMENTS AS A RECORD OF THIS AWARD.

 

- 4 -

 

PHH CORPORATION

PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT

 

PHH Corporation, a Maryland corporation (the “Company”) has granted to the individual (the “Grantee”) named in the Performance Restricted Stock Unit Award Notice to which this Performance Restricted Stock Unit Award Agreement (the “Agreement”) is attached, a Performance Restricted Stock Unit Award relating to the Company’s common stock, par value $0.01 per share, subject to the terms and conditions set forth in the Award Notice and this Agreement.   This Performance Restricted Stock Unit Award (the “Award”) has 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 an Award to the Grantee, subject to the terms and conditions of the Plan, the Award Notice and this Agreement.

 

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

 

1.         The Plan.  This Award is granted pursuant to the Plan.  A copy of the prospectus for the Plan is attached hereto and the terms of the 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.         Grant of Award.

 

a.         Subject to the terms and conditions set forth in the Plan and this Agreement, the Grantee is hereby granted this Award.

 

b.         The Grantee is not required to make any monetary payment (other than applicable tax withholding, if any, and payment of the par value of the Stock, if required by law) as a condition to receiving shares of Stock issued upon settlement of the Award.

 

c.         If the Grantee has not signed a restrictive covenant agreement in a form acceptable to the Company by no later than December 20, 2013, the Award shall be forfeited.  For this purpose, if the Grantee has signed a restrictive covenant agreement that is still in effect in connection with the receipt of an award under the Plan since September 1, 2012, the signing of such agreement will be deemed to have met the requirement of this paragraph and the terms of that restrictive covenant agreement shall remain in full force and effect.

 

3.         Termination of Employment.  Notwithstanding any other provision of the Plan or Agreement to the contrary, except as provided in Section 4, upon the termination of the Grantee’s employment with the Company and its Subsidiaries for any reason whatsoever during the TMP, the Award shall immediately and automatically terminate and no settlement will occur.

 

- 1 -

 

4.         Settlement.

 

a.         Form of Settlement.    Except in the case of a Change in Control, the Company shall issue to the Grantee the Earned Shares, as described in the Award Notice, after any adjustments as provided under Section 5 of the Plan upon settlement of the Award; provided, however, that the Grantee shall remain required to remit to the Company such amount that the Company determines is necessary to meet all required minimum withholding taxes.  In the case of a settlement following a Change in Control, as described in 4b. and 4d. below, any Earned Shares shall be settled in cash.

 

b.         Termination Without Cause or Retirement. If the Grantee’s employment is terminated during the TMP (i) by the Company and its Affiliates without Cause (as defined in this paragraph b.) or (ii) due to the Grantee’s voluntary resignation from the Company and its Affiliates on or after attaining age sixty-five (65) (a “Retirement”), the Award shall become 100% vested in the Earned Shares and all such Earned Shares will be settled on the Settlement Date.  In addition, if a Change in Control (as defined in subsection d.) occurs after such termination without Cause or Retirement, while the Grantee is not employed by the Company or an Affiliate, and before the end of the TMP, the settlement of the Earned Shares will be accelerated and they will be settled as soon as practicable after the Change in Control and the TSR Achieved Percentage and the CAGR Achieved Percentage shall each be the percentage based on actual performance through the date of such Change in Control; provided, however, that if the Change in Control occurs after the end of the CAGR TMP, the CAGR Achieved Percentage will be based on the Performance Level for the CAGR TMP.  Notwithstanding the foregoing, in the event the Grantee violates any non-competition, non-solicitation, non-disclosure, or other restrictive covenant agreement with the Company, its Affiliates, or its Subsidiaries prior to the Settlement Date or Change in Control, then the Grantee shall not be vested in any portion of the Earned Shares and the entire Award will be forfeited.

 

Notwithstanding anything contained in this Award to the contrary, the Grantee’s transfer to a Subsidiary that is not an Affiliate prior to the occurrence of a Change in Control will not be deemed a termination of employment without Cause or a resignation for purposes of this paragraph b.  Instead, the Grantee will continue to be considered employed for purposes of the vesting provisions of this Award during the period the Grantee is employed by such Subsidiary, including the requirement to achieve a Performance Level during the TMP; provided, however, if a Change in Control occurs during the TMP while the Grantee is employed by a Subsidiary that is not an Affiliate (and not employed by the Company or an Affiliate), the Earned Shares will be accelerated and settled as soon as practicable after the Change in Control and the TSR Achieved Percentage and the CAGR Achieved Percentage shall each be the percentage based on actual performance through the date of such Change in Control; provided, however, that if the Change in Control occurs after the end of the CAGR TMP, the CAGR Achieved Percentage will be based on the Performance Level for the CAGR TMP.

 

For purposes of this Award, “Cause” means any one of the following:  (1) a material failure of the Grantee to substantially perform the Grantee’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 Grantee’s job or any instance of gross negligence in the

 

- 2 -

 

performance of the Grantee’s duties as an employee of the Company or one of its Subsidiaries; (5) any breach by the Grantee of any fiduciary obligation owed to the Company or any Subsidiary or any material element of the Company’s Code of Business Ethics and Conduct or other applicable workplace policies; or (6) failure by the Grantee to perform Grantee’s job duties for the Company or any Subsidiary to the best of Grantee’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.

 

c.         Death or Disability. If during the TMP (i) the Grantee’s employment is terminated due to the death of the Grantee or (ii) the Grantee becomes subject to a Disability, the Award shall become 100% vested in the Earned Shares and all such Earned Shares will be settled as soon as practicable following the Grantee’s death or becoming subject to a Disability.   For purposes of determining the Earned Shares, the TSR Achieved Percentage and the CAGR Achieved Percentage shall each be the percentage based on actual performance through the end of the most recent calendar quarter for which a Form 10-Q (or any successor form) has been filed with the Securities and Exchange Commission prior to the date of death or Disability; provided, however, that if the death or Disability occurs after the end of the CAGR TMP, the CAGR Achieved Percentage will be based on the Performance Level for the CAGR TMP.

 

For purposes of this Award, the Grantee is subject to a “Disability” if the Grantee is (1) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months or (2) by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company and its Affiliates.

 

d.         Change in Control.   If a Change in Control occurs while the Grantee is employed with the Company or its Affiliates and the Grantee’s employment is terminated during the TMP and within two years after the Change in Control (i) by the Company and its Affiliates without Cause (as defined in Section 4b.), (ii) due to the Grantee’s resignation for Good Reason (as defined in this subsection d.), or (iii) due to the Grantee’s Retirement, the Grantee will become 100% vested in the Earned Shares and all such Earned Shares will be settled as soon as practicable following the termination of employment.  The TSR Achieved Percentage and the CAGR Achieved Percentage shall each be the percentage based on actual performance through the date of such Change in Control provided, however, that if the Change in Control occurs after the end of the CAGR TMP, the CAGR Achieved Percentage will be based on the Performance Level for the CAGR TMP.

 

For purposes of this Award, “Change in Control” means the occurrence of any of the following:

 

(i)         the acquisition by any person (or by more than one person acting as a group) of stock of the Company that, together with the stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of Company stock (excluding any acquisition by any person (or more than one person acting as a group) that already owns more than 50% of the total fair market value or total voting

 

- 3 -

 

power of the Company’s stock) that constitutes a “change in the ownership” of the Company under Code Section 409A and the regulations thereunder;

 

(ii)        one person (or more than one person acting as a group) acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition) ownership of the Company’s stock possessing 30% or more of the total voting power of the Company’s stock in a manner that constitutes a “change in effective control” of the Company under Code Section 409A and the regulations thereunder;

 

(iii)       a majority of the members of the Company’s Board of Directors are replaced during any twelve (12) month period by directors whose appointment or election is not endorsed by a majority of the Board of Directors before the date of appointment or election in a manner that constitutes a “change in effective control” of the Company under Code Section 409A and the regulations thereunder; or

 

(iv)       one person (or more than one person acting as a group) acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition) assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Company immediately before such acquisition(s) in a manner that constitutes a “change in the ownership of a substantial portion of the assets” of the Company under Code Section 409A and the regulations thereunder.

 

For purposes of this Award, “Good Reason” means any one of the following (i) a material diminution in Grantee’s base compensation (from the amount in effect on the date of the Change in Control); (ii) a material diminution in authority, duties, or responsibilities of Grantee; (iii) a material diminution in the budget over which Grantee retains authority; (iv) a material change in the geographic location at which Grantee is required to perform services; and (v) any other action or inaction that constitutes a material breach of this Agreement; provided, however, that for the Grantee to be able to resign for “Good Reason,” the Grantee must give the Company notice of the above conditions within 90 days after the condition first exists, the Company must not have not remedied the condition within 30 days after receiving written notice, and the Grantee must resign within 60 days after the Company’s failure to remedy.

 

Notwithstanding anything in the Plan, the Award, this Agreement, or any other agreement (written or oral) to the contrary, if Grantee is a “specified employee” (within the meaning of Code Section 409A) on the date of termination of employment, any payments made with respect to such termination of employment under this Award will be delayed to the extent necessary to comply with Section 409A(a)(2)(B)(i) of the Code, and such payments or benefits will be paid or distributed to Grantee during the five-day period commencing on the earlier of: (i) the expiration of the six-month period measured from the date of Grantee’s termination of employment, or (ii) the date of Grantee’s death.  Upon the expiration of the applicable six-month period under Section 409A(a)(2)(B)(i) of the Code, all payments deferred pursuant to this paragraph will be paid to Grantee (or Grantee’s estate, in the event of Grantee’s death) in a lump sum payment.   Any remaining payments and benefits due under the Award will be paid as otherwise provided in the Award.

 

The provisions of this paragraph d. are subject to the applicable provisions of paragraph b. as they relate to the Grantee’s transfer of employment to a Subsidiary that is not an Affiliate.

 

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e.         Certificate Registration.  The certificate for the shares issued in settlement of the Award shall be registered in the name of the Grantee, or, if applicable, in the names of the Grantee’s heirs.

 

f.          Restrictions on Grant of the Award and Issuance of Shares.  The grant of this Award and issuance of shares of Stock upon settlement of the Award shall be subject to and in compliance with all applicable requirements of federal, state, or foreign law with respect to such securities.  No shares of Stock may be issued hereunder if the issuance of such shares would constitute a violation of any applicable federal, state, or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed.   The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance of any shares subject to the Award shall relieve the Company of any liability in respect of the failure to issue such shares as to which such requisite authority shall not have been obtained.  As a condition to the settlement of the Award, the Company may require the Grantee to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

 

g.         Fractional Shares.  The Company shall not be required to issue fractional shares upon the settlement of the Award.

 

h.         Dividend Equivalents.  No dividend equivalents will be paid with respect to the Award.

 

i.          Definition of Affiliate.  For purposes of this Section, “Affiliate” means any entity that, together with the Company, is part of the “service recipient” within the meaning of Code Section 409A and the regulations thereunder.

 

5.         Tax Obligations.  As a condition to the granting of the Award and the settlement thereof, the Grantee agrees to remit to the Company or any of its applicable Subsidiaries such sum as may be necessary to discharge the Company’s or such Subsidiary’s obligations with respect to any tax, assessment or other governmental charge imposed on property or income received by the Grantee pursuant to this Agreement and the Award.  Accordingly, the Grantee agrees to remit to the Company or an applicable Subsidiary any and all required minimum withholding taxes.  To satisfy such obligation, Grantee agrees to have the Company withhold a number of whole shares of Stock otherwise deliverable to Grantee in settlement of the Award having a Fair Market Value, as of the date on which the tax withholding obligations arise, not in excess of the amount of such tax withholding obligations determined by the applicable minimum statutory withholding rates determined by the Company.

 

6.         No Rights to Continued Employment; Loss of Office.  Neither this Agreement nor the Award shall be construed as giving the Grantee any right to continue in the employ of the Company or any of its Subsidiaries, or shall interfere in any way with the right of the Company to terminate such employment.   Notwithstanding any other provision of the Plan, the Award, this Agreement or any other agreement (written or oral) to the contrary, for purposes of the Plan and the Award, a termination of employment shall be deemed to have occurred on the date upon which the Grantee has a “separation from service” within the meaning of Section 409A of the Code following the provision of any notification of termination or resignation from employment, and without regard to any period of notice of termination of employment (whether expressed or

 

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implied) or any period of severance or salary continuation.  Notwithstanding any other provision of the Plan, the Award, this Agreement, or any other agreement (written or oral) to the contrary, the Grantee shall not be entitled (and by accepting an Award, thereby irrevocably waives any such entitlement), by way of compensation for loss of office or otherwise, to any sum or other benefit to compensate the Grantee for the loss of any rights under the Plan as a result of the termination or expiration of an Award in connection with any termination of employment.  No amounts earned pursuant to the Plan or any Award shall be deemed to be eligible compensation in respect of any other plan of the Company or any of its Subsidiaries, except as may otherwise be provided therein.

 

7.         Rights as a Stockholder.  The Grantee shall have no rights as a stockholder with respect to any shares which may be issued in settlement of the Award until the date such shares are actually issued (as evidenced by a stock certificate or an appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions, or other rights for which the record date is prior to the date such certificate is issued, except as provided in Section 5 of the Plan.

 

8.         Clawback.  This Award and any stock issued or cash paid pursuant to this Award is expressly subject to any “clawback policy” now or hereafter adopted by the Board or its designee, as may be amended from time to time, or any recoupment permitted or required by law.

 

In addition, until such time subsequent to the Grant Date that the Company adopts a “clawback policy” that is applicable to the Grantee that expressly supersedes this paragraph, this Award shall be forfeited and the Grantee shall be obligated to return to the Company any shares previously issued under this Award or a cash payment equal to the value of the shares at the time such shares were sold or transferred, if the Committee determines in good faith (a) that the Grantee has violated the terms of any non-competition, non-solicitation, non-disclosure, or other restrictive covenant agreement with the Company and/or one or more of its Subsidiaries or (b) that, within three (3) years of the date the Award is settled, the Grantee (i) experiences a termination of employment for Cause, or the Committee determines after employment termination that the Grantee’s employment could have been terminated for Cause, (ii) engaged in conduct that causes material financial or reputational harm to the Company or Subsidiaries, (iii) provided materially inaccurate information related to publicly reported financial statements of the Company and its Subsidiaries, (iv) provided a material misrepresentation upon which the achievement of the Performance Levels was determined, (v) improperly, or with gross negligence, failed to identify, assess or report risks material to the Company or its Subsidiaries that were within the scope of the Grantee’s responsibility and of which the Grantee was aware or should have been aware based on facts reasonably available to the Grantee, or (vi) violated the Company’s Code of Business Ethics and Conduct, is under investigation for a regulatory matter due to gross negligence or willful misconduct in the performance of the Grantee’s duties for the Company and its Subsidiaries, or otherwise engaged in gross misconduct with respect to the Company and its Subsidiaries.

 

9.         Legends. The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates representing shares of Stock issued pursuant to this Agreement.  The Grantee shall, at the request of the Company, promptly present to the Company any and all certificates representing shares acquired pursuant to this Agreement in the possession of the Grantee in order to carry out the provisions of this Section.

 

10.       Nontransferability.    Prior to the issuance of shares of Stock pursuant to this Agreement, neither this Agreement nor any shares subject to this Agreement shall be subject in

 

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any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Grantee, except transfer by will or by the laws of descent and distribution.  All rights with respect to the Agreement shall be exercisable during the Grantee’s lifetime only by the Grantee or the Grantee’s guardian or legal representative.

 

11.       Compliance with Stock Ownership Guidelines.  Except as provided in the PHH Corporation Stock Ownership and Retention Guidelines adopted November 14, 2011, as amended or superseded from time to time (the “Guidelines”), the Grantee may not divest shares received under the Award until the ownership requirements of the Guidelines have been met.

 

12.       Amendments.  The Committee may amend this Agreement at any time; provided, however, that no such amendment may adversely affect the Grantee’s rights under this Agreement without the consent of the Grantee, except to the extent such amendment is reasonably determined by the Committee in its sole discretion to be necessary to comply with applicable law or to prevent a detrimental accounting impact.  No amendment or addition to this Agreement shall be effective unless in writing.

 

13.       Section 409A.   This Award is intended to comply with, or otherwise be exempt from, Section 409A of the Code.  This Award shall be administered, interpreted, and construed in a manner consistent with such Code section.   For purposes of this Award, “termination of employment” and terms of similar import shall be deemed to mean “separation from service” within the meaning of Code Section 409A.  Should any provision of this Agreement or the Award be found not to comply with, or otherwise be exempt from, the provisions of Section 409A of the Code, it shall be modified and given effect, in the sole discretion of the Committee and without requiring the Grantee’s consent (notwithstanding the provisions of Section 12 above), in such manner as the Committee determines to be necessary or appropriate to comply with, or to effectuate an exemption from, Section 409A of the Code.

 

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, (or applicable non-U.S. equivalent for notices mailed from outside the United States) 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 Grantee, to the Grantee’s last known address contained in the personnel records of the Company.

 

15.       Binding Effect.  This Agreement shall inure to the benefit of the successors and assigns of the Company and, subject to the restrictions on transfer set forth herein, be binding upon the Grantee and the Grantee’s heirs, executors, administrators, successors and assigns.

 

16.       Failure to Enforce Not a Waiver.  The failure of the Company to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

 

17.       Integrated Agreement.  The Award Notice, this Agreement and the Plan constitute the entire understanding and agreement of the Grantee 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 Grantee 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.   The Grantee’s participation in the Plan is voluntary and has not been induced by a promise of employment or

 

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continued employment with the Company or a Subsidiary or affiliate of the Company. Notwithstanding the foregoing, the terms of any restrictive covenant in effect prior to the Grant Date of this Award 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 Delaware, 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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