Document:

Exhibit 10.7

Exhibit 10.7

MANAGEMENT UNIT SUBSCRIPTION AGREEMENT

(Series 1 Class F Units)

THIS MANAGEMENT UNIT SUBSCRIPTION AGREEMENT (this “Agreement”) is made as of ______________
___, 2011 by and between NMH Investment, LLC, a Delaware limited liability company (the
“Company”), and the individual named on the signature page hereto (the
“Executive”).

WHEREAS, on the terms and subject to the conditions hereof, the Executive desires to subscribe
for and acquire from the Company, and the Company desires to issue and provide or sell to the
Executive, the Company’s Series 1 Class F Common Units with a Participation Threshold (as defined
in the LLC Agreement (as defined below)) in the amount set forth on Schedule I attached hereto (the
“Class F Units”), in each case in the amounts set forth on Schedule I attached hereto, as
hereinafter set forth; and

WHEREAS, this Agreement is one of several agreements entered into or being entered into by the
Company with certain persons who are or will be key employees and/or directors of the Company or
one or more subsidiaries (collectively with the Executive, the “Management Investors”) as
part of an equity purchase plan designed to comply with Rule 701 promulgated under the Securities
Act (as defined below).

NOW, THEREFORE, in order to implement the foregoing and in consideration of the mutual
representations, warranties, covenants and agreements contained herein, the parties hereto agree as
follows:

1. Definitions.

1.1 Agreement. The term “Agreement” shall have the meaning set forth in the preface.

1.2 Board. The “Board” shall mean the Company’s Management Committee.

1.3 Cause. The term “Cause” used in connection with the termination of employment of the Executive
shall have the same meaning ascribed to such term in any employment or severance agreement then in
effect between Executive and the Company or one of its subsidiaries or, if no such agreement
containing a definition of “Cause” is then in effect, shall mean a termination of employment of the
Executive by the Company or any subsidiary thereof due to (i) the commission by the Executive of an
act of fraud or embezzlement, (ii) the indictment or conviction of the Executive for (x) a felony
or (y) a crime involving moral turpitude or a plea by
Executive of guilty or nolo contendere involving such a crime (to the extent it gives rise to
an adverse effect on the business or reputation of the Company or any of its subsidiaries), (iii)
the willful misconduct by the Executive in the performance of Executive’s duties, including any
willful misrepresentation or willful concealment by Executive on any report submitted to the
Company (or any

 

 

of its
securityholders or subsidiaries) which is not of a de minimis nature, (iv)
the violation by Executive of a written Company policy regarding substance abuse, sexual harassment
or discrimination or any other material written policy of the Company regarding employment, (v) the
willful failure of the Executive to render services to the Company or any of its subsidiaries in
accordance with Executive’s employment which failure amounts to a material neglect of the
Executive’s duties to the Company or any of its subsidiaries, (vi) the repeated failure of the
Executive to comply with reasonable directives of the Board of Directors of National Mentor
Holdings, Inc. (“NMH”) or the Chief Executive Officer of NMH consistent with the
Executive’s duties or (vii) the material breach by Executive of any of the provisions of any
agreement between Executive, on the one hand, and the Company or a securityholder or an affiliate
of the Company, on the other hand. Notwithstanding the foregoing, with respect to clauses (iii),
(iv), (v), (vi) and (vii) above, Executive’s termination of employment with the Company or NMH
shall not be deemed to have been terminated for Cause unless and until Executive has been provided
written notice of the Company’s or NMH’s intention to terminate his employment for Cause and the
specific facts relied on; and ten (10) business days from the receipt of such notice to cure any
such conduct or omission giving rise to a termination for Cause; and Executive does not cure any
such conduct or omission within such ten business-day period.

1.4 Closing. The term “Closing” shall have the meaning set forth in Section 2.2.

1.5 Closing Date. The term “Closing Date” shall have the meaning set forth in Section 2.2.

1.6 Company. The term “Company” shall have the meaning set forth in the preface.

1.7 Cost. The term “Cost” shall mean the price per Unit paid by the Executive as proportionately
adjusted for all subsequent distributions of Units and other recapitalizations and less the amount
of any distributions made with respect to the Units pursuant to Section 4.4 of the LLC Agreement
(other than tax distributions pursuant to Section 4.4(j) of the LLC Agreement). For Units that are
granted, the original price per Unit paid is $0.00.

1.8 Disability. The term “Disability” of the Executive shall have the same meaning ascribed to such term in
any employment or severance agreement then in effect between Executive and the
Company or one of its subsidiaries or, if no such agreement containing a definition of
“Disability” is then in effect, shall mean the inability of the Executive to perform the essential
functions of Executive’s job, with or without reasonable accommodation, by reason of a physical or
mental infirmity, for a continuous period of six months. The period of six months shall be deemed
continuous unless Executive returns to work for at least 30 consecutive business days during such
period and performs during such period at the level and competence that existed prior to the
beginning of the six-month period. The date of such Disability shall be on the first day of such
six-month period.

1.9 Employee and Employment. The term “employee” shall mean any employee (as defined in accordance with the regulations
and revenue rulings then applicable under Section 3401(c) of the Internal Revenue Code of 1986, as
amended) of the Company or any of its subsidiaries, and the term “employment” shall include service
as a part- or full-time employee to the Company or any of its subsidiaries.

 

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1.10 Executive. The term “Executive” shall have the meaning set forth in the preface.

1.11 Executive Group. The term “Executive Group” shall have the meaning set forth in Section 4.1(a).

1.12 Fair Market Value. The term “Fair Market Value” used in connection with the value of Units shall mean the
average of the closing prices of the sales of the Company’s Units on all securities exchanges on
which the Units may at the time be listed, or, if there have been no sales on any such exchange on
any day, the average of the highest bid and lowest asked prices on all such exchanges at the end of
such day or, if on any day the Units are not so listed, the average of the representative bid and
asked prices quoted in the NASDAQ System as of 4:00 P.M., New York time, or, if on any day the
Units are not quoted in the NASDAQ System, the average of the highest bid and lowest asked prices
on such day in the domestic over-the-counter market as reported by the National Quotation Bureau
Incorporated or any similar successor organization, in each such case averaged over a period of 21
days consisting of the day as of which the Fair Market Value is being determined and the 20
consecutive business days prior to such day. If at any time the Units are not listed on any
securities exchange or quoted in the NASDAQ System or the over-the-counter market, the Fair Market
Value shall be the fair value of the Units determined in good faith by the Board using its
reasonable business judgment (valuing the Company and its subsidiaries as a going concern;
disregarding any discount for minority interest or marketability of the Units, whether due to
transfer restrictions or the lack of a public market for the Units; taking into account the
Preferred Priority Return (as defined in the LLC Agreement); without taking into account the effect
of any contemporaneous forfeiture or repurchase of Units at less than Fair Market Value under
Section 4) [after consultation with an
independent appraiser, accountant or investment banking firm (the “Valuation
Expert”);]1 provided that [(i) the Board shall only be obligated to consult a
Valuation Expert once annually absent special circumstances (as determined in good faith by the
Board) and (ii)]2 if the Executive disagrees in good faith with the Board’s
determination and such dispute involves an amount in excess of $250,000, the Executive shall notify
the Company in writing of such disagreement within ten (10) business days of receipt of the Board’s
determination of the fair market value of such Units, in which event [a second Valuation Expert //
an independent appraiser, accountant or investment banking firm]3 (the
“Arbiter”) selected by mutual agreement of the Executive and the Board shall make a
determination of the fair market value thereof (valuing the Company and its subsidiaries as set
forth above); [and without taking into account the effect of any contemporaneous forfeiture or
repurchase of Units at less than Fair Market Value under Section 4)]4 solely by (i)
reviewing a single written presentation timely made by each of the Company and the Executive
setting forth their respective resolutions of the dispute and the bases therefor and (ii) accepting
either the Executive’s or the Company’s proposed resolution of the dispute. For the avoidance of
doubt, the determination of Fair Market Value of any Unit shall be based on the amounts
distributable in respect of such Unit under the terms of the LLC Agreement, including any
adjustments necessary to reflect the portion of any tax distributions that were previously made in
respect of such Unit but not charged against other distributions in respect of such Unit.

 

	 	 	 
	1	 	NTD: Include for top-level
executives only.

	 
	2	 	NTD: Include for top-level
executives only.

	 
	3	 	NTD: Include first option for
top-level executives only; include second option for other Executives.

	 
	4	 	NTD: Include for non-top-level
executives only.

 

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Within five (5) business days after the Company’s receipt of Executive’s written notice of
disagreement, the Company shall make available to Executive all data (including reports of
employees and outside advisors) relied upon by the Board in making its determination. The
Executive’s and the Company’s written presentations must be submitted to the Arbiter within 30 days
of the Arbiter’s engagement, written notice of which shall be delivered by the Company to the
Executive. The Arbiter shall notify the Executive and the Company of its decision within 40 days
of its engagement. If the Executive’s proposed resolution is accepted, the Company also shall pay
all of the Executive’s reasonable out-of-pocket fees and expenses (including reasonable fees and
expenses of counsel) incurred in connection with the arbitration. Each of the Company and the
Executive agrees to execute, if requested by the Arbiter, a reasonable engagement letter with the
Arbiter.

1.13 Financing Default. The term “Financing Default” shall mean an event which would constitute (or with notice or
lapse of time or both would constitute) an event of default under any of the following as they may
be amended from time to time: (i) the Credit Agreement, dated as of February 9, 2011, among NMH
Holdings, LLC, NMH as Borrower, the several banks and other financial institutions or entities from
time to time parties thereto and UBS AG, Stamford Branch, as
administrative agent, as amended, and the Indenture, dated as of February 9, 2011, among NMH,
the Guarantors (as defined in the Indenture), and Wells Fargo Bank, National Association, as
trustee, as amended, and the Senior Notes issued by NMH pursuant to the Indenture (collectively,
the “Financing Agreements”), and any extensions, renewals, refinancings or refundings
thereof in whole or in part; (ii) any other agreement under which an amount of indebtedness of the
Company or any of its subsidiaries in excess of $5,000,000 is outstanding as of the time of the
aforementioned event, and any extensions, renewals, refinancings or refundings thereof in whole or
in part; (iii) restrictive financial covenants contained in the LLC Agreement of the Company or
NMH’s organizational documents; (iv) any amendment of, supplement to or other modification of any
of the instruments referred to in clauses (i) through (iii) above; and (v) any of the securities
issued pursuant to or whose terms are governed by the terms of any of the agreements set forth in
clauses (i) through (iv) above, and any extensions, renewals, refinancings or refundings thereof in
whole or in part.

1.14 Good Reason. The term “Good Reason” shall have the same meaning ascribed to such term in any employment
or severance agreement then in effect between Executive and the Company or one of its subsidiaries
or, if no such agreement containing a definition of “Good Reason” is then in effect, shall mean (i)
a change by the Company or NMH in Executive’s duties and responsibilities which is materially
inconsistent with Executive’s position in the Company or in NMH, (ii) a reduction in Executive’s
annual base salary or annual bonus opportunity (excluding any reduction in Executive’s salary or
bonus opportunity that is part of a plan to reduce compensation of comparably situated employees of
the Company generally; provided that such reduction in Executive’s salary or bonus opportunity is
not greater than ten percent (10%) of Executive’s salary or bonus opportunity as in effect

 

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on June
29, 2006), (iii) a material breach by the Company of the employment agreement, if any, between
Executive and the Company or one of its subsidiaries, and (iv) the relocation of the Executive’s
principal place of work from its current location to a location that is beyond a 50-mile radius of
such current location; provided that, notwithstanding anything to the contrary in the foregoing,
Executive shall only have “Good Reason” to terminate employment following the Company’s failure to
remedy the act or omission which is alleged to constitute “Good Reason” within fifteen (15) days
following the Company’s receipt of written notice from Executive specifying such act or omission.

1.15 LLC Agreement. The term “LLC Agreement” means the Fifth Amended and Restated Limited Liability Company
Agreement, dated as of                      ___, 2011, by and among the Company, Vestar and the other Members
of the Company a party thereto, as amended from time to time in accordance with the provisions
thereof.

1.16 Management Investors. The term “Management Investors” shall have the meaning set forth in the preface.

1.17 Permitted Transferee. The term “Permitted Transferee” means any transferee of Units pursuant to clauses (f) or
(g) of the definition of “Exempt Employee Transfer” as defined in the Securityholders Agreement.

1.18 Person. The term “Person” shall mean any individual, corporation, partnership, limited liability
company, trust, joint stock company, business trust, unincorporated association, joint venture,
governmental authority or other entity of any nature whatsoever.

1.19 Public Offering. The term “Public Offering” shall have the meaning set forth in the Securityholders
Agreement.

1.20 Put Percentage. The term “Put Percentage” shall mean the put percentage set forth on Schedule I.

1.21 Puttable Units. The term “Puttable Units” shall mean Class B Units, Class C Units, Class D Units and Vested
Units.

1.22 Retirement. The term “Retirement” shall mean, with respect to the Executive, the Executive’s retirement
as an employee of the Company or any of its subsidiaries on or after reaching age 65 or such
earlier age as may be otherwise determined by the Board after at least three years employment with
the Company or any of its subsidiaries after the Closing Date.

1.23 Sale of the Company. The term “Sale of the Company” shall have the meaning set forth in the Securityholders
Agreement, except that transactions with a Person or Persons that are a wholly owned Subsidiary (as
defined in the Securityholders Agreement) of Vestar and/or Vestar/NMH Investors, LLC or NMH
Investment, LLC shall be excluded.

1.24 Securities Act. The term “Securities Act” shall mean the Securities Act of 1933, as amended, and all rules
and regulations promulgated thereunder, as the same may be amended from time to time.

 

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1.25 Securityholders Agreement. The term “Securityholders Agreement” shall mean the Securityholders Agreement dated as of
June 29, 2006 among Vestar, the Management Investors and the Company, as it may be amended or
supplemented thereafter from time to time.

1.26 Termination Date. The term “Termination Date” means the date upon which Executive’s employment with the
Company and its subsidiaries is terminated.

1.27 Unit Plan. The term “Unit Plan” means the Amended and Restated 2006 Unit Plan of the Company, as it
may be amended or supplemented from time to time.

1.28 Units. The term “Units” shall have the meaning set forth in the LLC Agreement.

1.29 Unvested Units. The term “Unvested Units” shall have the meaning set forth in Section 2.5(b).

1.30 Vestar. The term “Vestar” means Vestar Capital Partners V, L.P., a Cayman Islands exempted limited
partnership.

1.31 Vested Units. The term “Vested Units” shall have the meaning set forth in Section 2.5(b).

2. Grant of Class F Units.

2.1 Grant of Class F Units. Pursuant to the terms and subject to the conditions set forth in this Agreement, the
Company hereby agrees to grant and issue to the Executive, on the Closing Date the number of Class
F Units set forth on Schedule I attached hereto.

2.2 The Closing. The closing (the “Closing”) of the issuance of Class F Units hereunder shall take
place on                      __, 2011 (the “Closing Date”). The Company and the Executive hereby
agree that the Executive shall execute and deliver to the Company a writing satisfactory to the
Company and evidencing the Executive’s acceptance and adoption of all of the terms and provisions
of each of the LLC Agreement and the Securityholders Agreement (to the extent Executive is not
already a party thereto).

2.3 Section 83(b) Election. Within 10 days after the Closing, Executive shall provide the Company with a completed
election under Section 83(b) of the Internal Revenue Code of 1986, as amended, and
the regulations promulgated thereunder in the form of Exhibit A attached hereto. The Company
shall timely file (via certified mail, return receipt requested) such election with the Internal
Revenue Service (“IRS”), and shall provide Executive with proof of such timely filing.

2.4 Closing Conditions. Notwithstanding anything in this Agreement to the contrary, the Company shall be under no
obligation to issue and sell to the Executive any Units unless (i) Executive is an employee of, or
consultant to, the Company or one of its Subsidiaries on the Closing Date; (ii) the representations
of Executive contained in Section 3 hereof are true and correct in all material respects as of the
Closing Date and (iii) Executive is not in breach of any agreement, obligation or covenant herein
required to be performed or observed by Executive on or prior to the Closing Date.

 

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2.5 Vesting of Class F Units.

(a) The Class F Units acquired by the Executive shall be subject to vesting in the manner
specified in Schedule II attached hereto.

(b) All Class F Units which have become vested pursuant to this Agreement are collectively
referred to herein as the “Vested Units.” All Class F Units which have not become vested
pursuant to this Agreement are collectively referred to herein as “Unvested Units.”

(c) If the Executive’s employment with the Company is terminated for any reason or if the
Executive engages in “Competitive Activity” (as defined in Section 6.1 of this Agreement), each
Unvested Unit will automatically be forfeited on the date of such termination or the Activity Date,
as applicable, for no consideration and any of the Executive’s rights or interests therein will
automatically be terminated and of no further force and effect with no further action required on
the part of the Company to effect such forfeiture or termination.

3. Investment Representations and Covenants of the Executive.

3.1 Units Unregistered. The Executive acknowledges and represents that Executive has been advised by the Company
that:

(a) the offer and sale of the Units have not been registered under the Securities Act;

(b) the Units must be held indefinitely and the Executive must continue to bear the
economic risk of the investment in the Units unless the offer and sale of such Units are
subsequently registered under the Securities Act and all applicable state securities laws or
an exemption from such registration is available;

(c) there is no established market for the Units and it is not anticipated that there
will be any public market for the Units in the foreseeable future;

(d) a notation shall be made in the appropriate records of the Company indicating that
the Units are subject to restrictions on transfer and, if the Company should at some time in
the future engage the services of a securities transfer agent, appropriate stop-transfer
instructions will be issued to such transfer agent with respect to the Units.

3.2 Additional Investment Representations. The Executive represents and warrants that:

(a) the Executive’s financial situation is such that Executive can afford to bear the
economic risk of holding the Units for an indefinite period of time, has adequate means for
providing for Executive’s current needs and personal contingencies, and can afford to suffer
a complete loss of Executive’s investment in the Units;

 

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(b) the Executive’s knowledge and experience in financial and business matters are such
that Executive is capable of evaluating the merits and risks of the investment in the Units;

(c) the Executive understands that the Units are a speculative investment which
involves a high degree of risk of loss of Executive’s investment therein, there are
substantial restrictions on the transferability of the Units and, on the Closing Date and
for an indefinite period following the Closing, there will be no public market for the Units
and, accordingly, it may not be possible for the Executive to liquidate Executive’s
investment in case of emergency, if at all;

(d) the terms of this Agreement provide that if the Executive ceases to be an employee
of the Company or its subsidiaries, Unvested Units are subject to forfeiture and the Company
and its affiliates have the right to repurchase Vested Units at a price which may, under
certain circumstances, be less than the Fair Market Value thereof;

(e) the Executive understands and has taken cognizance of all the risk factors related
to the purchase of the Units and, other than as set forth in this Agreement, no
representations or warranties have been made to the Executive or Executive’s representatives
concerning the Units or the Company or their prospects or other matters;

(f) the Executive has been given the opportunity to examine all documents and to ask
questions of, and to receive answers from, the Company and its representatives concerning
the Company and its subsidiaries, the Securityholders Agreement, the Company’s
organizational documents and the terms and conditions of the purchase of the Units and to
obtain any additional information which the Executive deems necessary; and

(g) all information which the Executive has provided to the Company and the Company’s
representatives concerning the Executive and Executive’s financial position is complete and
correct as of the date of this Agreement.

4. Certain Sales and Forfeitures Upon Termination of Employment.

4.1 Put Option.

(a) [If the Executive’s employment with the Company and its subsidiaries terminates due to the
Disability, death or Retirement of the Executive prior to the earlier of (i) a Public Offering or
(ii) a Sale of the Company, the Executive and the Executive’s Permitted Transferees (hereinafter
sometimes collectively referred to as the “Executive Group”) shall have the right, subject
to the provisions of Section 5 hereof, for 45 days following the date that is six (6) months after
the date of such termination of employment of the Executive, to sell to the Company, and the
Company shall be required to purchase (subject to the provisions of Section 5 hereof), on one
occasion from each member of the Executive Group, a number of Vested Units equal to the product of
(x) the Put Percentage and (y) the number of Vested Units then held by the Executive Group, at a
price per Unit equal to the applicable purchase price determined pursuant to Section 4.1(c). In
order to exercise its rights with respect to the Vested Units pursuant to this Section 4.1(a), the
Executive Group shall also be required to simultaneously sell to the Company, and the Company shall
be required to purchase (subject to the provisions of Section 5 hereof), on such occasion from each
member of the Executive Group, a number of Units of each of the other classes of Puttable Units
held by the Executive Group equal to the product of (x) the Put Percentage and (y) the number of
Units of such class of Puttable Units held by the Executive Group, at a price per Unit equal to the
applicable purchase price determined pursuant to Section 4.1(c).

 

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(b) If the Executive Group desires to exercise its option to require the Company to repurchase
Units pursuant to Section 4.1(a), the members of the Executive Group shall send one written notice
to the Company setting forth such members’ intention to collectively sell the Put Percentage of
each class of Puttable Units held by the Executive Group pursuant to Section 4.1(a), which notice
shall include the signature of each member of the Executive Group. Subject to the provisions of
Section 5.1, the closing of the purchase shall take place at the principal office of the Company on
a date specified by the Company no later than the 60th day after the giving of such notice.

(c) In the event of a purchase by the Company pursuant to Section 4.1(a), the purchase price
of any Units subject to purchase under Section 4.1(a) shall be Fair Market Value (measured as of
the put notice date); provided that in any case the Board shall have the right, in its sole
discretion, to increase any of the foregoing purchase prices. For the avoidance of doubt, no
Unvested Units will be subject to purchase under Section 4.1(a) as they will have been forfeited
pursuant to Section 2.5(c).

(d) Any put or right to require the Company to repurchase Puttable Units that the Executive
Group may have in accordance with the terms of the agreements (including, without limitation, any
Management Unit Subscription Agreements) pursuant
to which such other Units were purchased from or granted by the Company are hereby terminated
and of no further force and effect.]5

(e) [Any put or right to require the Company to repurchase Puttable Units that the Executive
and the Executive’s Permitted Transferees (hereinafter sometimes collectively referred to as the
“Executive Group”) may have in accordance with the terms of the agreements (including,
without limitation, any Management Unit Subscription Agreements) pursuant to which such other Units
were purchased from or granted by the Company are hereby terminated and of no further force and
effect.]6

 

	 	 	 
	5	 	NTD: Include for top-level
executives only.

	 
	6	 	NTD: Include for non-top-level
executives.

 

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4.2 Call Options.

(a) If the Executive’s employment with the Company and its subsidiaries terminates for any of
the reasons set forth in clauses (i), (ii) or (iii) below prior to a Sale of the Company, [if the
number of Puttable Units sold to the Company pursuant to the Executive Group’s exercise of the put
option pursuant to Section 4.1 is less than the number of Puttable Units held by the Executive
Group]7 or if the Executive engages in “Competitive Activity” (as defined in Section 6.1
of this Agreement), the Company shall have the right and option to purchase for a period of eight
months following the Termination Date8, and each member of the Executive Group shall be
required to sell to the Company, any or all of such Puttable Units then held by such member of the
Executive Group (it being understood that if Puttable Units of any class subject to repurchase
hereunder may be repurchased at different prices, the Company may elect to repurchase only the
portion of the Puttable Units of such class subject to repurchase hereunder at the lower price), at
a price per unit equal to the applicable purchase price determined pursuant to Section 4.2(c):

(i) if the Executive’s employment with the Company and its subsidiaries is terminated
due to the Disability, death or Retirement of the Executive;

(ii) if the Executive’s employment with the Company and its subsidiaries is terminated
by the Company and its subsidiaries without Cause or by the Executive for Good Reason;

(iii) if the Executive’s employment with the Company and its subsidiaries is terminated
(A) by the Company or any of its subsidiaries for Cause or (B) by the Executive for any
other reason not set forth in Section 4.2(a)(i) or Section 4.2(a)(ii).

(b) If the Company desires to exercise one of its options to purchase Puttable Units pursuant
to this Section 4.2, the Company shall, not later than eight months after the Termination Date,
send written notice to each member of the Executive Group of its intention to purchase Puttable
Units, specifying the number of Puttable Units to be purchased (the “Call Notice” and the
date that such Call Notice is given, the “Call Notice Date”). Subject to the provisions of
Section 5, the closing of the purchase shall take place at the principal office of the Company on a
date specified by the Company no later than the 30th day after the Call Notice Date.

(c) In the event of a purchase by the Company pursuant to Section 4.2(a), the purchase price
shall be:

(i) with respect to a purchase of Puttable Units, in the case of a termination of
employment described in Section 4.2(a)(iii)(A) or if Executive engages in a “Competitive
Activity” (as defined in Section 6.1 of this Agreement), a price per Unit equal to the
lesser of (A) Fair Market Value (measured as of the Call Notice Date) and (B) Cost; and

(ii) with respect to a purchase of Puttable Units, in the case of a termination of
employment described in Section 4.2(a)(i), 4.2(a)(ii) or 4.2(a)(iii)(B), a price per Unit
equal to Fair Market Value (measured as of the Call Notice Date);

 

	 	 	 
	7	 	NTD: Include for top-level executives only.

	 
	8	 	NTD: Note that time period for exercising call right is tied to the Termination Date and not the Activity Date.

 

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provided that in any case the Board shall have the right, in its sole discretion, to
increase any purchase price set forth above.

(d) The Company’s right to purchase Units (other than Vested Units) set forth in this
Agreement are in addition to, and not in lieu of, any call rights or other rights to repurchase
Units set forth in any other prior Management Unit Subscription Agreement to which the Executive
and the Company are a party.

4.3 Obligation to Sell Several. If there is more than one member of the Executive Group, the failure of any one member
thereof to perform its obligations hereunder shall not excuse or affect the obligations of any
other member thereof, and the closing of the purchases from such other members by the Company shall
not excuse, or constitute a waiver of its rights against, the defaulting member.

5. Certain Limitations on the Company’s Obligations to Purchase Units.

5.1 Deferral of Purchases. (a) Notwithstanding anything to the contrary contained herein, the Company shall not be
obligated to purchase any Units at any time pursuant to Section 4, regardless of whether it has
delivered a notice of its election to purchase any such Units, (i) to the extent that the purchase
of such Units or the payment to the Company or one of its subsidiaries of a cash dividend or
distribution by a subsidiary of the Company to fund such purchase (together with any other
purchases of Units pursuant to Section 4 or pursuant to similar provisions in agreements with
other employees of the Company and its subsidiaries of which the Company has at such time been
given or has given notice and together with cash dividends and distributions to fund such other
purchases) would result (A) in a violation of any law, statute, rule, regulation, policy, order,
writ, injunction, decree or judgment promulgated or entered by any federal, state, local or foreign
court or governmental authority applicable to the Company or any of its subsidiaries or any of its
or their property, (B) after giving effect thereto, in a Financing Default or (C) adverse
accounting treatment for the Company, or (ii) if immediately prior to such purchase there exists a
Financing Default which prohibits such purchase, dividend or distribution. The Company shall
within fifteen days of learning of any such fact so notify the members of the Executive Group that
it is not obligated to purchase units hereunder.

(b) Notwithstanding anything to the contrary contained in Section 4, any Units which a member
of the Executive Group has elected to sell to the Company or which the Company has elected to
purchase from members of the Executive Group, but which in accordance with Section 5.1(a) are not
purchased at the applicable time provided in Section 4, shall be purchased by the Company for the
applicable purchase price, together with interest thereon at the Applicable Federal Rate as in
effect on the date such purchase is so deferred on or prior to the fifteenth day after such date or
dates that (after taking into account any purchases (and related dividends and distributions) to be
made at such time pursuant to agreements with other employees of the Company and its subsidiaries)
the purchase of such Units (and related dividends and distributions) are no longer prohibited under
Section 5.1(a), and the Company shall give the members of the Executive Group five days prior
notice of any such purchase.

 

11

 

5.2 Payment for Units. If at any time the Company elects or is required to purchase any Units pursuant to Section
4, the Company shall pay the purchase price for the Units it purchases (i) first, by the
cancellation of any indebtedness, if any, owing from the Executive to the Company or any of its
subsidiaries (which indebtedness shall be applied pro rata against the proceeds receivable by each
member of the Executive Group receiving consideration in such repurchase) and (ii) then, by the
Company’s delivery of a check or wire transfer of immediately available funds for the remainder of
the purchase price, if any, against delivery of the certificates or other instruments representing
the Units so purchased, duly endorsed; provided that if any of the conditions set forth in Section
5.1(a) exists which prohibits such cash payment (either directly or indirectly as a result of the
prohibition of a related cash dividend or distribution), the portion of the cash payment so
prohibited may be made, to the extent such payment is not prohibited, by the Company’s delivery of
a junior subordinated promissory note (which shall be subordinated and subject in right of payment
to the prior payment of any debt outstanding under the Financing Agreements and any modifications,
renewals, extensions, replacements and refunding of all such indebtedness) of the Company (a
“Junior Subordinated Note”) in a principal amount equal to the balance of the purchase
price, payable (x) in the event of a termination of employment referenced in Section 4.2(a)(i) and
(ii), as soon as the conditions set forth in Section 5.1(a) no longer exist or (x) in the event of
a termination of employment referenced in Section 4.2(a)(iii), on the fifth anniversary of the
issuance thereof, and bearing interest payable annually at the Applicable Federal Rate on the date
of issuance; provided further that if any of the conditions set forth in Section 5.1(a) exists
which prohibits such payment (or the payment described in the next
proviso) by delivery of a Junior Subordinated Note, the portion of the payment so prohibited
may be made, to the extent such payment is not prohibited, by the Company’s delivery of preferred
units of the Company having an aggregate liquidation preference equal to the balance of the
purchase price; provided further that in the case of a purchase pursuant to Section 4.2(a)(iii) the
Company may elect at any time to deliver a Junior Subordinated Note in a principal amount equal to
all or a portion of the cash purchase price (in lieu of paying such portion of the purchase price
in cash), which Junior Subordinated Note shall mature on the fifth anniversary of its issuance and
accrue interest annually at the Applicable Federal Rate on the date of issuance, which interest
shall be payable at maturity. The Company shall use its reasonable efforts to repurchase Units
pursuant to Section 4.1(a) or Section 4.2(a)(i) or Section 4.2(a)(ii) with cash and/or to prepay
any Junior Subordinated Notes or redeem any preferred units issued in connection with a repurchase
of Units pursuant to Section 4.1(a) or Section 4.2(a)(i) or Section 4.2(a)(ii). The Company shall
have the right set forth in clause (i) of the first sentence of this Section 5.2 whether or not the
member of the Executive Group selling such units is an obligor of the Company. Any Junior
Subordinated Note (or preferred units issued in lieu thereof) shall become prepayable (or
redeemable) upon a Sale of the Company from net cash proceeds, if any, payable to the Company or
its unitholders; to the extent that sufficient net cash proceeds are not so payable, the Junior
Subordinated Note (or preferred units issued in lieu thereof) shall be cancelled in exchange for
such other non-cash consideration received by unitholders in the Sale of the Company having a fair
market value equal to the principal of and accrued interest on the note. Any Junior Subordinated
Note (or preferred units issued in lieu thereof) also shall become prepayable upon the consummation
of an initial Public Offering. The principal of and accrued interest on any such note may be
prepaid (and preferred units issued in lieu thereof may be redeemed) in whole or in part at any
time at the option of the Company. If interest (or cash dividends) is required to be paid on any
Junior Subordinated Note (or preferred units issued in lieu thereof) prior to maturity and any of
the conditions set forth in Section 5.1(a) exists or if any such cash payment would result in
adverse accounting treatment for the Company which prohibits the payment of such interest (or
dividends) in cash, such interest may be cumulated and accrued until and to the extent that such
prohibition no longer exists.

 

12

 

6. Noncompetition.

6.1 Competitive Activity. Executive shall be deemed to have engaged in “Competitive Activity” if, during the period
commencing on the date hereof and ending on the later of (x) the first anniversary of the date
Executive’s employment with the Company and its subsidiaries is terminated or (y) the maximum
number of years of base salary Executive is entitled to receive as severance in a termination by
the Company without Cause, Executive, whether on Executive’s own behalf or on behalf of or in
conjunction with any other person or entity, directly or indirectly (A) solicits, or assists in
soliciting, the business of any client of the Company or any of its subsidiaries (collectively, the
“Entities”), or hires any employee of any of the Entities, or interferes with, or attempts
to interfere with, the relationships between any of the Entities, on the one hand, and any of its
customers, clients, suppliers, partners, members, employees or investors, on the other hand; or (B)
becomes an employee, agent, representative, consultant, partner, shareholder or holder of
any other financial interest with respect to any business, individual, partnership, joint
venture, association, firm, corporation or other entity engaged, wholly or in part, in the
provision or sale of acquired brain injury services, therapeutic foster care, other foster care or
other home or community-based healthcare, therapy, counseling or other educational or human
services to people with special needs, or any other business that the Company is actively
conducting or is actively considering conducting at the time of Executive’s termination of
employment (so long as Executive knows or reasonably should have known about such plan(s)), in each
case in any geographical area within 100 mile radius of the Executive’s principal place of work as
of the Termination Date with the Company or its affiliates, as applicable(the “Competitive
Business”). Notwithstanding the foregoing, if Executive is subject to a more restrictive
noncompetition covenant in any agreement with the Company or any of its affiliates, the most
restrictive of such noncompetition covenants shall apply.

6.2 Activity Date. If Executive engages in Competitive Activity, the “Activity Date” shall be the
first date on which Executive engages in such Competitive Activity.

6.3 Repayment of Proceeds. If Executive engages in Competitive Activity, then Executive shall be required to pay to
the Company, within ten business days following the Activity Date, an amount equal to the excess,
if any, of (A) the aggregate proceeds Executive received upon the sale or other disposition of
Executive’s Units, over (B) the aggregate Cost of such Units.

7. Miscellaneous.

7.1 Transfers to Permitted Transferees. Prior to the transfer of Units to a Permitted Transferee (other than a transfer subsequent
to a Sale of the Company), the Executive shall deliver to the Company a written agreement of the
proposed transferee (a) evidencing such Person’s undertaking to be bound by the terms of this
Agreement and (b) acknowledging that the Units transferred to such Person will continue to be Units
for purposes of this Agreement in the hands of such Person. Any transfer or attempted transfer of
Units in violation of any provision of this Agreement or the Securityholders Agreement shall be
void, and the Company shall not record such transfer on its books or treat any purported transferee
of such Units as the owner of such Units for any purpose.

 

13

 

7.2 Recapitalizations, Exchanges, Etc., Affecting Units. The provisions of this Agreement shall apply, to the full extent set forth herein with
respect to Units, to any and all securities of the Company or any successor or assign of the
Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in
respect of, in exchange for, or in substitution of the Units, by reason of any dividend payable in
units, issuance of units, combination, recapitalization, reclassification, merger,
consolidation or otherwise.

7.3 Executive’s Employment by the Company. Nothing contained in this Agreement, in any documents delivered to Executive or any of the
other Management Investors in connection with Executive’s investment in the Company pursuant to
this Agreement, or in any other documents delivered to Executive or any of the other Management
Investors in connection with any previous investment in the Company by any such Management Investor
shall be deemed to obligate the Company or any subsidiary of the Company to (i) employ the
Executive in any capacity whatsoever or to prohibit or restrict the Company (or any such
subsidiary) from terminating the employment of the Executive at any time or for any reason
whatsoever, with or without Cause, or (ii) provide any severance payments, benefits or any other
monetary compensation or employee benefit to Executive in connection with a termination of
Executive’s employment other than as required by applicable law.

7.4 Unit Plan. Executive acknowledges that the Class F Units are being issued pursuant to the Unit Plan
and agrees to be bound by the terms of the Unit Plan with respect to Executive’s Units.

7.5 Cooperation. Executive agrees to cooperate with the Company in taking action reasonably necessary to
consummate the transactions contemplated by this Agreement.

7.6 Binding Effect. The provisions of this Agreement shall be binding upon and accrue to the benefit of the
parties hereto and their respective heirs, legal representatives, successors and assigns; provided,
however, that no Transferee shall derive any rights under this Agreement unless and until such
Transferee has executed and delivered to the Company a valid undertaking and becomes bound by the
terms of this Agreement; and provided further that Vestar is a third party beneficiary of this
Agreement and shall have the right to enforce the provisions hereof.

7.7 Amendment; Waiver. This Agreement may be amended only by a written instrument signed by the parties hereto.
No waiver by any party hereto of any of the provisions hereof shall be effective unless set forth
in a writing executed by the party so waiving.

7.8 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws
of the State of Delaware applicable to contracts made and to be performed therein.

 

14

 

7.9 Jurisdiction. Any suit, action or proceeding with respect to this Agreement, or any judgment entered by
any court in respect of any thereof, shall be brought in any court of competent jurisdiction in the
State of Delaware, and each of the Company and the members of the Executive Group hereby submits to
the exclusive jurisdiction of such courts for the purpose of any such suit, action, proceeding or
judgment. Each of the members of the Executive Group and the Company hereby irrevocably waives (i)
any objections which it may now or hereafter have to the laying of the venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any court of competent
jurisdiction in the State of Delaware, (ii) any claim that any such suit, action or proceeding
brought in any such court has been brought in any inconvenient forum and (iii) any right to a jury
trial.

7.10 Notices. All notices and other communications hereunder shall be in writing and shall be deemed to
have been duly given when personally delivered, telecopied (with confirmation of receipt), one day
after deposit with a reputable overnight delivery service (charges prepaid) and three days after
deposit in the U.S. Mail (postage prepaid and return receipt requested) to the address set forth
below or such other address as the recipient party has previously delivered notice to the sending
party.

(a) If to the Company:

NMH Investment, LLC

c/o Vestar Capital Partners

245 Park Avenue, 41st Floor

New York, NY 10167

Attn: General Counsel

Telecopy: (212) 808-4922

with copies to:

National Mentor Holdings, Inc.

313 Congress Street

6th Floor

Boston, Massachusetts 02210

Attn: Linda DeRenzo

Telecopy: (617) 790-4271

and

Kirkland & Ellis LLP

300 North LaSalle Street

Chicago, IL 60654

Attn: Sanford E. Perl, P.C.

        Mark A. Fennell, P.C.

Telecopy: (312) 862-2200

(b) If to the Executive, to the address as shown on the unit register of the Company.

 

15

 

7.11 Integration. This Agreement and the documents referred to herein or delivered pursuant hereto which form
a part hereof contain the entire understanding of the parties with respect to the subject matter
hereof and thereof. There are no restrictions, agreements, promises, representations, warranties,
covenants or undertakings with respect to the subject matter hereof other than those expressly set
forth herein and therein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter. For the avoidance of doubt, this
Agreement shall not supersede or amend any written Management Unit Subscription Agreement
previously executed by the parties hereto that evidences a previous purchase of Units made by the
Executive from the Company.

7.12 Counterparts. This Agreement may be executed in separate counterparts, and by different parties on
separate counterparts each of which shall be deemed an original, but all of which shall constitute
one and the same instrument.

7.13 Injunctive Relief. The Executive and Executive’s Permitted Transferees each acknowledges and agrees that a
violation of any of the terms of this Agreement will cause the Company irreparable injury for which
adequate remedy at law is not available. Accordingly, it is agreed that the Company shall be
entitled to an injunction, restraining order or other equitable relief to prevent breaches of the
provisions of this Agreement and to enforce specifically the terms and provisions hereof in any
court of competent jurisdiction in the United States or any state thereof, in addition to any other
remedy to which it may be entitled at law or equity.

7.14 Rights Cumulative; Waiver. The rights and remedies of the Executive and the Company under this Agreement shall be
cumulative and not exclusive of any rights or remedies which either would otherwise have hereunder
or at law or in equity or by statute, and no failure or delay by either party in exercising any
right or remedy shall impair any such right or remedy or operate as a waiver of such right or
remedy, nor shall any single or partial exercise of any power or right preclude such party’s other
or further exercise or the exercise of any other power or right. The waiver by any party
hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver
of any preceding or succeeding breach and no failure by either party to exercise any right or
privilege hereunder shall be deemed a waiver of such party’s rights or privileges hereunder or
shall be deemed a waiver of such party’s rights to exercise the same at any subsequent time or
times hereunder.

*     *     *     *     *

 

16

 

IN WITNESS WHEREOF, the parties have executed this Management Unit Subscription Agreement as
of the date first above written.

	 	 	 	 	 
	 	NMH INVESTMENT, LLC,
a Delaware limited liability company

 	 
	 	By:  	 	 
	 	 	Name:  	Edward M. Murphy 	 
	 	 	Title:  	CEO 	 
	 
	 	 	[Executive Name]
 	 
	 

 

17

 

CONSENT OF SPOUSE

I,
                                        
, the undersigned spouse of Executive, hereby acknowledge that I have
read the foregoing Management Unit Subscription Agreement (the “Agreement”) and that I
understand its contents. I am aware that the Agreement provides for the forfeiture and/or
repurchase of my spouse’s Units (as defined in the Agreement) under certain circumstances and
imposes other restrictions on the transfer of such Units. I agree that my spouse’s interest in the
Units is subject to the Agreement and any interest I may have in such Units shall also be
irrevocably bound by the Agreement and, further, that my community property interest in such Units,
if any, shall be similarly bound by the Agreement.

I am aware that the legal, financial and other matters contained in the Agreement are complex
and I am encouraged to seek advice with respect thereto from independent legal and/or financial
counsel. I have either sought such advice or determined after carefully reviewing the Agreement
that I hereby waive such right.

	 	 	 	 	 	 	 

	 	 	Acknowledged and agreed this ___ day of                     ,
2011	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Witness
	 	 

 

 

 

SCHEDULE I

[Executive Name]

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Participation Threshold	 
	Granted Units	 	Number	 	 	per Class F Unit	 
	Series 1 Class F Units:
	 	 	 	 	 	$	0.00	 

	 	 	 

	[Put Percentage

	 	[_____]%]9

 

	 	 	 
	9	 	NTD: Only for top-level executives.

 

 

 

SCHEDULE II

[Executive Name]

[The Executive’s Class F Units shall become vested as follows: (i) 75% of the Class F Units shall
become vested on the Closing Date and (ii) the remaining 25% of the Class F Units shall become
vested upon the date that is eighteen months after the Closing Date if as of such date Executive
is, and since the Closing Date continuously has been, employed by the Company or any of its
subsidiaries.]10

[The Executive’s Class F Units shall become vested as follows: (i) 50% of the Class F Units shall
become vested on the Closing Date, (ii) 25% of the Class F Units shall become vested on the date
that is eighteen months after the Closing Date and (iii) 25% of the Class F Units shall become
vested on the three-year anniversary of the Closing Date (such that the Class F Units shall become
100% vested on the three-year anniversary of the Closing Date) if as of each such date Executive
is, and since the Closing Date continuously has been, employed by the Company or any of its
subsidiaries.]11

[The Executive’s Class F Units shall become vested as follows: one-third of the Class F Units shall
become vested on each of the first three anniversaries of the Closing Date (such that the Class F
Units shall become 100% vested on the three-year anniversary of the Closing Date) if as of each
such date Executive is, and since the Closing Date continuously has been, employed by the Company
or any of its subsidiaries.]12

Upon the occurrence of a Sale of the Company, all Class F Units which have not yet become vested
shall become vested as of the date of consummation of such Sale of the Company if, as of such date,
Executive has been continuously employed by the Company or any of its subsidiaries from the Closing
Date through and including such date; provided, that for purposes of this paragraph, a
Public Offering shall not constitute a Sale of the Company.

 

	 	 	 
	10	 	Note to Draft: Include for grants
made at the closing of the new plan to Executives who have been continuously
employed by the Company or any of its subsidiaries from December 31, 2008
through the Closing Date.

	 
	11	 	Note to Draft: Include for grants
made at the closing of the new plan to Executives who have not been
continuously employed by the Company or any of its subsidiaries from
December 31, 2008 through the Closing Date.

	 
	12	 	Note to Draft: Include for grants
made after the closing of the new plan.

 

 

 

ELECTION TO INCLUDE UNITS IN GROSS

INCOME PURSUANT TO SECTION 83(b) OF THE

INTERNAL REVENUE CODE

The undersigned purchased units (the “Units”) of NMH Investment, LLC (the “Company”)
on                      ___, 2011. The undersigned desires to make an election to have the Units taxed under
the provision of Section 83(b) of the Internal Revenue Code of 1986, as amended (“Code
§83(b)”), at the time the undersigned purchased the Units.

Therefore, pursuant to Code §83(b) and Treasury Regulation §1.83-2 promulgated thereunder, the
undersigned hereby makes an election, with respect to the Units (described below), to report as
taxable income for calendar year 2011 the excess, if any, of the Units’ fair market value on
                     ___, 2011 over the purchase price thereof.

The following information is supplied in accordance with Treasury Regulation §1.83-2(e):

The name, address and social security number of the undersigned:

[Executive’s Name]

[Address]

[Social Security Number]

1. A description of the property with respect to which the election is being made: _____
Class F Common Units.

2. The date on which the property was transferred:
                     ___, 2011. The taxable year for
which such election is made: calendar year 2011.

3. The restrictions to which the property is subject: The Class F Common Units are subject to
a time-based vesting schedule. If the undersigned ceases to be employed by the Company or any of
its subsidiaries under certain circumstances, all or a portion of the Units may be subject to
forfeiture and/or repurchase by the Company at the original purchase price paid for the Units,
regardless of the fair market value of the Units on the date of such repurchase. The Units are
also subject to transfer restrictions.

4. The aggregate fair market value on                     
___, 2011 of the property with respect to which
the election is being made, determined without regard to any lapse restrictions: $0.00.

5. The aggregate amount paid for such property: $0.00.

 

 

 

A copy of this election has been furnished to the Secretary of the Company pursuant to
Treasury Regulations §1.83-2(e)(7).

	 	 	 

	Dated:                      ___, 2011
	 	 
	 

	 	 
	 

	 	[Executive Name]Exhibit 10.2

Exhibit 10.2

2011 Omnibus Incentive Plan of Walter

Investment Management Corp.

Nonqualified Option Award Agreement

 

 

 

2011 Omnibus Incentive Plan of

Walter Investment Management Corp.

Nonqualified Option Award Agreement

You have been selected to receive a grant of nonqualified Options pursuant to the 2011
Omnibus Incentive Plan of Walter Investment Management Corp. (the “Plan”), as specified below:

Participant:

Date of Grant: May 10, 2011

Number of Shares Covered by This Option:

Option Price: $17.61

Date of Expiration: May 10, 2021

Vesting of Options: In Accordance With the Following Schedule:

	 	 	 
	 	 	Portion of
	Vesting Date	 	Options Vesting
	First anniversary of Date of Grant

	 	One-Third
	Second anniversary of Date of Grant

	 	One-Third
	Third anniversary of Date of Grant

	 	One-Third

THIS AGREEMENT, effective as of the Date of Grant set forth above, represents the grant of a
nonqualified Option by Walter Investment Management Corp., a Maryland corporation (the “Company”),
to the Participant named above, pursuant to the provisions of the Plan.

The Plan provides a complete description of the terms and conditions governing this Grant of
Options. If there is any inconsistency between the terms of this Agreement and the terms of the
Plan, the Plan’s terms shall completely supersede and replace the conflicting terms of this
Agreement. All capitalized terms shall have the meanings ascribed to them in the Plan, unless
specifically set forth otherwise herein. The parties hereto agree as follows:

	1.	 	Grant of Options. The Company hereby grants to the Participant an Option to purchase the
number of Shares set forth above, at the stated Option Price, which is 100% of the Fair Market
Value (“FMV”) of a Share on the Date of Grant. The FMV is equal to the average of the high and
the low selling price of Company shares on the NYSE Amex on the Date of Grant.
	 
	2.	 	Exercise of Option. Except as hereinafter provided, the Participant may exercise this Option
at any time after the Option vests (according to the vesting schedule set forth above),
provided that no exercise may occur subsequent to the close of business on the Date of
Expiration (as defined
above). This Option may be exercised in whole or in part, but not for less than 100 Shares at
any one time, unless fewer than 100 Shares then remain subject to the Option, and the Option is
then being exercised as to all such remaining Shares.

 

 

 

	3.	 	Termination of Service.

	 	(a)	 	By Death. In the event the employment of the Participant with the Company is terminated
by reason of death, the portion of the Option not yet vested as of the date of death shall
become immediately vested and exercisable. The entire Option shall remain exercisable at
any time prior to its expiration date, or for 12 months after the date of death, whichever
period is shorter, by such person or persons as shall have been named as the Participant’s
beneficiary, or by such persons that have acquired the Participant’s rights under the
Options by will or by the laws of descent and distribution.
	 
	 	(b)	 	By Disability. In the event the employment of the Participant with the Company is
terminated by reason of Disability, the portion of the Option not yet vested as of the date
of termination shall become immediately vested and exercisable. The entire Option shall
remain exercisable at any time prior to its expiration date, or for 12 months after the
date of termination, whichever period is shorter.
	 
	 	 	 	For purposes of this Agreement, disability shall be defined as a “permanent and total
disability” within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended and such other disabilities, infirmities, afflictions or conditions as the Committee
by rule may include.
	 
	 	(c)	 	By Retirement. In the event the service of the Participant is terminated by reason of
Retirement, the portion of the Option not yet vested as of the effective date of such
Retirement shall become immediately vested and exercisable. The entire Option shall remain
exercisable at any time prior to its expiration date, or for 5 years after the effective
date of such retirement, whichever period is shorter.
	 
	 	 	 	For purposes of this Agreement, “Retirement” shall mean, the Participant’s voluntary
termination of employment after such time as either, the Participant has reached the age of
60, or the sum of the Participant’s age and years of service with the Company exceeds 70;
provided that, in either case, the Participant provides the Company with at least 6 months
written notice of the Participant’s intention to retire, or such lesser time as the Company
may agree. For purposes of this definition, the Participant’s years of service shall include
years served with any predecessor or successor companies to the Company.
	 
	 	(d)	 	By the Participant as a Result of Constructive Termination. In the event that the
Participant terminates Participant’s employment as a result of Constructive Termination,
the portion of the Option not yet vested as of the effective date of such termination shall
become immediately vested and exercisable. The entire Option shall remain exercisable at
any time prior to its expiration date, or for 12 months after the effective date of such
termination, whichever period is shorter.

 

 

 

	 	 	 	For purposes of this Agreement, “Constructive Termination” shall mean, without the
Participant’s written consent: (i) a material failure of the Company to comply with the
provisions of this Agreement, (ii) a material diminution of the Participant’s position
(including status, offices, title and reporting relationships), duties or responsibilities
or pay, (iii) any purported termination of the Participant’s employment other than for Cause
(as defined below), or (iv) the forced relocation of the Participant’s primary job location
more than 50 miles from the location to which the Participant reports as of the effective
date of this agreement; provided however, that any isolated, insubstantial or inadvertent
change, condition, failure or breach described under subsections (i) — (iv) above which is
not taken in bad faith and is remedied by the Company promptly after the Company’s actual
receipt of written notice from the Participant shall not constitute Constructive
Termination.
	 
	 	 	 	For purposes of this Agreement, a material diminution in pay or responsibility shall
not be deemed to have occurred if: (i) the amount of the Participant’s bonus (if
any) fluctuates due to performance considerations under the Company’s incentive plan or
other Company incentive plan applicable to the Participant and in effect from time to time,
(ii) the Participant is transferred to a position of comparable responsibility, status,
title, office and compensation within the Company, or (iii) the Participant experiences a
reduction in salary that is relatively comparable to reductions imposed upon other employees
of comparable position to the Participant.
	 
	 	 	 	To be entitled to the foregoing the Participant must provide written notice, including
details describing the basis of the Participant’s claim, to the Company within 60 days of
the occurrence of the event(s) giving rise to a claim of Constructive Termination and the
Company will have 30 days to remedy any non-compliance. Should the Participant fail to
provide the foregoing notice or should the Company remedy the non-compliance, the unvested
Options will not vest until such time as they are scheduled to vest pursuant to this
Agreement.
	 
	 	(e)	 	For Cause. In the event the employment of the Participant with the Company is
involuntarily terminated for Cause, all vested and unvested options shall be forfeited.
	 
	 	 	 	For purposes of this Agreement, “Cause” shall mean (A) conviction of, or plea of guilty or
nolo contendere to, a felony arising from any act of fraud, embezzlement or willful
dishonesty in relation to the business or affairs of the Company, or (B) conviction of, or
plea of guilty or nolo contendere to, any other felony which is materially injurious to the
Company or its reputation or which compromises the Participant’s ability to perform the
Participant’s job function, and/or act as a representative of the Company, or (C) a willful
failure to attempt to substantially perform the Participant’s duties (other than any such
failure resulting from the Participant’s Disability), after a written demand for substantial
performance is delivered to the Participant that specifically identifies the manner in which
the Company believes that the Participant has not attempted to substantially perform such
duties, and has failed to remedy the situation, to the extent possible, within fifteen (15)
business days of such written notice from the Company or such longer time as may be
reasonably required
to remedy the situation, but no longer than forty-five (45) calendar days. For purposes of
this definition, no act or failure to act on the Participant’s part shall be considered to
be Cause if done, or omitted to be done, in good faith and with the reasonable belief that
the action or omission was in the best interests of, or were not, in fact, materially
detrimental to, the Company or a Company subsidiary.

 

 

 

	 	(f)	 	For Other Reasons. Subject to the Compensation and Human Resource Committee’s (the
“Committee”) discretion, if the employment of the Participant shall terminate for any
reason other than the reasons set forth in this Section 3(a) through 3(e), the portion of
the Option not yet vested as of the date of termination shall be forfeited. The portion of
the Option vested as of the effective date of termination shall remain exercisable at any
time prior to its expiration date, or for twelve (12) months after the effective date of
termination, whichever period is shorter.

	4.	 	Change in Control. Notwithstanding anything to the contrary in this Agreement, in the event
of a Change in Control of the Company and prior to the Participant’s termination of
employment, the Participant shall become immediately fully vested without restriction in all
Options granted pursuant to this Agreement.
	 
	 	 	For purposes of this Agreement, a “Change of Control” shall mean a change of ownership of
the Company, a change in the effective control of the Company, or a change in the ownership of a
substantial portion of the assets of the Company within the meaning of Treas. Reg.
1.409A-3(i)(5).
	 
	5.	 	Restrictions on Transfer. Unless otherwise determined by the Committee in accordance with
the Plan, this Option may not be sold, transferred, pledged, assigned, or otherwise alienated
or hypothecated, other than by will or by the laws of descent and distribution. Further, this
Option shall be exercisable during the Participant’s lifetime only by the Participant or the
Participant’s legal representative.
	 
	6.	 	Recapitalization. In the event of any change in the capitalization of the Company such as a
stock split or a corporate transaction such as any merger, consolidation, separation, or
otherwise, the number and class of Shares subject to this Option, as well as the Option Price,
shall be equitably adjusted by the Committee to prevent dilution or enlargement of rights.
	 
	7.	 	Procedure for Exercise of Option. This Option may be exercised by delivery of written notice
to the Company at its executive offices, addressed to the attention of its Secretary. Such
notice: (a) shall be signed by the Participant or his or her legal representative; (b) shall
specify the number of full Shares then elected to be purchased with respect to the Option; (c)
unless a Registration Statement under the Securities Act of 1933 is in effect with respect to
the Shares to be purchased, shall contain a representation of the Participant that the Shares
are being acquired by him or her for investment and with no present intention of selling or
transferring them, and that he or she will not sell or otherwise transfer the Shares except in
compliance with all applicable securities laws and requirements of any stock exchange upon
which the Shares may then be listed; and (d) shall be accompanied by payment in full of the
Option Price of the Shares to be purchased.
The Option Price upon exercise of this Option shall be payable to the Company in full as
provided for in the Plan.

 

 

 

	 	 	As promptly as practicable after receipt of notice and payment upon exercise, the Company shall
cause to be issued and delivered to the Participant or his or her legal representative, as the
case may be, certificates for the shares so purchased, which may, if appropriate, be endorsed
with appropriate restrictive legends. The share certificates shall be issued in the
Participant’s name (or, at the discretion of the Participant, jointly in the names of the
Participant and the Participant’s spouse). The Company shall maintain a record of all
information pertaining to the participant’s rights under this Agreement, including the number of
shares for which his or her Option is exercisable. If the Option shall have been exercised in
full, this Agreement shall be returned to the Company and canceled.
	 
	8.	 	Beneficiary Designation. The Participant may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any benefit under this
Agreement is to be paid in case of his or her death before he or she receives any or all of
such benefit. Each such designation shall revoke all prior designations by the Participant,
shall be in a form prescribed by the Company, and will be effective only when filed by the
Participant in writing with the Secretary of the Company during the Participant’s lifetime. In
the absence of any such designation, benefits remaining unpaid at the Participant’s death
shall be paid to the Participant’s estate.
	 
	9.	 	Rights as a Stockholder. The Participant shall have no rights as a stockholder of the Company
with respect to the Shares subject to this Agreement until such time as the purchase price has
been paid, and the Shares have been issued and delivered to him or her.
	 
	10.	 	Continuation of Employment. This Agreement shall not confer upon the Participant any right to
continue employment with the Company, nor shall this Agreement interfere in any way with the
Company’s right to terminate the Participant’s service at any time.
	 
	11.	 	Miscellaneous.

	 	(a)	 	This Agreement and the rights of the Participant hereunder are subject to all the terms
and conditions of the Plan, as the same may be amended from time to time, as well as to
such rules and regulations as the Committee may adopt for administration of the Plan. The
Committee shall have the right to impose such restrictions on any Shares acquired pursuant
to the exercise of this Option, as it may deem advisable, including, without limitation,
restrictions under applicable federal securities laws, under the requirements of any stock
exchange or market upon which such Shares are then listed and/or traded, and under any blue
sky or state securities laws applicable to such Shares. It is expressly understood that the
Committee is authorized to administer, construe, and make all determinations necessary or
appropriate to the administration of the Plan and this Agreement, all of which shall be
binding upon the Participant.
	 
	 	(b)	 	The Committee may terminate, amend, or modify the Plan; provided, however, that no such
termination, amendment, or modification of the Plan may in any material way adversely
affect the Participant’s rights under this Agreement, without the written consent of the
Participant.

 

 

 

	 	(c)	 	The Participant acknowledges and agrees that the Company shall have the power and the
right to deduct or withhold, an amount sufficient to satisfy federal, state, and local
taxes (including the Participant’s FICA obligation), domestic or foreign, required by law
to be withheld with respect to any exercise of the Participant’s rights under this
Agreement should Participant fail to make timely payment of all taxes due.
	 
	 	 	 	The Participant may elect, subject to any procedural rules adopted by the Committee, to
satisfy the withholding requirement, in whole or in part, by having the Company withhold
Shares having an aggregate Fair Market Value on the date the tax is to be determined, equal
to the minimum amount required to be withheld.
	 
	 	(d)	 	The Participant agrees to take all steps necessary to comply with all applicable
provisions of federal and state securities laws in exercising his or her rights under this
Agreement.
	 
	 	(e)	 	This Agreement shall be subject to all applicable laws, rules, and regulations, and to
such approvals by any governmental agencies or national securities exchanges as may be
required.
	 
	 	(f)	 	All obligations of the Company under the Plan and this Agreement, with respect to this
Option, shall be binding on any successor to the Company, whether the existence of such
successor is the result of a direct or indirect purchase, merger, consolidation, or
otherwise, of all or substantially all of the business and/or assets of the Company.
	 
	 	(g)	 	To the extent any provision of this Agreement is held by a court of competent
jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of
this Agreement shall not be affected by such holding and shall continue in full force in
accordance with their terms.
	 
	 	(h)	 	To the extent not preempted by federal law, this Agreement shall be governed by, and
construed in accordance with, the laws of the state of Maryland.
	 
	 	(i)	 	Notice hereunder shall be given to the Company at its principal place of business, and
shall be given to the Participant at the address set forth below, or in either case at such
addresses as one party may subsequently furnish to the other party in writing.
	 
	 	(j)	 	This Option is not intended to qualify as an “incentive stock option” under Section 422
of the Code.

 

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the Date of
Grant.

	 	 	 	 	 
	 	Walter Investment Management Corp.

 	 
	 	By:  	 	 
	 	 	 	 

	 	 	 	 	 	 	 

	ATTEST:

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 
	 	 

Participant
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Participant’s name and address:

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