Document:

exv10w1

Exhibit 10.1

March 1, 2011

Jerome J. Selitto

Chief Executive Officer, President & Director

PHH Corporation

3000 Leadenhall Road

Mt. Laurel, New Jersey 08054

Dear Jerry:

This letter confirms and sets forth the terms and conditions of the engagement between Alvarez &
Marsal North America, LLC (“A&M”) and PHH Corporation (the “Company”), including the scope of the
services to be performed and the basis of compensation for those services. Upon execution of this
letter by each of the parties, this letter will constitute an agreement between the Company and
A&M.

	 	1.	 	Description of Services

	 	a.	 	Officers. In connection with this engagement, A&M
shall make available to the Company:

	 	(i)	 	David J. Coles to serve as Chief Financial
Officer, Principal Accounting Officer and Executive Vice President (the
“CFO”).

	 	b.	 	Duties.

	 	(i)	 	The CFO will be responsible for all duties
typical and customary of a public company CFO including, but not
limited to those duties and responsibilities set forth in Exhibit A to
this engagement letter; and

 

 

	 	(ii)	 	The CFO at all times shall be subject to and
comply with the Company’s Code of Business Conduct for Employees and
other related workplace policies, which shall be provided to the CFO
upon the commencement of this engagement.

	 	c.	 	Reporting. The CFO shall report directly to the CEO
and, as requested, shall be available to the Board of Directors.
	 
	 	d.	 	Employment by A&M. The CFO will continue to be
employed by A&M and while rendering services to the Company will continue to
work with other personnel at A&M in connection with other unrelated matters,
which will not unduly interfere with services pursuant to this engagement. For
the avoidance of doubt, it is understood that the “unrelated matters”
referenced in the previous sentence shall relate to the CFO’s obligations and
responsibilities as a Managing Director at A&M. Other than with respect to
CFO’s willful misconduct, as determined upon final adjudication by a court of
competent jurisdiction, A&M shall have no liability to the Company for any acts
or omissions.
	 
	 	e.	 	The parties understand and agree that that nothing herein shall
be construed as creating an employment relationship between the Company and the
CFO and that A&M and CFO shall perform their obligations under this engagement
as independent contractors. CFO hereby disclaims any rights to, or eligibility
to participate in, any benefit or equity plan sponsored by the Company,
including, but not limited to, the Company’s qualified retirement plans, health
and welfare plans or equity and incentive plans.
	 
	 	f.	 	Additional Responsibilities. Upon the mutual agreement
of the Company and A&M, A&M may provide such additional personnel, including
personnel from A&M affiliates, as the Company may
request to assist in performing the services described herein and such other
services as may be agreed to, on such terms and conditions and for such
compensation as the Company and A&M shall agree.

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	 	2.	 	Compensation
	 
	 	a.	 	A&M will be paid by the Company for the services of the CFO at the monthly rate
of $138,125 per calendar month. Such rates shall be subject to adjustment annually at
such time as A&M adjusts its rates generally.
	 
	 	b.	 	In addition, A&M will be reimbursed by the Company for the reasonable
out-of-pocket expenses of the CFO incurred in connection with this assignment, such as
travel, lodging, duplications, computer research, messenger and telephone charges
consistent with the Company’s Business Travel Policy. In addition, A&M shall be
reimbursed by the Company for the reasonable fees and expenses of its external counsel
incurred in connection with the preparation, negotiation and enforcement of this
Agreement. All fees and expenses due to A&M will be billed on a monthly basis or, at
A&M’s discretion, more frequently.
	 
	 	c.	 	The Company and A&M agree that it is appropriate that A&M be entitled to earn
and receive incentive compensation for its services hereunder, in addition to the
regular fees set forth above, which, in the judgment of the Company creates measurable
organizational objectives consistent with the S.M.A.RT. methodology as previously
explained to the CFO and A&M. To establish the criteria for determining such incentive
compensation, A&M and the Company will seek to reach agreement within 30 days from the
date hereof on the terms on which it shall be payable. It is agreed that the amount of
such incentive compensation is capped at 35.29% of A&M’s total monthly fees.

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	 	3.	 	Term

	 	 	 	The engagement will commence as of the date hereof and may be terminated by: (i) the
Company without cause by giving 7 days’ written notice to A&M; and (ii) A&M without
cause by giving 30 days’ written notice to the Company. A&M normally does not
withdraw from an engagement unless the Company misrepresents or fails to disclose
material facts, fails to pay fees or expenses, or makes it unethical or unreasonably
difficult for A&M to continue to represent the Company, or unless other just cause
exists. In the event of any such termination, any fees and expenses due to A&M shall
be remitted promptly (including fees and expenses that accrued prior to but were
invoiced subsequent to such termination). If the Company terminates this engagement
without Cause or if A&M terminates this engagement for Good Reason, A&M shall also
be entitled to receive the amount of any earned but unpaid Incentive Fee in
accordance with the criteria established in Section 2(d) even if such event occurs
within three months of the termination. The Company may immediately terminate A&M’s
services hereunder at any time for Cause by giving written notice to A&M. Upon any
such termination, the Company shall be relieved of all of its payment obligations
under this Agreement, except for the payment of fees and expenses through the
effective date of termination (including fees and expenses that accrued prior to but
were invoiced subsequent to such termination) and its obligations under paragraphs 7
and 8. For purposes of this Agreement, “Cause” shall mean if (i) the CFO is
convicted of, admits guilt in a written document filed with a court of competent
jurisdiction to, or enters a plea of nolo contendere to, an allegation of fraud,
embezzlement, misappropriation or any felony; (ii) the CFO willfully disobeys a
lawful direction of the CEO or the Board; (iii) a material breach of any of A&M’s or
the CFO’s material obligations under this Agreement which is not cured within 30
days of the Company’s written notice thereof to A&M describing in reasonable detail
the nature of the alleged breach; (iv) the death or disability of the CFO; or (v)
the CFO’s determination that he may be unable or unwilling to provide such
certifications in connection with the Company’s filing of its interim or annual
financial reports with the SEC as required by Sections 302 and 906 of the
Sarbanes-Oxley Act of 2002. For purposes of this Agreement, termination
for “Good Reason” shall mean either its resignation caused by a breach by the
Company of

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	 	 	 	any of its material obligations under this Agreement that is not cured within 30
days of A&M having given written notice of such breach to the Company describing in
reasonable detail the nature of the alleged breach or a filing of a petition under
Chapter 11 of the United States Bankruptcy Code in respect of the Company unless
within 45 days thereafter (or, if sooner, prior to the date on which a plan of
reorganization is confirmed or the case is converted to one under Chapter 7), the
Company has obtained judicial authorization to continue the engagement on the terms
herein pursuant to an order which has become a final, non appealable order.

	 	4.	 	No Audit, Duty to Update.

	 	 	 	It is understood that A&M is not being requested to perform an audit, review or
compilation, or any other type of financial statement reporting engagement that is
subject to the rules of and regulation by the AICPA, SEC or other state or national
professional or regulatory body. The CFO and A&M are reasonably entitled to rely on
the accuracy and validity of the data disclosed to them or supplied to them by
employees and representatives of the Company and, with respect to the CFO, such
reliance shall be consistent with his duties and obligations as an executive officer
of the Company.

	 	5.	 	No Third Party Beneficiary.

	 	 	 	The Company acknowledges that all advice (written or oral) given by A&M to the
Company in connection with this engagement is intended solely for the benefit and
use of the Company (limited to its Board and management) in considering the matters
to which this engagement relates. The Company agrees that no such advice shall be
used for any other purpose or reproduced, disseminated, quoted or referred to at any
time in any manner or for any purpose other than accomplishing the tasks referred to
herein without A&M’s prior approval (which shall not be unreasonably withheld),
except as required by law.

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	 	6.	 	Conflicts & Corporate Opportunities.

	 	 	 	A&M is not currently aware of any relationship that would create a conflict of
interest with the Company or those parties-in-interest of which you have made us
aware.
	 
	 	 	 	Because A&M is a consulting firm that serves clients on an international basis in
numerous cases, both in and out of court, it is possible that A&M may have rendered
or will render services to or have business associations with other entities or
people which had or have or may have relationships with the Company, including
creditors of the Company. In the event you accept the terms of this engagement, A&M
will not represent, and A&M has not represented, the interests of any such entities
or people in connection with this matter.
	 
	 	 	 	During the term of this engagement, any and all business or investment opportunities
related to the origination and servicing of residential mortgage loans or fleet
management services (collectively, the “PHH Businesses”), which are based on
information identified or made available to the CFO by or on behalf of the Company
and not otherwise available to him, shall not be used by the CFO or A&M to compete
with the interests of the PHH Businesses.

	 	7.	 	Confidentiality / Non-Solicitation/Work Product.

	 	 	 	a. The CFO and A&M shall keep as confidential all non-public information received from
the Company in conjunction with this engagement, including, but not limited to certain
business, financial, technical, legal, marketing, or other proprietary or confidential
reports, analysis, records, data, computer programs or output, information, or other
material, both oral and written, which the Company deems, and CFO and A&M should
consider, proprietary and confidential (and of independent economic value) to the
Company (collectively, “Confidential Information”). Confidential Information shall also
include any information or documentation which is proprietary or confidential to the
Company’s subsidiaries, affiliates, corporations, limited liability companies,
partnerships, firms, associations, businesses, and organizations, (collectively,
“Affiliates”), including information of Affiliates’ employees, franchisees, sales
associates, brokers, joint-ventures and/or

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	 	 	 	customers. All obligations as to non-disclosure shall cease as to any part of such
Confidential Information at such time as the information: (i) is known to without
restriction prior to the date of disclosure of the information; (ii) is or becomes
publicly available other than as a result of a breach of this engagement letter; (iii)
is independently developed by A&M and CFO without reference to or reliance upon the
Confidential Information; (iv) is approved for release by written authorization of the
Company; (v) is disclosed from a source other than the Company who, to the knowledge of
A&M and CFO , is not in breach of a confidentiality agreement with the Company; or (vi)
is disclosed pursuant to the lawful requirement or order of a court or governmental
agency, provided that, upon the receipt of a request for such a disclosure, A&M or CFO
gives prompt notice thereof to the Company (unless such notice is not permitted or
possible under the circumstances) so that the Company may have the opportunity to
intervene and contest such disclosure and/or seek a protective order or other
appropriate remedy. Promptly upon written request from the Company, A&M and CFO shall
use commercially reasonable efforts to destroy all Confidential Information and any
other materials containing, prepared on the basis of, or reflecting any information in,
the Confidential Information (whether prepared by the parties, their advisors or
otherwise), including all reports, analyses, compilations, studies and other materials
containing or based on the Confidential Information.
	 
	 	 	 	b. Except as specifically provided for in this letter, the Company on behalf of
itself and its subsidiaries and affiliates and any person which may acquire all or
substantially all of its assets agrees that, until two (2) years subsequent to the
termination of this engagement, it will not solicit, recruit, hire or otherwise engage
David J. Coles while employed by A&M or its affiliates (“Solicited Person”).
	 
	 	 	 	c. Until the termination of the Garden Period (as defined below), A&M agrees that it
will not have David Coles provide services substantially similar to those performed
pursuant to this engagement on behalf of any of the following entities or their
affiliates or any person that acquires all or substantially all of the assets of such
business to the extent the role is related to an entity principally engaged in the PHH
Businesses, including, but not limited to the following entities: Mike Albert Leasing,
Inc.; Allstate Leasing, Inc.; ARI (Automotive Rentals, Inc.); Donlen Corporation;
Enterprises Leasing

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	 	 	 	Company; GE Commercial Finance Fleet Services; Emkay Vehicle Leasing; Lease Plan U.S.A.;
Wheels, Incorporated; American Leasing; BBL; MotoLease; Merchants Leasing; Sutton
Leasing; ULTEA; SunTrust; Wells Fargo; The CEI Group; Fleet Response; CCM; Union
Leasing; Wells Fargo Home Mortgage; Bank of America Mortgage; SunTrust; Wells Fargo;
Wells Fargo Home Mortgage; Bank of America Mortgage; Chase Home Finance; Nexstar
Financial; CitiMortgage, Inc.; GMAC Residential Holdings; SunTrust Mortgage, Inc.;
MetLife Bank; Quicken Loans, Inc.; CTX Mortgage; Branch Banking & Trust Co.; Pulte
Mortgage; AmSouth Mortgage; Fifth Third Mortgage; U.S. Bank Home Mortgage; Citizens
Mortgage Corporation; NationStar Mortgage. For the purpose of this provision, the
“Garden Period” shall be the period of time following the termination or expiration of
the David Coles’ role as CFO under this Agreement which shall be equal to 100% (one
hundred per cent) of the amount of days in which David Coles served as CFO for the
Company under this Agreement, but in no event shall such period exceed one-hundred
eighty (180) days.

	 	 	 	c. A&M agrees that, until one year subsequent to the termination of this engagement, it
will not directly solicit, recruit, hire or otherwise engage any employee of the Company
or any of its subsidiaries or affiliates with whom the CFO worked directly during the
terms of this engagement; provided however, that the foregoing restriction shall not be
applicable to Company personnel responding to public solicitations for employment by
A&M.
	 
	 	 	 	d. Any and all reports, documentation, work product or other materials, writings, or
works of authorship delivered by CFO and A&M, its employees or subcontractors to Company
in the course of performing services under this engagement (collectively,
“Deliverables”) shall be deemed a “work for hire” for the sole benefit of and belonging
exclusively to the Company. Upon full and final payment of all fees and expenses owing
to A&M under this Agreement, A&M and CFO hereby assign, and shall be deemed to have
expressly disclaimed, any and all right, title, or interest in and to such Work Product.
Notwithstanding the foregoing, A&M shall retain all right, title and interest in and to
all methodologies, processes, techniques, ideas, concepts, trade secrets, and know-how
embodied in the Deliverables or that A&M or the CFO may develop or supply in connection
with this Agreement (“A&M Knowledge”). Upon full and final payment of all fees and
expenses owing to A&M under this Agreement, A&M hereby grants to Company a non-

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	 	 	 	exclusive, nontransferable, royalty-free license to use the A&M Knowledge in order to
benefit from the intended use of the Deliverables and services provided hereunder, so
long as in doing so Company does not breach any obligation of confidentiality.

	 	8.	 	Indemnification.

	 	 	 	The Company shall indemnify the CFO to the same extent as the most favorable
indemnification it extends to its officers or directors, whether under the Company’s
bylaws, its certificate of incorporation, by contract or otherwise, and no reduction
or termination in any of the benefits provided under any such indemnities shall
affect the benefits provided to the CFO. The CFO shall be covered as an officer
under the Company’s existing director and officer liability insurance policy. As a
condition of A&M accepting this engagement, a Certificate of Insurance evidencing
such coverage shall be furnished to A&M prior to the effective date of this
Agreement. The Company shall give thirty (30) days’ prior written notice to A&M of
cancellation, non-renewal, or material change in coverage, scope, or amount of such
director and officer liability policy. The Company shall also maintain
such insurance coverage for the CFO for a period of not less than two years
following the date of the termination of such officer’s services hereunder. The
provisions of this section 8 are in the nature of contractual obligations and no
change in applicable law or the Company’s charter, bylaws or other organizational
documents or policies shall affect the CFO’s rights hereunder. The attached
indemnity provisions are incorporated herein and the termination of this agreement
or the engagement shall not affect those provisions, which shall survive
termination.

	9.	 	Miscellaneous.

	 	 	 	This Agreement shall (together with the attached indemnity provisions) be: (a)
governed and construed in accordance with the laws of the State of New York,
regardless of the laws that might otherwise govern under applicable principles of
conflict of laws thereof; (b) incorporates the entire understanding of the parties
with respect to the subject matter thereof;

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	 	 	 	and (c) may not be amended or modified except in writing executed by each of the
signatories hereto. The Company and A&M agree to waive trial by jury in any action,
proceeding or counterclaim brought by or on behalf of the parties hereto with
respect to any matter relating to or arising out of the performance or
non-performance of the Company or A&M hereunder. The Company and A&M agree, to the
extent permitted by applicable law, that any Federal Court sitting within the
Southern District of New York shall have exclusive jurisdiction over any litigation
arising out of this Agreement; to submit to the personal jurisdiction of the Courts
of the United States District Court for the Southern District of New York; and to
waive any and all personal rights under the law of any jurisdiction to object on any
basis (including, without limitation, inconvenience of forum) to jurisdiction or
venue within the State of New York for any litigation arising in connection with
this Agreement.

	 	 	 	If the foregoing is acceptable to you, kindly sign the enclosed copy to acknowledge
your agreement with its terms.

	 	 	 	 	 
	 	Very truly yours,

Alvarez & Marsal North America, LLC

 	 
	 	By:  	/s/David J. Coles
 	 
	 	 	David J. Coles 	 
	 	 	Managing Director 	 
	 

	 	 	 	 	 
	Accepted and Agreed:

PHH Corporation

 	 	 
	By:  	/s/ Jerome J. Selitto
 	 	 
	 	Jerome J. Selitto 	 	 
	 	Chief Executive Officer, President and Director 	 	 

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INDEMNIFICATION AND LIMITATION ON LIABILITY AGREEMENT

This indemnification and limitation on liability agreement is made part of an agreement, dated
February 14, 2011 (which together with any renewals, modifications or extensions thereof, is
herein referred to as the “Agreement”) by and between Alvarez & Marsal North America, LLC (“A&M”)
and PHH Corporation (the “Company”), for services to be rendered to the Company by A&M.

A. The Company agrees to indemnify and hold harmless each of A&M, its affiliates and their
respective shareholders, members, managers, employees, agents, representatives and subcontractors
(each, an “A&M Indemnified Party” and collectively, the “A&M Indemnified Parties”) against any and
all losses, claims, damages, liabilities, penalties, obligations and expenses, including the costs
for counsel or others (including employees of A&M, based on their then current hourly billing
rates) in investigating, preparing or defending any action or claim, whether or not in connection
with litigation in which any A&M Indemnified Party is a party, or enforcing the Agreement
(including these indemnity provisions), as and when incurred, caused by, relating to, based upon or
arising out of (directly or indirectly) the A&M Indemnified Parties’ acceptance of or the
performance or nonperformance of their obligations under the Agreement; provided, however, such
indemnity shall not apply to any such loss, claim, damage, liability or expense to the extent it is
found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to
have resulted primarily and directly from such A&M Indemnified Party’s gross negligence or willful
misconduct. The Company also agrees that (a) no A&M Indemnified Party shall have any liability
(whether direct or indirect, in contract or tort or otherwise) to the Company for or in connection
with the engagement of A&M, except to the extent that any such liability for losses, claims,
damages, liabilities or expenses are found in a final judgment by a court of competent jurisdiction
(not subject to further appeal) to have resulted primarily and directly from such A&M Indemnified
Party’s gross negligence or willful misconduct and (b) in no event will any A&M Indemnified Party
have any liability to the Company for special, consequential, incidental or exemplary damages or
loss (nor any lost profits, savings or business opportunity). The Company further agrees that it
will not, without the prior consent of an A&M Indemnified Party, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect
of which such A&M Indemnified Party seeks indemnification hereunder (whether or not such A&M
Indemnified Party is an actual party to such claim, action, suit or proceedings) unless such
settlement, compromise or consent includes an unconditional release of such A&M Indemnified Party
from all liabilities arising out of such claim, action, suit or proceeding.

B. A&M agrees to indemnify and hold harmless each of the Company, its affiliates and their
respective directors, officers, managers, employees, agents, and representatives (each, an “PHH
Indemnified Party” and collectively, the “PHH Indemnified Parties”) against any and all losses,
claims, damages, liabilities, penalties, obligations and expenses, including the costs for counsel
or others (including employees of PHH, based on their then current hourly billing rates) in
investigating, preparing or defending any action or claim, whether or not in connection with
litigation in which any PHH Indemnified Party is a party having resulted primarily and directly
from the willful misconduct of A&M or its employees or agents in connection with the performance of
services under the Agreement. A&M further agrees that it will not, without the prior consent of an
PHH Indemnified Party, settle or compromise or consent to the entry of any judgment in any pending
or threatened claim, action, suit or proceeding in respect of which such PHH Indemnified Party
seeks indemnification hereunder (whether

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or not such PHH Indemnified Party is an actual party to such claim, action, suit or proceedings)
unless such settlement, compromise or consent includes an unconditional release of such PHH
Indemnified Party from all liabilities arising out of such claim, action, suit or proceeding.

C. These indemnification provisions shall be in addition to any liability which the Company may
otherwise have to the Indemnified Parties. In the event that, at any time whether before or after
termination of the engagement or the Agreement, as a result of or in connection with the Agreement
or A&M’s and its personnel’s role under the Agreement, A&M or any A&M Indemnified Party is required
to produce any of its personnel (including former employees) for examination, deposition or other
written, recorded or oral presentation, or A&M or any of its personnel (including former employees)
or any other A&M Indemnified Party is required to produce or otherwise review, compile, submit,
duplicate, search for, organize or report on any material within such A&M Indemnified Party’s
possession or control pursuant to a subpoena or other legal (including administrative) process, the
Company will reimburse the A&M Indemnified Party for its out of pocket expenses, including the
reasonable fees and expenses of its counsel, and will compensate the A&M Indemnified Party for the
time expended by its personnel based on such personnel’s then current hourly rate.

D. If any action, proceeding or investigation is commenced to which any Indemnified Party proposes
to demand indemnification hereunder, such Indemnified Party will notify the the proposed
indemnifying party (A&M or the Company, as applicable, the “Indemnifying Party”), with reasonable
promptness; provided, however, that any failure by such Indemnified Party to notify the
Indemnifying Party will not relieve the Indemnifying Party from its obligations hereunder, except
to the extent that such failure shall have actually prejudiced the defense of such action. With
respect to the Companies indemnification obligations under paragraph A above, the Company shall
promptly pay expenses reasonably incurred by any Indemnified Party in defending, participating in,
or settling any action, proceeding or investigation in which such Indemnified Party is a party or
is threatened to be made a party or otherwise is participating in by reason of the engagement under
the Agreement, upon submission of invoices therefor, whether in advance of the final disposition of
such action, proceeding, or investigation or otherwise. Each Indemnified Party hereby undertakes,
and the Company hereby accepts its undertaking, to repay any and all such amounts so advanced if it
shall ultimately be determined that such Indemnified Party is not entitled to be indemnified
therefor. With respect to any action, proceeding or investigation with respect to which an
Indemnified Party demands indemnification hereunder, the Indemnifying Party may, in lieu of
advancing or reimbursing the expenses of separate counsel for such Indemnified Party, provide such
Indemnified Party with legal representation (whether by the same counsel who represents the
Indemnifying Party or otherwise), provided such counsel is reasonably satisfactory to such
Indemnified Party, at no cost to such Indemnified Party. Nothing in the preceding sentence shall
prevent an Indemnified Party from using separate counsel of its own choice at its own expense. The
Company will be liable for any settlement of any claim against an Indemnified Party made with the
Company’s written consent, which consent shall not be unreasonably withheld.

E. In order to provide for just and equitable contribution if a claim for indemnification pursuant
to these indemnification provisions is made but it is found in a final judgment by a court of
competent jurisdiction (not subject to further appeal) that such indemnification may not be
enforced in such case,

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even though the express provisions hereof provide for indemnification, then the relative fault of
the Indemnifying Party, on the one hand, and the Indemnified Parties, on the other hand, in
connection with the statements, acts or omissions which resulted in the losses, claims, damages,
liabilities and costs giving rise to the indemnification claim and other relevant equitable
considerations shall be considered; and further provided that in no event will the A&M Indemnified
Parties’ aggregate contribution for all losses, claims, damages, liabilities and expenses covered
under the indemnity under Paragraph A above with respect to which contribution is available
hereunder exceed the amount of fees actually received by the Indemnified Parties pursuant to the
Agreement. No person found liable for a fraudulent misrepresentation shall be entitled to
contribution hereunder from any person who is not also found liable for such fraudulent
misrepresentation.

F. The rights provided herein shall not be deemed exclusive of any other rights to which the
Indemnified Parties may be entitled under the certificate of incorporation or bylaws of the
Company, any other agreements, any vote of stockholders or disinterested directors of the Company,
any applicable law or otherwise.

	 	 	 	 	 	 	 

	PHH Corporation	 	Alvarez & Marsal North America, LLC
	 
	 	 	 	 	 	 
	By:

	 	/s/ Jerome S. Selitto
	 	By:
	 	David J. Coles
	 

	 	 
	 	 	 	 

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Exhibit A

Duties and Responsibilities of the Interim Chief Financial Officer

	•	 	Establish and maintain a collaborative and interactive relationship with senior executives
so as to identify their needs and seek a full range of business solutions.
	 
	•	 	Provide rigorous analysis and sound business judgment when reviewing with management the
results of operations and highlighting variances to plan; help drive corrective actions; and
work closely with senior management in the overall leadership of the company.
	 
	•	 	Evaluate the Company’s substantive planning and analysis process so as to measure true
business performance intra-monthly as well as monthly using specific key business indicators,
financial and non-financial, on a real time and actionable basis.
	 
	•	 	Work with the CEO to ensure critical, current and relevant business issues are being
appropriately addressed and create alignment with the business plan.
	 
	•	 	Direct and oversee the accounting function, including financial reporting, tax and
regulatory filings, financial projections/forecasts, budgeting and internal management reports
as well as reports to the Board. Ensure timely and accurate analysis of same.
	 
	•	 	Ensure full transparency and complete, accurate and timely reporting to senior management
and the Board.
	 
	•	 	Evaluate and strengthen the capabilities of the financial staff by developing people
internally and recruiting key personnel from outside the organization to manage and control
the increased demands for financial data and information.
	 
	•	 	Manage the balance sheet, including asset/liability policy and execution as well as
liquidity management, corporate investment functions, securities portfolio management,
wholesale liability portfolio management, and funds transfer process.
	 
	•	 	Assist in the development of Investor Relations strategy and program that communicates the
company’s strategic vision and future -value proposition.
	 
	•	 	Prepare presentations for the management team and Board for all proposed substantive new
transactions or activities that will impact the company.
	 
	•	 	In collaboration with the CEO maintain strong lines of communication with: (a) financial
analysts; (b) shareholders; (c) investment bankers; (d) lenders; and (e) rating agencies
	 
	•	 	Oversee financial compliance efforts in accordance with SEC and Sarbanes Oxley regulations
and requirements and ensure PHH maintains a sound system of internal controls.

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	•	 	Liaise with the Board of Directors on all financial matters related to corporate governance
and compliance with applicable laws, regulations, rules and policies that impact or may impact
the company.
	 
	•	 	Manage, plan, and schedule personnel and resources required to meet the current and future
needs of the corporation with respect to current and future business initiatives.

15Exhibit 10.24

Exhibit 10.24

AMENDED AND RESTATED

CHANGE OF CONTROL AGREEMENT

This Agreement is made and entered into as of the 15th day of November, 2010 (the
“Effective Date”) by and between Bonalyn J. Hartley (the “Employee”) of Merrimack,
New Hampshire and Pennichuck Corporation (the “Corporation”), a New Hampshire corporation
with principal offices in Merrimack, New Hampshire.

WHEREAS, the Corporation and the Employee are each party to that certain Change of Control
Agreement dated as of October 25, 2006, and amended by the first and second amendments thereto (the
“CIC Agreement”); and

WHEREAS, the Corporation and the Employee wish to amend certain provisions of such CIC
Agreement and to restate, in its entirety, the CIC Agreement, as so amended.

NOW THEREFORE, the Corporation and the Employee, in consideration of the terms and conditions
set forth herein and other valuable consideration, receipt of which is hereby acknowledged,
mutually covenant and agree as follows:

Article 1

TERM

(a) The term of this Agreement shall be for the period commencing on the Effective Date and
ending two (2) years from the Effective Date, unless the Employee’s employment is sooner terminated
as provided in Article 6.1 hereof (the “Term”). On the first anniversary of the Effective
Date and on each subsequent anniversary of the Effective Date, the Term of this Agreement shall
automatically be extended for an additional one (1) year period, and the provisions hereof shall
remain applicable for each such subsequent two-year period, unless either party gives written
notice to the other, not later than each anniversary of the Effective Date, that the Corporation or
the Employee does not concur in such extension.

(b) Notwithstanding the foregoing, in the event that there is a “Change of Control” (as that
term is defined in Article 3 below), the Term of this Agreement will automatically be extended to
two (2) years, beginning on the day on which the Change of Control occurs. Thereafter, this
Agreement will be automatically extended as described in paragraph (a) of this Article 1.

Article 2

PAYMENTS UPON CHANGE OF CONTROL AND TERMINATION EVENT

The Corporation shall make payments to the Employee as provided for in Article 4 upon the
occurrence of both a Change of Control of the Corporation and a Termination Event, as such terms
are defined in Article 3.

 

 

 

Article 3

DEFINITIONS

(a) “Base Amount” shall mean the amount designated as such on Appendix A hereto, which
Appendix A is incorporated herein by reference in its entirety and made a part hereof.

(b) “Benefit Amount” shall mean the amount designated as such on Appendix A hereto, which
Appendix A is incorporated herein by reference in its entirety and made a part hereof.

(c) A “Change of Control” shall be deemed to have occurred if any of the following have
occurred:

	 	(i)	 	any individual, corporation (other than the Corporation), partnership, trust,
association, pool, syndicate, or any other entity or any group of persons acting in
concert becomes the beneficial owner, as that concept is defined in Rule 13d-3
promulgated by the Securities Exchange Commission under the Securities Exchange Act of
1934, as a result of any one or more securities transactions (including gifts and stock
repurchases but excluding transactions described in subdivision (ii) following) of
securities of the Corporation possessing fifty-one percent (51%) or more of the voting
power for the election of directors of the Corporation;

	 	(ii)	 	there shall be consummated any consolidation, merger or stock-for-stock
exchange involving securities of the Corporation in which the holders of voting
securities of the Corporation immediately prior to such consummation own, as a group,
immediately after such consummation, voting securities of the Corporation (or if the
Corporation does not survive such transaction, voting securities of the corporation
surviving such transaction) having less than fifty percent (50%) of the total voting
power in an election of directors of the Corporation (or such other surviving
corporation);

	 	(iii)	 	“approved directors” shall constitute less than a majority of the entire Board
of Directors of the Corporation, with “approved directors” defined to mean the members
of the Board of Directors of the Corporation as of the date of this Agreement and any
subsequently elected members of the Board of Directors of the Corporation who shall be
nominated or approved by a majority of the approved directors on the Board of Directors
of the Corporation prior to such election;

	 	(iv)	 	there shall be consummated any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions, excluding any transaction described in
subdivision (ii) above), of all, or substantially all, of the assets of the Corporation
or its subsidiaries (on a consolidated basis) to a party which is not controlled by or
under common control with the Corporation; or

	 	(v)	 	to the extent not otherwise described in the preceding clauses (i) through
(iv), inclusive, there shall be consummated the transaction contemplated under the
Agreement And Plan of Merger between the City of Nashua, New Hampshire and the
Corporation.

 

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(d) A “Termination Event” shall be deemed to have occurred if, within the twenty-four month
period following a Change of Control, the Employee separates from employment with the Corporation
(including the Corporation’s successor(s) and, if not a successor, such entity as survives a Change
in Control event) due to involuntary termination (including resignation by the Employee with Good
Reason) for reasons other than termination by the Corporation for Good Cause.

(e) “Good Cause” shall mean: (i) the material willful or continued failure by the Employee to
perform the Employee’s reasonably assigned duties for the Corporation or a subsidiary (other than
such failure resulting from the Employee’s incapacity due to physical or mental illness), after a
written demand for performance is delivered to the Employee by the President of the Corporation or
the applicable subsidiary (or the respective Board of Directors if the Employee then serves in the
capacity of president thereof) which specifically identifies the manner in which the President (or,
as the case may be, the Board) believes the Employee has not performed the Employee’s duties; (ii)
an act or acts intended to result in personal enrichment at the material expense of the Corporation
or a subsidiary; or (iii) an act or acts of dishonesty taken by the Employee or of willful
misconduct which are materially injurious to the Corporation or a subsidiary. Notwithstanding the
foregoing, in no event shall Good Cause exist at any time during the two hundred ten (210) calendar
day period commencing on a Change of Control described in Section 3(c)(v) of this Agreement.

(f) “Good Reason” shall mean (1) the substantial withholding, substantial adverse alteration
(including assignment of duties that are inconsistent with the Employee’s position, duties, and
status immediately prior to the Change of Control) or substantial reduction of responsibility,
authority, or compensation (including any compensation or benefit plan in which the Employee
participates or substitute plans adopted prior to the Change of Control) to which the Employee was
charged or empowered with or entitled to immediately prior to a Change of Control of the
Corporation or to which the Employee would normally be charged or empowered with or entitled to
from time to time by reason of the Employee’s office, for reasons other than Good Cause or (2) the
Employee being required to be based at any office or location other than one within a 30-mile
radius of the office at which the Employee was based immediately prior to the Change of Control.
Without limiting the foregoing and notwithstanding any provision of this Agreement to the contrary,
Good Reason shall be deemed to exist at all times after the expiration of the one hundred eighty
(180) calendar day period commencing on a Change of Control described in Section 3(c)(v) of this
Agreement.

 

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Article 4

CASH PAYMENTS

Upon the occurrence of both a Change of Control of the Corporation and a Termination Event,
the Corporation shall pay to the Employee on the date of the Termination Event an amount equal to
the sum of the Base Amount and the Benefit Amount, as defined in Article 2,
above, (less applicable withholdings) on a one-time lump sum basis; provided that, in
consideration thereof, prior to such payment the Employee executes and delivers to the Corporation,
in form and content acceptable to the Corporation, a release of all claims and causes of action
that the Employee has or may ever have against the Corporation arising from the termination of the
Employee’s employment and under this Agreement provided that nothing herein shall require a release
of claims of breach of this Agreement.

It is the parties’ intent that any payment required under this Agreement constitute a payment
on account of a change in ownership or effective control of the Corporation for purposes of Section
409A(a)(2)(A)(v) of the Internal Revenue Code of 1986, as amended (the “Code”) to the
extent that any payment or other thing of value constitutes deferred compensation subject to said
Section 409A. Notwithstanding the foregoing, if the Employee is a “specified employee” within the
meaning of Section 409A(a)(2)(B)(i) of the Code at the time the Employee’s employment terminates,
and the lump sum payment to which the Employee is entitled under this Agreement is treated as being
made on account of separation from service pursuant to Section 409A(a)(2)(A)(i) of the Code, such
payment shall be paid to the Employee pursuant to this Article 4 on the first business day of the
seventh month commencing after the month during which the Employee’s employment terminates;
provided however that if such payment is due to involuntary separation from service within the
meaning of Treasury Regulation Sections 1.409A-l(b)(9)(iii) and 1.409A-1(n):

	 	(i)	 	The Employee shall be entitled to receive the benefit provided in this Article
4, regardless of the Employee’s status as a “specified employee,” to the extent the
total amount of such payment does not exceed two times the lesser of (x) the sum of the
Employee’s annualized compensation based on the annual rate of pay for services
provided to the Corporation for the taxable year of the Employee preceding the taxable
year of the Employee in which the Employee’s employment terminates (adjusted for any
increase during that year that was expected to continue indefinitely if the Employee’s
employment had not been terminated), or (y) the maximum amount that may be taken into
account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year
in which the Employee’s employment is terminated; and

	 	(ii)	 	Any portion of the lump sum benefit payable under this Article 4 that that is
in excess of the amount described in subsection (i) shall be paid to the Employee on
the first business day of the seventh month commencing after the month during which the
Employee’s employment terminates.

Article 5

DEATH OF EMPLOYEE

If the Employee dies following a Change of Control and Termination Event and before receiving
the payment due to her under this Agreement, the Corporation shall make such payment to the
Employee’s designated beneficiary, or failing such designation, to the estate of the Employee.

 

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Article 6

EMPLOYMENT

6.1 No Right to Continued Employment. This Agreement shall not confer upon the
Employee any right with respect to continuance of employment by the Corporation or any subsidiary,
nor shall it interfere in any way with the right of the Corporation to terminate the Employee’s
employment at any time. No payments hereunder shall be required except upon the occurrence of both
a Change of Control of the Corporation and a Termination Event as set forth in Article 3 herein.
Thus, except as specifically provided in Articles 2 and 4 herein, no payments hereunder shall be
made on account of termination of the Employee’s employment (i) upon the Employee’s death,
disability or retirement, (ii) by the Corporation with or without cause, or (iii) upon the
Employee’s voluntary termination.

6.2 No Duty to Seek Other Employment. Amounts payable to the Employee under this
Agreement shall not be reduced by the amount of any compensation received by the Employee from any
other employer or source, and the Employee shall not be under any obligation to seek other
employment or gainful pursuit as a result of this Agreement.

Article 7

ATTORNEY’S FEES

The Corporation also agrees that it shall promptly reimburse the Employee, upon written demand
by the Employee, as incurred, all legal fees and expenses that the Employee may reasonably incur as
a result of any delayed payment, dispute, contest, litigation or arbitration, subject only to the
obligation of the Employee to reimburse the Corporation for such legal fees and expenses described
in the final sentence of Article 9.

Article 8

REDUCTION OF PAYMENTS

In the event any of the payments made under this Agreement would be considered an “excess
parachute payment” as defined in Section 280G of the Internal Revenue Code of 1986, as amended,
then there shall be a reduction in the amount otherwise payable under this Agreement such that all
payments are deductible by the Corporation.

Article 9

ARBITRATION

Any dispute, controversy or claim arising out of or relating to this Agreement shall be
settled by arbitration conducted in Nashua, New Hampshire or other mutually agreeable location in
the State of New Hampshire. The matter will be heard promptly by a single arbitrator selected by
mutual agreement by the Corporation and the Employee. Should the Corporation and the Employee be
unable to agree upon an arbitrator within 30 days of either party demanding arbitration, an
arbitrator will be selected in accordance with the commercial arbitration rules of the American
Arbitration Association. Unless the parties mutually agree otherwise, once appointed, the
arbitrator will make all rulings on procedural and evidentiary matters and will determine the date,
time and place of any hearings. The arbitrator shall have no power to add to,
subtract from, modify or disregard any of the provisions of this Agreement. The arbitrator’s
decision shall be consistent with the specific terms of this Agreement. The arbitrator will issue
a written decision within 30 days of the hearing or submission to the Employee. The arbitrator’s
decision will be final and binding on all parties. This arbitration provision is intended to be
enforceable and the Agreement is subject to the provisions of NH RSA Chapter 542.

 

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The Corporation agrees to pay the cost of the arbitrator. In the event that the arbitrator
substantially rejects the Employee’s grievance or position, then the arbitrator may also order that
Employee shall reimburse the Corporation for one-half of the costs of the arbitrator and all legal
fees and expenses of the Employee that were previously reimbursed by the Corporation pursuant to
Article 7.

Article 10

MISCELLANEOUS

10.1 Entire Agreement. This Agreement constitutes the entire agreement between the
parties, relating to the subject matter hereof and supersedes and replaces all prior agreements
relating to said subject matter, including but not limited to, the CIC Agreement.

10.2 Governing Law. This Agreement shall be governed by and is to be construed and
enforced in accordance with the laws of the State of New Hampshire.

10.3 Waivers and Modifications; Termination. This Agreement (including Appendix A,
which is incorporated in its entirety into this Agreement and made a part hereof) may not, in whole
or in part, be waived, changed, amended, discharged or terminated orally or by any course of
dealing between the parties, but only by an instrument in writing signed by the parties hereto. No
waiver by either party of any breach by the other of any provision hereof shall be deemed to be a
waiver of any later or other breach hereof or as a waiver of any other provision of this Agreement.
This Agreement shall terminate as of the time the Corporation makes the final payment which it may
be obligated to pay hereunder.

10.4 Severability. In any case any one or more of the provisions contained in this
Agreement for any reason shall be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision of this Agreement,
but this Agreement shall be construed as if such invalid, illegal or unenforceable provisions had
never been contained herein.

10.5 Counterparts. This Agreement may be made and executed in counterparts, each of
which shall constitute an original for all purposes.

10.6 Section Headings. The descriptive section headings herein have been inserted for
convenience only and shall not be deemed to define, limit, or otherwise affect the construction of
any provision hereof.

10.7 Notices. Any notice or other communication pursuant to this Agreement shall be
in writing and shall be deemed to have been given or made when personally delivered, or when mailed
by registered or certified mail, postage prepaid, return receipt requested, to the other party. In
the case of the Corporation, any such notice shall be delivered or mailed to its principal
office. In the case of the Employee, any such notice shall be delivered in person or mailed
to the Employee’s last known address as reflected in the records of the Corporation.

 

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10.8 Assignment. The Employee acknowledges that the services to be rendered by the
Employee are unique and personal. Accordingly, the Employee may not assign any of the Employee’s
rights or delegate any of the Employee’s duties or obligations under this Agreement or otherwise
assign this Agreement. The rights and obligations of the Corporation under this Agreement shall
inure to the benefit of, and shall be binding upon, the successors and assigns of the Corporation.

10.9 Confidential Information. At all times during and after the Employee’s
employment with the Corporation, the Employee shall treat as confidential and shall not divulge,
furnish or make known to or accessible to, or use for the benefit of anyone other than the
Corporation, any confidential information concerning the Corporation obtained during the course of
the Employee’s employment. Confidential information includes, but is not limited to: ideas,
inventions, discoveries, developments, processes, designs, formulas, patterns, devices, programs,
methods, techniques, compilations of scientific, technological or business information, proprietary
information, and trade secrets. The Employee agrees that during the term of and following the
termination of the Employee’s employment with the Corporation, the Employee will not disclose to
any person or use in any way any such confidential information, other than (i) information that is
generally known in the Corporation’s industry or acquired from public sources, (ii) as required by
any court, supervisory authority, administrative agency or applicable law, or (iii) with the prior
written consent of the Corporation.

10.10 Non-Compete. The Employee agrees that during the Term of this Agreement and for
a period of twelve (12) months after the Term expires, he will not engage in any activity or
business endeavor which directly competes with the regulated water utility business operations
and/or the non-regulated water service business operations (separately and together, the “Water
Business”) conducted by the Corporation within the New England region, so called, encompassing the
states of New Hampshire, Maine, Vermont, Massachusetts, Rhode Island and Connecticut. The Employee
agrees not to divert or attempt to divert from the Corporation any of its existing Water Business
within said New England region, and particularly not influence or attempt to influence any of the
Corporation’s Water Business customers to do business with any other regulated or non-regulated
water business; and further, he will not solicit or attempt to solicit directly or indirectly any
employee of the Corporation to leave its employ to join any other Water Business. In addition to
constituting a material breach of this Agreement, failure to comply with the provisions of this
Section 10.10 in any material respect will result in the Employee’s forfeiting any payments to
which he might otherwise be entitled hereunder and/or the reimbursement to the Corporation upon
demand of any payments previously paid to the Employee upon termination of employment. The parties
agree that the Corporation may pursue any remedy under law or at equity, including specific
performance and injunctive relief, to protect its rights hereunder and that money damages alone
will be inadequate. This Section 10.10 shall survive the termination of this Agreement.

10.11 Authorization. The Corporation represents and warrants that the execution of
this Agreement has been duly authorized by requisite action of the Board of Directors of the
Corporation or a committee thereof having authority with respect to such authorization.

 

- 7 -

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first
written above.

	 	 	 	 	 	 	 
	WITNESS:	 	PENNICHUCK CORPORATION	 	 
	 
	 	 	 	 	 	 
	/s/ Karen Giotas

	 	By:
	 	/s/ Duane C. Montopoli	 	 
	 

	 	 	 	 

Name: Duane C. Montopoli
	 	 
	 

	 	 	 	Its: President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	WITNESS:	 	EMPLOYEE:	 	 
	 
	 	 	 	 	 	 
	/s/ Mark G. Savoie	 	/s/ Bonalyn J. Hartley	 	 
	 	 	 	 	 
	 	 	Bonalyn J. Hartley	 	 

 

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Bonalyn Hartley

APPENDIX A

“Base Amount” means an amount equal to two times the greater of the Employee’s annual base salary,
as adjusted from time-to-time by the Board of Directors or a committee thereof having authority
with respect to the Employee’s annual compensation, (1) as in effect immediately prior to the
Change of Control, or (2) as in effect on the date of the Termination Event; provided, however,
that with respect to any Termination Event occurring prior to April 1, 2011, the Base Amount shall
not be less than $273,000.

“Benefit Amount” means an amount equal to the cost of providing, at no cost to the Employee (1) for
a period of eighteen months, continuation of the medical and dental insurance in which the Employee
was enrolled immediately prior to the Termination Event and (2) for a period of twenty-four months,
all other employee fringe benefits to which the Employee was eligible immediately prior to the
Termination Event, including, without limitation, group life insurance, group accidental death and
dismemberment insurance, officer’s life insurance, short-term disability insurance and long-term
care insurance; provided, however, that measured as of November 1, 2010, the Benefit Amount shall
not be less than $31,580. Without limiting the foregoing, with respect to benefits provided by
means of insurance, the cost of providing such benefits shall be the applicable premiums for such
insurance; to the extent benefits are not provided by means of insurance, the cost shall be the
benefit payments. For this purpose, the cost of future premiums and benefit payments shall not be
subject to reduction to reflect their present value.

 

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