Form of PHH Corporation Retention Agreement for Certain Executive Officers as approved by the PHH Corporation Compensation Committee on June 7, 2007. (Personally Presented) Dear ______:
Exhibit
10.2
Form
of PHH Corporation Retention Agreement for Certain Executive Officers as
approved by the PHH Corporation Compensation Committee on June 7,
2007.
_______,
2007
_______
(Personally
Presented)
Dear
______:
This
document outlines the
administrative guidelines associated with a retention bonus that PHH is
providing to you (the “Special Retention Bonus”). In this document,
“PHH” means PHH Corporation, its current and future owners, and
subsidiaries. The Special Retention Bonus is contingent upon your
continued compliance with the terms and conditions set forth
herein. Additionally, in order to be eligible to receive the Special
Retention Bonus, you must agree to the terms and conditions in this letter
agreement by signing it and returning it to Xxxxxxx Xxxxxx no later than _____,
2007.
1. Special
Retention Bonus. The Special Retention Bonus Agreement (“letter
agreement”) consists of one payment (the “Payment”) of your annual target bonus
for 2007, in an amount equal to $_______, which amount shall
be pro-rated through the Effective Time of the Merger (the
date on which the merger closes and becomes effective, as more fully defined
in
the Agreement and Plan of Merger dated as of March 15, 2007 by and among PHH
Corporation, General Electric Capital Corporation and Jade Merger Sub, Inc.
(the
“Merger Agreement”)). Subject to your compliance with the terms of
this letter agreement, PHH agrees to pay you the Special Retention Bonus as
soon
as practicable following the earlier of the Effective Time of the Merger and
December 31, 2007, (the earlier of such two dates referred to as the “Retention
Date”) provided that you (i) are employed by PHH on the Retention Date or
(ii) incur a Qualifying Separation from Service with PHH before the Retention
Date and execute the General Release substantially in the form attached hereto
as Exhibit A and do not revoke such General Release as set forth
therein.
Your
eligibility for the Special Retention Bonus is determined based on your
satisfactory job performance and your compliance with the terms of this letter
agreement.
2. Definitions. For
purposes of this letter agreement, the following terms have the following
definitions:
(a) “Qualifying
Separation from Service” has the meaning provided within Section 409A of the
Internal Revenue Code of 1986 (the “Code”), which includes a termination of
employment as a result of any (i) involuntary termination of employment other
than for Cause, or (ii) voluntary termination of employment by you as a result
of any (I) change in the required location of your employment as of the date
of
this letter agreement in excess of 20 miles, (II) material diminution in your
duties or responsibilities as of the date of this letter agreement, provided
that the mere occurrence of the Merger, the Mortgage Business Sale (as defined
in the Merger Agreement) and other transactions contemplated by the Merger
Agreement or the Mortgage Business Sale Agreement (including the failure of
you
to (x) retain responsibilities and duties in respect of either the Mortgage
Business or the Fleet Business (as defined in the Merger Agreement) or (y)
hold
a position in a public company) shall not constitute diminution in duties or
responsibilities, or (III) reduction of your base salary or material reduction
in compensation opportunity as of the date of this letter
agreement.
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(b) “Cause”
means (i) a material failure to substantially perform your duties as an employee
of PHH (other than failure resulting from incapacity due to physical or mental
illness); (ii) any act of fraud, misappropriation, dishonesty, embezzlement
or
similar conduct against, or relating to the assets of, PHH; (iii) your
conviction (or plea of nolo contendere) of a felony or any crime involving
moral
turpitude; (iv) repeated instances of negligence in the performance of your
job
or any instance of gross negligence in the performance of your duties as an
employee of PHH or (v) any breach by you of any fiduciary obligation owed to
PHH
or any material element of PHH’s Code of Ethics, Code of Conduct or other
applicable workplace policies.
(c) “Required
Performance Standard” means performing your job duties for PHH to the best of
your ability and in accordance with reasonable instructions and directions
from
your supervisor, and the reasonable workplace policies and procedures
established by PHH, as applicable, from time to time.
3. Obligations. You
agree to maintain your performance at or above the Required Performance Standard
during the term of this letter agreement. You agree to all the
Covenants and Other Terms specified.
4. Covenants. You
recognize and acknowledge that all information pertaining to the affairs,
business, results of operations, accounting methods, practices and procedures,
members, acquisition candidates, financial condition, clients, customers or
other relationships of PHH, including without limitation the terms and
conditions of this letter agreement (“Confidential Information”) is confidential
and is a unique and valuable asset of PHH. You will not, at any time,
including following your separation from service with PHH, give to any person,
firm, associate, corporation, or governmental agency any Confidential
Information, except as may be required by law. You will not make use
of the Confidential Information for your own purposes or for the benefit of
any
person or organization other than PHH. You will also use your best
efforts to prevent the disclosure of Confidential Information by
others. You agree to continue to comply with the PHH Code of Ethics
and all applicable workplace policies. All records, memoranda, etc.
relating to the business of PHH are confidential and will remain the property
of
PHH. You shall return all PHH property to PHH within three days of
the effective date of your separation from service. If you
violate the terms of this Section 4, PHH will be entitled, upon making the
requisite showing, to, among other things, preliminary and/or permanent
injunctive relief in any court of competent jurisdiction to restrain the breach
of or otherwise to specifically enforce any of the covenants contained in this
Section 4 without the necessity of showing any actual damage or that monetary
damages would not provide an adequate remedy. Such right to an
injunction will be in addition to, and not in limitation of, any other rights
or
remedies PHH may have under this letter agreement.
Providing
a retention incentive such as this is a very unusual action by
PHH. As such, concurrent with providing the program, we require that
you affirm certain understandings that have been in place between us to this
time, and upon which PHH will continue to rely. They are described
below. The Special Retention Bonus described in this letter agreement
is subject to and contingent upon your compliance with the
covenants. If it is determined by PHH that you have violated such
covenants, in addition to any other remedies that PHH may have, your rights
under this letter agreement to the Special Retention Bonus will be immediately
and automatically forfeited, and PHH will have the right to receive from you
reimbursement for the cost of any portion of the Special Retention Bonus that
you have received.
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PHH
considers the fact of the letter agreement’s existence, your participation, and
its details to be confidential and proprietary business information, subject
to
restriction under the PHH Code of Ethics. You hereby agree that
details of the Special Retention Bonus Agreement and the fact of your
participation in it, will be kept confidential by you and will not be disclosed
by you to any other third party (except to your spouse or as may be required
in
the furtherance of your relevant job duties as an employee of PHH with
responsibility for accounting, tax, financial reporting and/or legal matters)
without the express consent of PHH.
5. Other
Terms.
(a) Withholding. PHH
retains the right to withhold from any amounts due under this letter agreement,
any income, employment, payroll, excise and other taxes as PHH may, in its
sole
discretion, deem necessary.
(b) No
Contract of Employment. Nothing in this letter agreement should
be construed by you to be a contract of employment and in no way obligates
you
to remain employed with PHH (and does not obligate such entities to continue
to
employ you).
(c) Notice
and Opportunity to Cure. Notwithstanding anything in Section 1 to
the contrary, (i) no Payment shall be made in connection with any voluntary
termination of employment described in clause (ii) of Section 2(a) unless you
provide PHH with written notice of the existence of the condition described
in
clause (ii) no later than 90 days after the initial existence of such condition
is known to you and PHH fails to remedy such condition within 30 days of the
date of such written notice; and (ii) no termination shall be deemed to be
for
Cause as described in clauses (i), (iv) or (v) of Section 2(b) unless PHH
provides you with written notice of the existence of the conditions that
constitute Cause no later than 90 days after the initial existence of such
condition is known to PHH and you fail to remedy such condition within 30 days
of the date of such written notice.
(d)
Arbitration. Any dispute, controversy or claim arising under
or in connection with this letter agreement shall be settled exclusively by
arbitration, conducted before a panel of three arbitrators sitting in a location
selected by you within fifty (50) miles from the location of your employment
as
of the date hereof, in accordance with the JAMS Employment Arbitration Rules
and
Procedures then in effect. Judgment may be entered on the
arbitrator’s award in any court having jurisdiction. Any dispute,
controversy or claim in connection with this letter agreement shall be reviewed
based on the de novo standard of review with respect to any determinations
made
by PHH. In the event that you substantially prevail in any such
dispute, controversy or claim, all costs and reasonable attorneys’ fees paid or
incurred by you in connection with such dispute, controversy or claim shall
be
paid or reimbursed by PHH.
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(e)
Amendment and Termination. This letter agreement may not be
amended or terminated without written consent by both you and PHH.
(f) Facility
of Payment. If you are under legal disability or, in PHH’s
reasonable opinion, are in any way incapacitated so as to be unable to manage
your affairs, PHH may cause payments or benefits that would otherwise be
provided to such person to be provided to your legal representative for his
or
her benefit or to be applied for the benefit of such person in any other manner
that PHH may determine. Such provision shall completely discharge the
liability of PHH for payments and benefits hereunder.
(g) Notices. Notices
and all other communications provided for herein shall be in writing and shall
be deemed to have been duly given when personally delivered or when mailed
by
United States certified mail, return receipt requested, or by overnight courier,
postage prepaid, as follows:
|
a.
|
if
to the Company,
|
|
|
PHH
CORPORATION
|
0000
Xxxxxxxxxx Xxxx
Xx.
Xxxxxx, Xxx
Xxxxxx 00000
Attn: General
Counsel
|
b.
|
if
to you, at the home address which you most recently communicated
to PHH in
writing.
|
Either
party may provide the other with notice of a change of address, which shall
be
effective upon receipt.
(h) Gender
and Number. A pronoun or adjective in the masculine gender includes the
feminine gender, the singular includes the plural and the plural includes the
singular, unless the context clearly indicates otherwise.
(i)
Governing Law. This letter agreement shall be construed,
administered and enforced in accordance with the laws of the [State of
Maryland/New Jersey] to the extent not superseded by federal law.
(j) Integration
with Other Benefit Programs. Benefits payable under this letter
agreement will not increase or decrease the benefits otherwise available to
you
under any of PHH’s retirement plans, welfare plans or any other employee benefit
plans or programs unless otherwise expressly provided in any particular plan
or
program.
(k) Severability. If
any provision of this letter agreement shall be held to be invalid or
unenforceable by a court of competent jurisdiction, then the remaining
provisions of this letter agreement shall remain operative and in full force
and
effect.
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(l) Successors. This
letter agreement shall inure to the benefit of, and be binding upon, each
successor of PHH, whether by merger, consolidation, transfer of all or
substantially all of its assets or otherwise.
(m) Counterparts. For
convenience of the parties and to facilitate execution, this letter agreement
may be executed in two or more counterparts, each of which shall be deemed
an
original, but all of which shall constitute one and the same document.
Transmission by facsimile of an executed counterpart signature page hereof
by a
party hereto shall constitute due execution and delivery of this letter
agreement by such party.
If
you have any questions about this
letter agreement, you may contact Xxxxxxx Xxxxxx at (000) 000-0000.
PHH
CORPORATION
_______________________________
By:
Its:
Agreed
and Acknowledged:
_________________________________
[Executive’s
Name]
Date:
____________________________
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EXHIBIT
A
GENERAL
RELEASE
THIS
RELEASE (the “Release”) is entered into between
_____________________(“Executive”) and PHH Corporation, a Maryland
corporation (the “Company”), for the benefit of the
Company. The entering into and non-revocation of this Release is a
condition to Executive’s right to receive the payments under the Special
Retention Bonus Agreement. Capitalized terms used and not defined
herein shall have the meaning provided in the Special Retention Bonus
Agreement.
Accordingly,
Executive and the Company agree as follows.
1. IN
CONSIDERATION FOR THE PAYMENTS AND OTHER BENEFITS PROVIDED TO EXECUTIVE BY
THE
SPECIAL RETENTION BONUS AGREEMENT, TO WHICH EXECUTIVE IS NOT OTHERWISE ENTITLED,
AND THE SUFFICIENCY OF WHICH EXECUTIVE ACKNOWLEDGES, EXECUTIVE REPRESENTS AND
AGREES, AS FOLLOWS:
(a) Executive,
for himself, his heirs, administrators, representatives, executors, successors
and assigns (collectively “Releasers”), hereby irrevocably and
unconditionally releases, acquits and forever discharges and agrees not to
xxx
the Company or any of its subsidiaries, divisions, affiliates and related
entities and their respective current and former directors, officers,
shareholders, trustees, employees, consultants, independent contractors,
representatives, agents, servants, successors and assigns and all persons acting
by, through or under or in concert with any of them (collectively
“Releasees”), from all rights and liabilities up to and including the
date of this Release arising under or relating to the employment of the
Executive and from any and all charges, complaints, claims, liabilities,
obligations, promises, agreements, controversies, damages, actions, causes
of
actions, suits, rights, demands, costs, losses, debts and expenses of any nature
whatsoever, known or unknown, suspected or unsuspected and any claims of
wrongful discharge, breach of contract, implied contract, promissory estoppel,
defamation, slander, libel, tortious conduct, employment discrimination or
claims under any federal, state or local employment statute, law, order or
ordinance, including any rights or claims arising under Title VII of the Civil
Rights Act of 1964, as amended, the Age Discrimination in Employment Act of
1967, as amended, 29 U.S.C. § 621 etseq. (“ADEA”), or any
other federal, state or municipal ordinance relating to discrimination in
employment. Nothing contained herein shall restrict the parties’
rights to enforce the terms of this Release or the Special Retention Bonus
Agreement.
(b) To
the maximum extent permitted by law, Executive agrees that he/she has not filed,
nor will he ever file, a lawsuit asserting any claims which are released by
this
Release, or to accept any benefit from any lawsuit which might be filed by
another person or government entity based in whole or in part on any event,
act,
or omission which is the subject of this Release.
(c) This
Release specifically excludes any claim for vested benefits to which the
Executive may be entitled under any benefit plan or severance arrangement of
the
Company or any affiliate in which the Executive participates (the “Company
Plans”). The Executive’s entitlement to benefits under the
Company Plans shall be determined in accordance with the provisions of those
Company Plans. This Release specifically excludes the Executive’s
indemnification as an officer and employee of the Company or any affiliate
thereof. Nothing contained in this Release shall release the
Executive from his/her obligations, including any obligations to abide by
restrictive covenants under the Special Retention Bonus Agreement, that continue
or are to be performed following termination of employment.
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(d) Executive
represents that he is not aware of any facts or circumstances that would give
rise, based on his/her actions, to any claims or lawsuits against the Company
or
any Release.
(e) The
parties agree that this Release shall not affect the rights and responsibilities
of the US Equal Employment Opportunity Commission (hereinafter “EEOC”) to
enforce ADEA and other laws. In addition, the parties agree that this
Release shall not be used to justify interfering with the Executive’s protected
right to file a charge or participate in an investigation or proceeding
conducted by the EEOC. The parties further agree that the Executive
knowingly and voluntarily waives all rights or claims (that arose prior to
the
Executive’s execution of this Release) the Releasers may have against the
Releasees, or any of them, to receive any benefit or remedial relief (including,
but not limited to, reinstatement, back pay, front pay, damages, attorneys’
fees, experts’ fees) as a consequence of any investigation or proceeding
conducted by the EEOC.
2. The
Executive acknowledges that the Company has specifically advised him/her of
the
right to seek the advice of an attorney concerning the terms and conditions
of
this Release. The Executive further acknowledges receipt of a copy of
this Release, and has been afforded twenty-one (21) days in which to consider
the terms and conditions set forth above prior to this Release. By
executing this Release, the Executive affirmatively acknowledges sufficient
and
reasonable time to review this Release and to consult with an attorney
concerning Executive’s legal rights prior to the final execution of this
Release. Executive has carefully read this Release and fully
understands its terms. The Executive understands that he/she may
revoke this Release within seven (7) days after signing this
Release. Revocation of this Release must be made in writing and must
be received by [__________________________________________] within the time
period set forth above.
3. This
Release will be governed by and construed in accordance with the laws of the
State of [Maryland/New Jersey], without giving effect to any choice of law
or
conflicting provision or rule (whether of the State of [Maryland/New Jersey]
or
any other jurisdiction) that would cause the laws of any jurisdiction other
than
the State of [Maryland/New Jersey] to be applied. In furtherance of
the foregoing, the internal law of the State of [Maryland/New Jersey] will
control the interpretation and construction of this agreement, even if under
such jurisdiction’s choice of law or conflict of law analysis, the substantive
law of some other jurisdiction would ordinarily apply. The provisions of this
Release are severable, and if any part or portion of it is found to be
unenforceable, the other paragraphs shall remain fully valid and
enforceable. This Release shall become effective and enforceable on
the eighth day following its execution by Executive, provided he/she does not
exercise his right of revocation as described above. If Executive
fails to sign this Release or revokes his signature, this Release will be
without force or effect, and Executive shall not be entitled to the payment
under the Special Retention Bonus Agreement.
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I,
___________________________, HAVING READ THE FOREGOING RELEASE, UNDERSTANDING
ITS CONTENT AND HAVING HAD AN OPPORTUNITY TO CONSULT WITH COUNSEL OF MY CHOICE,
DO HEREBY KNOWINGLY AND VOLUNTARILY SIGN THIS AGREEMENT, THEREBY WAIVING AND
RELEASING MY CLAIMS, ON _______________________, 200_.
______________________________
Executive
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