Summary of PHH CORP - Yahoo! Finance

Entry into a Material Definitive Agreement, Change in Directors or Principal Officers, A

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

2012 Performance Restricted Stock Unit Awards

On September 27, 2012, the Human Capital and Compensation Committee (the "Committee") of the Board of the Company awarded performance-based restricted stock units ("Performance RSUs") under the Company's Amended and Restated 2005 Equity and Incentive Plan (as amended, the "2005 EIP") to certain key officers and employees of the Company, including Messrs. Glen A. Messina, David E. Tucker, George J. Kilroy and Robert B. Crowl who were granted Performance RSUs with target share amounts of 73,891, 22,068, 17,718, and 12,807, respectively.

Upon settlement of the Performance RSUs, award recipients will be entitled to receive shares of the Company's common stock based upon the extent to which the Company's average closing share price (the "Average Closing Price") for the 90-calendar-day period ending September 26, 2015 attains or exceeds a threshold level. The minimum Average Closing Price required for a recipient to earn shares pursuant to the Performance RSUs is $25, in which case, a recipient will generally be entitled to receive 33% of the target number of shares represented by the Performance RSUs awarded to such recipient. Achievement of an Average Closing Price of $30 or more will generally entitle the recipient to receive 100% of the target number of shares represented by the Performance RSUs awarded to such recipient. There is no interpolation for determining the number of shares between levels of achievement.

The Committee has the negative discretion to reduce the actual number of shares issued under the Performance RSUs based on the Committee's subjective determination (or the Committee's determination based upon a recommendation of the Company's management) of the extent to which the recipient has achieved such individual goals for the period of September 27, 2012 through September 26, 2015 (the "Target Measurement Period"), if any, as the Committee may establish or based on any other factors the Committee deems necessary or appropriate in its sole and absolute discretion. The Performance RSUs are expected to be settled, and shares earned pursuant thereto are expected to be issued, on or after September 26, 2015, and on or before December 31, 2015.

If a recipient's employment is terminated for any reason during the Target Measurement Period, other than (i) pursuant to termination by the Company without "cause" (as defined in the award) or (ii) due to the recipient's death, disability or retirement on or after age 65, then such recipient will not receive any shares under the Performance RSUs. If the recipient's employment is terminated on or before September 26, 2015, by the Company without cause or due to the recipient's death, disability or retirement on or after age 65, then the recipient will become vested in a portion of the shares that such recipient would have been otherwise eligible to receive had such person remained employed, based upon the date the termination occurs, and such awards will settle at the same time as awards for recipients who are currently employed.

If a "change in control" of the Company (as defined in the 2005 EIP) occurs during the Target Measurement Period, the recipient will be entitled to receive a number of shares of the Company's common stock based on a percentage determined by reference to the date of occurrence of the change in control and the Company's average closing share price for the 90-calendar-day period ending on the effective date of the change in control.

Performance RSUs will be forfeited by the recipient if the recipient does not sign a non-competition, non-solicitation, and other restrictive covenant agreement substantially in the form filed herewith as Exhibit 10.2 (the "Restrictive Covenant Agreement") by October 26, 2012. The Restrictive Covenant Agreement generally includes (i) a covenant not to compete with the Company during the recipient's employment and for 12 months (24 months for Messrs. Messina, Tucker and Kilroy) after termination of employment (the "Non-Compete Period"), (ii) covenants not to solicit the Company's customers, clients, or employees during the recipient's employment and for the Non-Compete Period, and (iii) a covenant protecting the Company's confidential information. The Restrictive Covenant Agreement may be limited to either the mortgage business or fleet business for recipients that are employees of the Company's mortgage subsidiary or fleet subsidiary, respectively.

The Performance RSUs are subject to a clawback policy, pursuant to which the Performance RSUs are to be forfeited and the recipient is obligated to return to the Company any shares previously issued pursuant to the award or a cash payment equal to the value of the shares at the time such shares were sold or transferred, if the Committee determines in good faith that the recipient has, among other things, violated the terms of any non-competition, non-solicitation, non-disclosure or other restrictive covenant agreement with the Company, or if within three years of exercise of an option, the recipient experiences termination for cause, engaged in conduct that causes material financial or reputational harm to the Company, provided materially inaccurate information related to publicly reported financial statements of the Company or engaged in certain other behavior detrimental to the Company.

The foregoing description of the Restrictive Covenant Agreement and the Performance RSUs does not purport to be complete and is qualified in its entirety by reference to the full text of the form of agreements filed herewith as Exhibits 10.2 and 10.3, respectively, which are incorporated herein by reference in their entirety.

2012 Non-Qualified Stock Option Awards

On September 27, 2012, the Committee also awarded non-qualified stock options (the "Options") under the 2005 EIP to the same individuals that were awarded Performance RSUs, including Messrs. Glen A. Messina, David E. Tucker, George J. Kilroy and Robert B. Crowl who were awarded 145,772, 43,537, 34,955 and 25,267 Options, respectively.

Each Option entitles the holder thereof to purchase a share of the Company's common stock upon vesting at a price equal to $20.30, which is the closing trading price of the Company's common stock on the New York Stock Exchange on the grant date of the Options. The Options become fully vested and exercisable on September 27, 2015, provided that the recipient remains continuously employed with us through such date, unless the termination of employment is by the Company without "cause" (as defined in the award) or due to the recipient's retirement on or after age 65, death, or disability. If the recipient's employment is terminated without cause, the recipient will become vested in a portion of the shares under the Option based upon the date the termination occurs. If the recipient retires from the Company on or after reaching age 65, the Option vests as to a fraction of the shares based on the number of days during the vesting period that the recipient was employed with the Company over the total number of days in the vesting period. If termination should result from the death or disability (as defined in the Company's long-term disability plan) of the recipient, then the Options shall become fully vested and exercisable on the date of such event.

If a "change in control" of the Company (as defined in the 2005 EIP) occurs before the Options are fully vested, but while the recipient is still employed by the Company, a pro rata portion of the unvested Options will become vested based upon the number of shares subject to the unvested Option multiplied by a fraction, the numerator of which is the number of calendar days from and including the grant date through

and including the date of the change of control, over the total number of days in the period of the grant date through and including September 27, 2015, unless the surviving company following the change in control either (A) continues the Options in effect or (B) replaces the Options with options to receive surviving company stock in a manner that complies with Internal Revenue Code Section 409A and the regulations thereunder and, in either case, does not extend the maximum period for vesting.

The Options are subject to a clawback policy, pursuant to which the Options are to be forfeited and the recipient is obligated to return to the Company any shares previously issued pursuant to the exercise of the Options or a cash payment equal to the value of the shares at the time such shares were sold or . . .