RELEASE AND RESTRICTIVE COVENANTS AGREEMENT
Exhibit
10.1
THIS
RELEASE AND RESTRICTIVE COVENANTS AGREEMENT (“Release” or “Agreement”) is
executed on the date specified below by ▇▇▇▇ ▇▇▇▇▇▇ (“▇▇▇▇▇▇”) and PHH
Corporation (the “Company”).
WHEREAS,
▇▇▇▇▇▇’▇ employment as a senior-level executive of the Company has terminated,
effective September 20, 2006; and
WHEREAS,
the Company has agreed to pay ▇▇▇▇▇▇ certain amounts and to provide him with
certain rights and benefits as consideration for the execution of this
Release.
NOW
THEREFORE, intending to be legally bound hereby, the Company and ▇▇▇▇▇▇ agree
as
follows:
Last
Day of Employment
▇▇▇▇▇▇’▇
employment with the Company and any of its subsidiaries and affiliates will
terminate on September 20, 2006 (the “Termination Date”), at which date ▇▇▇▇▇▇
hereby resigns and relinquishes all offices, titles and authority as an officer
of the Company or any of its subsidiaries or affiliates.
Consideration.
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1.
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In
consideration of ▇▇▇▇▇▇’▇ execution of, failure to revoke and continued
compliance with the terms and conditions of the Release, the Company
agrees to (a) pay to ▇▇▇▇▇▇ a lump sum payment equal to $1,864,800.00,
(b)
transfer to ▇▇▇▇▇▇ title of a 2006 Cadillac Escalade, VIN# ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
(the “Vehicle”); provided after the Vehicle has been transferred to
▇▇▇▇▇▇, ▇▇▇▇▇▇ shall be solely responsible for any taxes, registration,
insurance, maintenance and fuel for the Vehicle, (c) transfer to
▇▇▇▇▇▇
title to an IBM Thinkpad computer (I.D. 6782)
and its monitor, power cord and printer and (d) allow ▇▇▇▇▇▇ to
continue
to vest in and, to the extent applicable, exercise, any outstanding
options or restricted stock units that have been awarded to ▇▇▇▇▇▇
under
the 2005 PHH Corporation Equity and Incentive Plan (the “Equity Plan”),
subject to the terms and conditions of the Equity Plan and any
award
agreement, on the same basis and at the same time as such awards
would
have vested and been exercisable had ▇▇▇▇▇▇ remained in the employ
of the
Company through October 11, 2009. The payment described in clause
(a)
shall be paid, the Vehicle described in clause (b) and the computer
and
printer described in clause (c) shall be transferred, to ▇▇▇▇▇▇
no later
than ten (10) business days after the Effective Date of the Release,
provided that the transfer of the computer referred to in clause
(c) shall
not occur unless ▇▇▇▇▇▇ returns such computer to the Company before
the
beginning of
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such
10-business day period to allow the Company to erase or delete all software,
data and information from such computer. The Effective Date of this Release
shall be the tenth calendar day after the date ▇▇▇▇▇▇ signs the Release;
provided he has not earlier revoked this Release. All amounts paid and property
transferred under this Release shall be subject to applicable withholdings
for
federal state and local taxes.
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2.
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▇▇▇▇▇▇
acknowledges that: (a) the payments and benefits set forth in this
Release
constitute full settlement of all his rights arising out of his
employment
with the Company except to matters specifically preserved herein,
(b) he
has no entitlement under any other severance or similar arrangement
maintained by the Company, and (c) except as otherwise provided
specifically in this Release, the Company does not and will not
have any
other liability or obligation to ▇▇▇▇▇▇. ▇▇▇▇▇▇ further acknowledges
that,
in the absence of his execution of this Release, benefits and payments
specified in the “Consideration” section of the Release would not
otherwise be due to ▇▇▇▇▇▇.
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Release
and Covenant Not to ▇▇▇.
In
consideration for the benefits and payments specified in the Release, ▇▇▇▇▇▇
hereby fully and forever releases and discharges the Company and each of
its
subsidiaries and affiliates, and all of their predecessors and successors,
assigns, officers, directors, trustees, employees, agents and attorneys,
past
and present (“Releasees”) of and from any and all claims, demands, liens,
agreements, contracts, covenants, actions, suits, causes of action, obligations,
controversies, debts, costs, expenses, damages, judgments, orders and
liabilities, of whatever kind or nature, direct or indirect, in law, equity
or
otherwise, whether known or unknown, arising through the date of this Release,
out of ▇▇▇▇▇▇’▇ employment with the Company or any Releasee, including the
termination thereof. By this paragraph ▇▇▇▇▇▇ waives any claims which ▇▇▇▇▇▇
has
or may have against Releasees, or any of them. This includes all rights and
obligations under any federal, state or local laws or ordinances pertaining
to
employment, including but not limited to any claims for relief or causes
of
action under the Age Discrimination in Employment Act, 29 U.S.C. §621 et seq.,
or any other federal, state or local statute, ordinance or regulation regarding
discrimination in employment, all claims for wrongful discharge, all claims
that
Releasees, or any of them, dealt unfairly with ▇▇▇▇▇▇, in bad faith or in
violation of any contract or agreement, expressed or implied, that may have
existed between Releasees, or any of them, and ▇▇▇▇▇▇, and all claims against
Releasees, or any of them, for assault, battery, personal injury, emotional
distress, pain and suffering.
▇▇▇▇▇▇
expressly represents that he has not filed a lawsuit or initiated any other
administrative proceeding against Releasees, or any of them, and that he
has not
assigned any claim against the Releasees, or any of them, ▇▇▇▇▇▇ further
promises not to initiate a lawsuit or to bring any other claim against
Releasees, or any of them, arising out of or in any way related to ▇▇▇▇▇▇’▇
employment by the Company or any Releasee, including the termination of that
employment. This Release will not prevent ▇▇▇▇▇▇ from filing a
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charge
with the Equal Employment Opportunity Commission (or similar state agency)
or
participating in any investigation conducted by the Equal Employment Opportunity
Commission (or similar state agency); provided, however, that any claims
by
▇▇▇▇▇▇ for personal relief in connection with such a charge or investigation
(such as reinstatement or monetary damages) would be barred by this
Release.
The
foregoing will not be deemed to release the Company from any of the following
claims, entitlements or rights of ▇▇▇▇▇▇ for or to:
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1.
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Claims
or actions brought, in good faith, solely to enforce or clarify
the
promises, rights, entitlements, obligations, and benefits provided
in this
Release, including but not limited to those provided under the
“Consideration” section of this
Agreement;
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2.
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Vested
benefits under retirement plans sponsored by the Company in which
▇▇▇▇▇▇
is a participant, based on services performed prior to the Termination
Date;
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3.
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Rights
to continue health care coverage pursuant to the Consolidated Omnibus
Reconciliation Act of 1985, at his own expense, under the Company’s group
health plan upon a qualifying event, e.g., termination of employment;
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4.
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Rights
to convert coverage under an existing life insurance policy provided
by
the Company, subject to the conversion rights of such
policy;
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5.
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Coverage,
if any, under any policy of liability or directors and officers
liability
insurance for matters subject to said policies for activities arising
out
of or in any way related to ▇▇▇▇▇▇’▇ employment prior to the Termination
Date;
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6.
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Any
right to indemnification or cost of defense from or by the Company
pursuant to the Company’s by-laws or charter, or duly adopted resolution
of the Company’s Board of Directors for activities and actions by ▇▇▇▇▇▇
as an agent, officer, or employee of the Company, prior to the
Termination
Date;
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7.
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Earned
wages and compensation, accrued vacation and accrued fringe benefits,
or
reimbursement for authorized expenses acquired or incurred before
the
Termination Date, including any bonus which may become due to ▇▇▇▇▇▇
under
the Company’s 2005 Management Incentive Plan. Such bonus will be paid to
▇▇▇▇▇▇ if and when the bonus is paid to the Company’s executive officers,
at a level consistent with ▇▇▇▇▇▇’▇ former duties as Chief Financial
Officer of the Company and subject to the terms of the 2005 Management
Incentive Plan; and
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3
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8.
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Any
counterclaims in connection with a lawsuit or administrative proceeding
in
which the Company, its successors, assigns or subrogees seek legal
or
equitable relief from ▇▇▇▇▇▇ provided
such counterclaim (i) arises out of the transaction or occurrence
that is
the subject matter of the claim raised by the Company in such lawsuit
or
proceeding, (ii) does not require for adjudication the joinder
or presence
of third parties, and (iii) does not relate to or arise out of
the
termination of ▇▇▇▇▇▇’▇ employment or involve any claim for compensation
or benefits for services rendered to the
Company.
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Covenants
Not to Unfairly Compete
In
further consideration for the benefits and payments set forth in this Release,
▇▇▇▇▇▇ agrees that, during the Restriction Period (as defined below), ▇▇▇▇▇▇
shall not unfairly compete with the Company or any of its subsidiaries or
affiliates (the “PHH Group”), as set forth below:
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1.
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▇▇▇▇▇▇
agrees that as part of his promise not to unfairly compete with
the PHH
Group, ▇▇▇▇▇▇, directly or indirectly, as an individual on ▇▇▇▇▇▇’▇ own
account, or as an independent contractor, employee, consultant,
agent,
partner, member, joint venturer or otherwise, shall not provide
any
service or assistance, in any capacity or function similar to the
capacity
or function in which ▇▇▇▇▇▇ provided services or assistance to
the PHH
Group to: *CONFIDENTIAL
and any successor entity of an entity listed in this section 1
of
“Covenants Not to Unfairly Compete” that is created by merger,
consolidation or any other similar
transaction.
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2.
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▇▇▇▇▇▇
further agrees that as part of his promise not to unfairly compete
with
the PHH Group, ▇▇▇▇▇▇, directly or indirectly, as an individual
on
▇▇▇▇▇▇’▇ own account, or as an independent contractor, employee,
consultant, agent,
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___________________
*The
term
“Confidential” indicates material that has been omitted and for which
confidential treatment has been requested. All such omitted material has
been
filed with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.
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partner,
member, joint venturer or otherwise, shall not solicit, induce or encourage,
or
permit any person or entity to solicit, encourage, induce or attempt to induce
on ▇▇▇▇▇▇’▇ behalf:
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(a)
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any
person who was employed by the PHH Group on the Effective Date
of this
Release, and/or any person who was employed by the PHH Group at
any time
during the twelve-month period immediately preceding the Effective
Date of
this Release, to terminate their employment with the PHH Group,
or in any
way interfere with the relationship between the PHH Group and any
employee
thereof; or
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(b)
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any
customer, client, supplier, licensee or other person or entity
that does
business with the PHH Group to cease doing business with the PHH
Group, or
in any way interfere with the relationship between any such persons
or
entities and the PHH Group; and
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3.
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▇▇▇▇▇▇
further agrees that as part of his promise not to unfairly compete
with
the PHH Group, ▇▇▇▇▇▇, directly or indirectly, as an individual
on
▇▇▇▇▇▇’▇ own account, or as an independent contractor, employee,
consultant, agent, partner, member, joint venturer or otherwise,
shall not
call on, solicit or service any person or entity who was a customer,
client, licensor or licensee of the PHH Group at any time during
the
twelve-month period immediately preceding the Effective Date of
this
Release for any purpose which directly or indirectly competes with
the
business of the PHH Group.
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▇▇▇▇▇▇
agrees and acknowledges that the promises and covenants not to unfairly compete
set forth above each have a unique, very substantial and immeasurable value
to
the PHH Group, that the PHH Group is engaged in a highly competitive industry,
and that ▇▇▇▇▇▇ is receiving significant consideration in exchange for these
promises and covenants. ▇▇▇▇▇▇ acknowledges that the promises and covenants
set
forth above are necessary for the reasonable and proper protection of the
PHH
Group’s legitimate business interests; and that each and every promise and
covenant is reasonable with respect to activities restricted, geographic
scope
and length of time.
▇▇▇▇▇▇
agrees and acknowledges that in the event of a breach or threatened breach
by
▇▇▇▇▇▇ of one or more of these covenants and promises, the PHH Group will
suffer
irreparable harm that is not compensable solely by damages. ▇▇▇▇▇▇ agrees
that
under such circumstances, the PHH Group shall be entitled, upon application
to a
court of competent jurisdiction, to obtain injunctive relief to enforce these
promises and covenants.
The
“Restriction Period” for purposes of these “Covenants Not to Unfairly Compete”
shall in all events be five (5) years from the Effective Date of this Agreement,
provided, however, that solely for purposes of section 1 of these “Covenants Not
to Unfairly Compete” the Restriction Period with respect to only the following
companies
5
shall
be
three (3) years instead of five (5) years: *CONFIDENTIAL
and any
successor entity of an entity listed in this paragraph that is created by
merger, consolidation or any other similar transaction.
Confidential
Information
▇▇▇▇▇▇
acknowledges that as part of his employment with the PHH Group, he had access
to
information that was not generally disclosed or made available to the public.
▇▇▇▇▇▇ recognizes that in order to guard the legitimate interests of the
PHH
Group, it is necessary for it to protect all confidential information. ▇▇▇▇▇▇
agrees to keep secret all non-public, confidential and/or proprietary
information, matters and materials of the PHH Group, and personal confidential
or otherwise proprietary information regarding the PHH Group’s employees,
executives, directors or consultants affiliated with the PHH Group, including,
but not limited to, documents, materials or information regarding, concerning
or
related to the PHH Group’s research and development, its business relationships,
corporate structure, financial information, financial dealings, fees, charges,
personnel, methods, trade secrets, systems, procedures, manuals, confidential
reports, clients or potential clients, financial information, business and
strategic plans, proprietary information regarding its financial or other
business arrangements with the executives, sales representatives, editors
and
other professionals with which it works, software programs and codes, access
codes, and other similar materials or information, as well as all other
information relating to the business of the PHH Group which is not generally
known to the public or within the fleet management and/or mortgage industries
or
any other industry or trade in which the PHH Group competes (collectively,
“Confidential Information”), to which ▇▇▇▇▇▇ has had or may have access and
shall not use or disclose such Confidential Information to any person except
(a)
to the extent required by applicable law, (b) to his personal advisors, to
the
extent such advisors agree to be bound by this provision, or (c) to the minimum
necessary to enforce this Release. This obligation is understood to be in
addition to any agreements ▇▇▇▇▇▇ may have signed with the PHH Group or any
of
its subsidiaries or affiliates concerning confidentiality and non-disclosure,
non-competition, non-solicitation, and assignment of inventions or other
intellectual property developments, which agreements will remain in full
force
and effect. This section of the Release is not subject to the five-year period
provided under the “Covenants Not to Unfairly Compete” section
above.
Non-Disparagement.
▇▇▇▇▇▇
will not disparage or defame, through verbal or written statements or otherwise,
the PHH Group or any of its members, directors, officers, agents or employees
or
otherwise take any action which could reasonably be expected to adversely
affect
the reputation, business practices, good will, products and services of the
PHH
Group or the personal or professional reputation of any of the PHH Group’s
members, directors, officers, agents or employees. This section of the Release
is not subject to the five-year period provided under the “Covenants Not to
Unfairly Compete” section above.
_____________________
*The
term
“Confidential” indicates material that has been omitted and for which
confidential treatment has been requested. All such omitted material has
been
filed with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.
6
Cooperation.
▇▇▇▇▇▇
further agrees that, subject to reimbursement of his reasonable expenses,
he
will cooperate fully with the Company and any of its subsidiaries and affiliates
and their counsel with respect to any matter (including any pending or future
litigation, investigations, or governmental proceedings) which relates to
matters with which ▇▇▇▇▇▇ was involved during his employment with the Company.
▇▇▇▇▇▇ will render such cooperation in a timely manner upon reasonable notice
from the Company.
Rescission
Right.
▇▇▇▇▇▇
expressly acknowledges and recites that (a) he has read and understands the
terms of this Release in its entirety, (b) he has entered into this Release
knowingly and voluntarily, without any duress or coercion; (c) he has been
advised orally and is hereby advised in writing to consult with an attorney
with
respect to this Release before signing it; (d) he was provided twenty-one
(21)
calendar days after the receipt of the Release to consider its terms before
signing it; and (e) he has seven (7) calendar days from the date of signing
to
terminate and revoke this Release in which case this Release will be
unenforceable, null and void. ▇▇▇▇▇▇ may revoke this Release during those
seven
(7) days by providing written notice of revocation to the Company. The
revocation must be delivered to the President of PHH Corporation, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, Mail Stop LGL, ▇▇. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Challenge.
If
▇▇▇▇▇▇
violates or successfully challenges the enforceability of any provisions
of this
Release, no further payments, rights or benefits provided under the
“Consideration” section this Release will be due to ▇▇▇▇▇▇. However, ▇▇▇▇▇▇ may
seek clarification from the Company of his rights and obligations under this
Release, and, if a dispute remains after seeking clarification, ▇▇▇▇▇▇ may
raise
a dispute regarding his rights under this Release pursuant to the Arbitration
provisions of this Release.
Arbitration.
Any
dispute arising under this Release will be resolved by arbitration administered
exclusively in Baltimore, Maryland by JAMS, pursuant to its then-prevailing
Employment Arbitration Rules & Procedures, before an arbitrator or
arbitrators whose decision shall be final, binding and conclusive on the
parties, and judgment on the award may be entered in any court having
jurisdiction. The Company shall bear any and all costs of the arbitration
process, excluding any attorneys’ fees incurred by ▇▇▇▇▇▇ with regard to such
arbitration. ▇▇▇▇▇▇ and the Company further acknowledge and agree that, due
to
the nature of the confidential information, trade secrets, and intellectual
property belonging to the PHH Group to which ▇▇▇▇▇▇ has been
7
given
access, and the likelihood of significant harm that the PHH Group would suffer
in the event that such information was disclosed to third parties, nothing
in
this paragraph shall preclude the Company or any other member of the PHH
Group
from seeking injunctive relief to prevent ▇▇▇▇▇▇ from violating, or threatening
to violate, the terms under the “Covenants Not to Unfairly Compete,”
“Confidential Information” and “Non-Disparagement” sections of this
Release.
Miscellaneous.
No
Admission of Liability.
This
Release is not to be construed as an admission of any violation of any federal,
state or local statute, ordinance or regulation or of any duty owed by the
Company or any other person to ▇▇▇▇▇▇. There have been no such violations,
and
the Company specifically denies any such violations.
Absence
of Reliance.
▇▇▇▇▇▇
acknowledges that in agreeing to this Release, he has not relied in any way
upon
representations or statements of the Company other than those representations
or
statements set forth in this Release.
No
Reinstatement.
▇▇▇▇▇▇
agrees that he will not apply for reinstatement with the Company or any other
member of the PHH Group or seek in any way to be reinstated, re-employed
or
hired by the Company or any other member of the PHH Group in the
future.
Section
Headings.
The
section headings are solely for convenience of reference and shall not in
any
way affect the interpretation of this Release.
Notice:
All
notices, requests, demands and other communications made or given in connection
with this Release shall be in writing and shall be deemed to have been duly
given (a) if hand delivered, at the same time delivered, or (b) at the time
shown on the return receipt if mailed in a certified postage prepaid envelope
(return receipt requested) addressed to the respective parties as
follows:
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If
to PHH Corporation:
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PHH
Corporation
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c/o
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
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▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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If
to ▇▇▇▇ ▇▇▇▇▇▇:
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▇▇.
▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
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or
to
such other address as the party to whom notice is to be given may have
previously furnished to the other party in writing in the manner set forth
above.
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409A
Compliance:
Notwithstanding anything in this Release to the contrary, in no event shall
the
Company be obligated to make any payment or distribution to ▇▇▇▇▇▇ of any
amount
that constitutes nonqualified deferred compensation within the meaning of
Internal Revenue Code section 409A (“Code section 409A”) earlier than the
earliest permissible date under Code section 409A that such amount could
be paid
or distributed without additional taxes or interest being imposed under Code
section 409A(a)(1)(B)(i).
Successors
and Assigns.
This
Release will inure to the benefit of and be binding upon the Company and
▇▇▇▇▇▇
and their respective successors, executors, administrators and heirs. ▇▇▇▇▇▇
may
not make any assignment of this Release or any interest herein, by operation
of
law or otherwise. The Company may assign this Release to any successor to
all or
substantially all of its assets and business by means of liquidation,
dissolution, merger, consolidation, transfer of assets, or
otherwise.
Severability.
Whenever possible, each provision of this Release will be interpreted in
such
manner as to be effective and valid under applicable law. However, if any
provision of this Release is held to be invalid, illegal or unenforceable
in any
respect, such invalidity, illegality or unenforceability will not affect
any
other provision, and this Release will be reformed, construed and enforced
as
though the invalid, illegal or unenforceable provision had never been herein
contained.
Entire
Agreement; Amendments.
Except
as otherwise provided herein, this Release contains the entire agreement
and
understanding of the parties hereto relating to the subject matter hereof,
and
merges and supersedes all prior and contemporaneous discussions, agreements
and
understandings of every nature relating to the subject matter hereof. This
Release may not be changed or modified, except by an agreement in writing
signed
by each of the parties hereto.
Governing
Law.
This
Release will be governed by, and enforced in accordance with, the laws of
the
State of Maryland without regard to the application of the principles of
conflicts of laws.
Counterparts
and Facsimiles.
This
Release may be executed, including execution by facsimile signature, in multiple
counterparts, each of which will be deemed an original, and all of which
together will be deemed to be one and the same instrument.
[signature
page to follow]
9
IN
WITNESS WHEREOF, ▇▇▇▇▇▇ and the Company have executed this Release as of
the
date first above written.
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Executed
this 20th
day of September, 2006
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By:/s/
▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇
▇▇▇▇▇▇
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PHH
CORPORATION
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By:
/s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Date:9/21/06
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10