Item
5.02
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Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
|
(b)(c)(d)
On April 19, 2018, Ocwen Financial Corporation (“Ocwen”) announced that its Board of Directors (the “Board”)
has determined to appoint Glen Messina as President and Chief Executive Officer (“CEO”) and director of Ocwen, effective
as of the date of the previously announced merger with PHH Corporation (“PHH”) (the “Merger Date”). Mr.
Messina will succeed Ronald M. Faris, who is retiring from his position as President and CEO effective June 30, 2018 and from
Ocwen’s Board as of Ocwen’s 2018 annual meeting of shareholders, having determined not to stand for reelection.
Biographical
Background
Mr.
Messina, age 56, most recently served as the President and Chief Executive Officer of PHH from January 2012 to June 2017 and Chief
Operating Officer of PHH from July 2011 to December 2011. Mr. Messina also served as a director of PHH from January 2012 to June
2017 and as a consultant to PHH through March 2018. Prior to joining PHH, Mr. Messina spent 17 years at General Electric Company
(“GE”), most recently as Chief Executive Officer of GE Chemical and Monitoring Solutions, a global water and process
specialty chemicals services business, from 2008 until July 2011.
Offer
Letter with Mr. Messina
On
April 17, 2018, Ocwen entered into an offer letter with Mr. Messina (the “Offer Letter”). Under the Offer Letter,
effective as of the Merger Date, Mr. Messina’s compensation will consist of an annual base salary of $900,000, an annual
target incentive of 150% of base salary and an annual long-term incentive grant with a grant date fair value equal to 350% of
base salary, which will be in the form of restricted stock units for 2018. On the Merger Date, Mr. Messina also will be granted
a sign-on award of options with a grant date fair value equal to $1,100,000 and a sign-on award of restricted stock units with
a grant date fair value equal to $900,000. Under the Offer Letter, Mr. Messina will also be eligible for relocation benefits in
connection with his relocation to Florida. For the period from May 1, 2018 through the Merger Date, Mr. Messina will be paid $240,000
for each month, up to a maximum of $1,200,000.
Under
the Offer Letter, in the event of Mr. Messina’s termination without “cause” or resignation for “good reason”
(each as defined in the Offer Letter) following the Merger Date, he will be entitled to receive a lump sum termination payment
in an amount equal to the sum of his then-current base salary plus annual target incentive, the estimated cost of 18 months’
COBRA benefits, a pro rata portion of his annual bonus payment based on actual achievement of Ocwen performance objectives and
payment of any unpaid prior year bonus. In addition, in the event of Mr. Messina’s termination without “cause,”
resignation for “good reason” or termination due to death or “disability,” he will be entitled to accelerated
vesting of his sign-on option award and sign-on restricted stock unit award. In the event that the Merger Date does not occur,
Mr. Messina will not be required to repay any amounts previously paid to him and the Offer Letter will terminate.
The
foregoing summary is qualified in its entirety by reference to the Offer Letter, which is attached as Exhibit 10.1 to this Current
Report on Form 8-K, and which is incorporated by reference.
Agreement
with Mr. Faris
Ocwen
has entered into a release and restrictive covenants agreement (the “Transition Agreement”) with Mr. Faris, dated
April 17, 2018. Under the Transition Agreement, Mr. Faris will be subject to two-year non-competition, three-year non-intervention
and three-year non-solicitation provisions and will render transition services to Ocwen for a period of six months. The Transition
Agreement provides for a lump sum payment of $1,750,000 in respect of the restrictive covenant and consulting obligations, a lump
sum payment of $1,050,000 in respect of Mr. Faris’ 2018 annual short-term incentive opportunity, continued participation
in Ocwen’s medical plans for 10 years (to the extent permitted by the plan(s)) and continued vesting of his outstanding
restricted stock unit and performance stock unit awards in accordance with the terms thereof applicable in the event of retirement.
In
the event the Board determines it appropriate, the Board may appoint an interim CEO on or before June 30, 2018 to serve until
Mr. Messina assumes his role.
The
foregoing summary of the Transition Agreement is qualified in its entirety by reference to the Transition Agreement, which is
attached as Exhibit 10.2 to this Current Report on Form 8-K, and which is incorporated by reference.