Executive Deferred Compensation Plan - PHH CORP - 7-26-1996 by PHH-Agreements

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									AMENDMENT NO. 2 TO PHH CORPORATION EXECUTIVE DEFERRED COMPENSATION PLAN THIS AMENDMENT NO. 2 is dated as of this February 26, 1996, to the PHH Corporation Executive Deferred Compensation Plan approved by the Board of Directors on February 28, 1994, and as amended pursuant to Amendment No.1 dated as of April 10, 1995 (the "Plan"). PREAMBLE The Compensation Committee of the Board of Directors of PHH Corporation (the "Corporation") desires that the Plan be amended to provide for the revocation of Optional Deferral Elections and Matching Contributions in certain events. Accordingly, the Plan is hereby amended as follows: 1. Section 1. (Definitions) is amended as follows: a. The following term shall be added after the term "Board of Directors": (c) "Change in Control" shall be deemed to have taken place on the date of the earlier to occur of either of the following events: (i) a third person, including a "group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, becomes the beneficial owner of shares of the Corporation having 20% or more of the total number of votes that may be cast for the election of directors of the Corporation; or (ii) as the result of, or in connection with, any cash tender or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing transactions (a "Transaction"), the persons who were directors of the Corporation before the Transaction shall cease to constitute a majority of the Board of Directors of the Corporation or any successor to the Corporation. b. The following term shall be added after the term "ERISA": (k) "Financial Trigger" shall be deemed to have occurred if the Corporation's Net Income for any fiscal quarter is less than 50% of the Corporation's Net Income for the same fiscal quarter for the immediately preceding year. The term "Net Income" shall mean the consolidated net income of the Corporation and its consolidated subsidiaries, determined on the basis of generally accepted accounting principles, excluding extraordinary gains and gains from discontinued operations but including extraordinary losses and losses from discontinued operations. The Corporation's Net Income for the fiscal quarter in question shall be determined by reference to the Corporation's quarterly report on Form 10-Q as filed with the Securities and Exchange Commission for that fiscal quarter and shall be deemed to have occurred at the time such filing is made.

c. The following term shall be added after the term "Plan Year": (r) "Potential Change in Control" shall be deemed to have taken place if (i) any third person commences a tender or exchange offer (other than a tender or exchange offer which, if consummated, would not result in a change of control) for twenty percent (20%) or more of the then outstanding shares of common stock or combined voting power of the Corporation's then outstanding voting securities; (ii) the Corporation enters into an agreement, the consummation of which would result in the occurrence of a Change in Control; (iii) any person (including the Corporation) publicly announces an intention to take or to consider taking actions which if consummated would constitute a Change in Control; or (iv) the Board of Directors of the Corporation adopts a resolution to the effect that, for purposes of this Plan, a Change in Control is imminent. d. The terms listed in Section 1. shall be re-lettered as appropriate. 2. Section 3. (Participation) is hereby amended as follows:

c. The following term shall be added after the term "Plan Year": (r) "Potential Change in Control" shall be deemed to have taken place if (i) any third person commences a tender or exchange offer (other than a tender or exchange offer which, if consummated, would not result in a change of control) for twenty percent (20%) or more of the then outstanding shares of common stock or combined voting power of the Corporation's then outstanding voting securities; (ii) the Corporation enters into an agreement, the consummation of which would result in the occurrence of a Change in Control; (iii) any person (including the Corporation) publicly announces an intention to take or to consider taking actions which if consummated would constitute a Change in Control; or (iv) the Board of Directors of the Corporation adopts a resolution to the effect that, for purposes of this Plan, a Change in Control is imminent. d. The terms listed in Section 1. shall be re-lettered as appropriate. 2. Section 3. (Participation) is hereby amended as follows: a. In subsection 3(b) (Termination), the word "or" prior to subclause (iii) in the first sentence of that subsection shall be deleted and the following inserted prior to the period at the end of that sentence: "; or (iv) immediately upon a Change in Control, Potential Change in Control or Financial Trigger pursuant to Section 4(e) and Section 5(c) hereof." b. The following shall be added at the end of that Section: "(c) Re-Election. A Participant whose Optional Deferral Election has been revoked under Section 4(e) herein during any Plan Year may make an Optional Deferral Election for any subsequent Plan Year by following the procedure set forth in Section 4(b) herein. The Participant shall be entitled to have credited to his Account the amount of any matching contributions on such new optional deferrals to which he or she is entitled pursuant to Sections 5(a) and 5(b) herein." 3. Section 4. (Optional Deferrals) is amended by: a. inserting the words: "Except as provided in Section 4(e)," at the beginning of the first sentence of Section 4(c) (Optional Deferral Election Irrevocable). b. inserting the following at the end of that Section: "(e) Revocation of Optional Deferral Election. In the event of a Change in Control, a Potential Change in Control, or a Financial Trigger, all Optional Deferral Elections then in effect shall be automatically revoked for the remainder of the Plan Year, and the amount of Compensation to be otherwise deferred in accordance with such Optional Deferral Election shall be payable directly to the Participant as if no Optional Deferral Election were in effect." 2

4. Section 5. (Matching Contributions Relating to Employee Investment Plan) is amended as follows: (a) In Subsection (b) (Vesting), the following sentence shall be inserted at the end of that subsection: "Notwithstanding the above, upon a Change in Control a Participant shall become vested immediately in the portion of his or her Account attributable to matching contributions." (b) The following subsection shall be inserted at the end of that Section: "(c) Cessation of Matching Contributions. Notwithstanding anything to the contrary herein, in the event of a Change in Control, any matching contribution to be credited to a Participant's Account subsequent to such event shall be automatically withheld, and a Participant will receive additional compensation from the Corporation equal to the amount of the matching contribution to be otherwise be credited to his or her Account in accordance with this Section 5."

4. Section 5. (Matching Contributions Relating to Employee Investment Plan) is amended as follows: (a) In Subsection (b) (Vesting), the following sentence shall be inserted at the end of that subsection: "Notwithstanding the above, upon a Change in Control a Participant shall become vested immediately in the portion of his or her Account attributable to matching contributions." (b) The following subsection shall be inserted at the end of that Section: "(c) Cessation of Matching Contributions. Notwithstanding anything to the contrary herein, in the event of a Change in Control, any matching contribution to be credited to a Participant's Account subsequent to such event shall be automatically withheld, and a Participant will receive additional compensation from the Corporation equal to the amount of the matching contribution to be otherwise be credited to his or her Account in accordance with this Section 5." 5. Section 10 (Forfeiture of Right to Matching Contributions) is hereby amended as follows: (a) The parenthetical: "(except that this Section shall not apply in the event of a Change in Control, Potential Change in Control or Financial Trigger as provided in Section 5(b) and 5(c) herein)," shall be inserted after the words "Notwithstanding any other provision of this Plan" in the first line of that Section. 6. Miscellaneous. 6.1 Except as otherwise expressly provided herein, the terms of the Plan shall remain in full force and effect. 6.2 Capitalized terms not otherwise defined herein shall have the same meanings as set forth in the Plan. This Amendment No. 2 to the Executive Deferred Compensation Plan is hereby executed as of the date first above written pursuant to the approval of the Corporation's Board of Directors on February 26, 1996. PHH CORPORATION
By: /s/ Robert D. Kunisch ----------------------Robert D. Kunisch Chief Executive Officer and President

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PHH CORPORATION CORPORATE LONG-TERM INCENTIVE PLAN FY 1997-1999 The purpose of this plan is to encourage the achievement of the long-term objectives of PHH Corporation and its shareholders, by providing incentive opportunities to designated senior key executives. DEFINITIONS A) The term "Company" shall mean PHH Corporation, or its successor in interest. B) The "term" shall mean the term of this plan which shall be the three fiscal years, beginning May 1, 1996 through April 30, 1999. C) "Return on Beginning Equity (ROBE)" shall mean the Company's annual net income after taxes, after giving effect for any incentive paid, computed in accordance with generally accepted accounting principles, divided by the beginning shareholders' equity for the fiscal year. The performance measure for the plan shall be the average of the ROBE results for each of the three fiscal years in the plan. Determination of the performance measure

PHH CORPORATION CORPORATE LONG-TERM INCENTIVE PLAN FY 1997-1999 The purpose of this plan is to encourage the achievement of the long-term objectives of PHH Corporation and its shareholders, by providing incentive opportunities to designated senior key executives. DEFINITIONS A) The term "Company" shall mean PHH Corporation, or its successor in interest. B) The "term" shall mean the term of this plan which shall be the three fiscal years, beginning May 1, 1996 through April 30, 1999. C) "Return on Beginning Equity (ROBE)" shall mean the Company's annual net income after taxes, after giving effect for any incentive paid, computed in accordance with generally accepted accounting principles, divided by the beginning shareholders' equity for the fiscal year. The performance measure for the plan shall be the average of the ROBE results for each of the three fiscal years in the plan. Determination of the performance measure results shall be made by the Committee following the close of fiscal year 1999. D) The "Board of Directors" shall mean the Board of Directors of PHH Corporation. E) The "Committee" shall mean the Compensation Committee of the Board of Directors. F) The "Chairman & CEO" shall mean the Chairman & Chief Executive Officer of PHH Corporation. PARTICIPATION AND EMPLOYMENT STATUS Participation in the plan is limited to key senior executives of the Company specifically designated by the Chairman & CEO and approved by the Committee. None of the members of the Committee may participate in the plan. Initially designated participants must be actively employed as of May 1, 1996 to be eligible to receive any incentive under the plan. Except as otherwise determined by the Committee pursuant to the plan, additional participants may be designated prior to May 1, 1997, to be considered for a prorated award, based on their service during the plan term. Incentive targets for the designated participants shall be determined by the Committee at the beginning of the plan term. No participant has any vested rights or interest under the plan and must be actively employed as of April 30, 1999 or have terminated employment by reason of retirement, death, or disability (as determined by the Committee) during the term to be eligible for any incentive payment under the plan. In the discretion of the Committee, awards may be granted in relation to a non qualified stock option granted under the Amended and Restated Stock Compensation Plan of 1990 of the Company ("Stock Compensation Plan"), in which event, at the end of the term, a participant shall make a written election to receive proportionate payment of 0% to 100% of the cash award or to retain 0% to 100% of the related non qualified stock option. Cash awards granted in tandem to non qualified stock options shall be canceled proportionately, to the extent determined in the discretion of the Committee, (i) if 0% to 100% of the related non qualified stock option is exercised prior to the end of the term or (ii) if at the end of the term, the participant elects to retain 0% to 100% the related non qualified stock option. 1

FY1997-1999 CORPORATE LONG-TERM INCENTIVE PLAN Page 2 COMPANY PERFORMANCE MEASUREMENT Exhibit A sets forth the ROBE results which the Committee determines must be obtained in order for the corresponding percentage of the target incentive to be payable to participants. The performance measure is the average of the ROBE results for each of the three fiscal years of the term. In determining whether ROBE targets have been met, the Committee may take into account one time charges or other factors, if any, as it deems

FY1997-1999 CORPORATE LONG-TERM INCENTIVE PLAN Page 2 COMPANY PERFORMANCE MEASUREMENT Exhibit A sets forth the ROBE results which the Committee determines must be obtained in order for the corresponding percentage of the target incentive to be payable to participants. The performance measure is the average of the ROBE results for each of the three fiscal years of the term. In determining whether ROBE targets have been met, the Committee may take into account one time charges or other factors, if any, as it deems relevant. The aggregate incentive amounts which may be paid for the designated participants under the plan are set forth on the Exhibit A, including the maximum amounts that may be paid for the designated participants under the Cash award provisions of the plan. Failure to meet the minimum ROBE results will result in no payment to participants but may result in the retention and future exercise of the tandem stock option grant. INDIVIDUAL INCENTIVE PAYMENTS Payments of individual incentive amounts, if any, will be made following the determination of the ROBE results by the Committee. At the determination of the Committee, payment may be made in cash and/or in shares of Common Stock of the company awarded pursuant to the Stock Compensation Plan. A participant may elect to defer receipt of all or a portion of any cash incentive payment as provided in the form of Deferral Election approved from time to time by the Committee. Such deferral election must be made by the participant in accordance with applicable deferred compensation plans established by the Company and in a manner consistent with federal, state, and local tax laws. ADMINISTRATION The plan, adopted by the Committee, shall be administered by the Committee. The Committee is authorized to promulgate rules relating to the administration of the plan and to make determinations with respect thereto. The Company shall have the right to deduct from awards paid under the plan all federal, state, local, and other taxes required by law to be withheld with respect to such payments. Where a "change of control" (as defined in the Company's Stock Compensation Plan) occurs during the term, the Company shall pay to participants an incentive under the plan based on ROBE results up until such date of change of control as if such ROBE result constituted the three-year average ROBE result provided for herein multiplied by the fraction, the denominator of which shall be thirty-six (36) months and the numerator of which shall be the number of full months elapsed from the beginning of the term up until such date. If a change in control occurs after the term, all incentive payments which the participant had elected to defer under the terms of any unfunded deferred compensation plan established by the company shall be either contributed in full by the Company under any such deferred compensation plan trust or, if no such trust has been established, shall be paid in full by the Company as soon as practicable following the change of control. In case of separations from the Company for the following reasons, the following provisions will apply: Retirement, Death or Disability - Awards will be prorated based on the nearest full quarter of the fiscal year of active employment. The incentive award payment will be made as soon as practicable after the event and will assume that the three year average plan target has been achieved.. Disability will be defined in the same manner as provided in qualified plan provisions in effect at the time of disability. Voluntary Resignation - Awards will be forfeited when executives voluntarily resign before the end of the term. 2

FY1997-1999 CORPORATE LONG-TERM INCENTIVE PLAN Page 3 Termination or other Resignation - Awards, if any, will be made as determined by the Committee in its sole discretion.

FY1997-1999 CORPORATE LONG-TERM INCENTIVE PLAN Page 3 Termination or other Resignation - Awards, if any, will be made as determined by the Committee in its sole discretion. No member of the Board of Directors or the Committee, nor any officer, employee or agent of the Company shall have any liability to any person based on or arising out of the plan, absent bad faith or willful misconduct. Nothing contained in the plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any participant, beneficiary, legal representative or any other person. To the extent that any person acquires a right to receive payments from the Company under the plan, such right shall be no greater than the right of an unsecured general creditor of the Company. All payments to be made hereunder shall be paid from the general funds of the Company and no special or separate fund shall be established and no segregation of assets shall be made to assure payment from such amounts. REVISION OR CANCELLATION OF THE PLAN Nothing in the plan shall be deemed to create any rights of participation of any employee. The Committee shall have the full authority in its sole discretion to unilaterally modify, terminate or cancel the plan, in whole or in part, or with respect to any designated participant, at any time without liability to any participant. NON-TRANSFERABILITY A participant may not assign, sell, encumber, transfer or otherwise dispose of any rights or interests under the plan and any attempted disposition shall be null and void. 3

PHH CORPORATION CORPORATE INCENTIVE PLAN FY 1997 The purpose of this plan is to encourage the achievement of the annual business objectives of PHH Corporation and its shareholders, by providing incentive opportunities to designated key executives. DEFINITIONS A) The "Company" shall mean PHH Corporation, or its successor in interest. B) The "term" shall mean the term of this plan which shall be the fiscal year beginning May 1, 1996 through April 30, 1997. C) "Return on beginning equity (ROBE)" shall mean the Company's annual net income after taxes, after giving effect for any incentive to be paid, computed in accordance with generally accepted accounting principles, divided by the beginning shareholders' equity for the fiscal year. The performance measure for the plan shall be the ROBE result for the fiscal year in the plan. Determination of the performance measure results shall be made by the Committee following the close of fiscal 1997. D) The "Committee" shall mean the Compensation Committee of the Board of Directors. E) "Chairman & CEO" shall mean the Chairman & Chief Executive Officer of PHH Corporation. F) "Salary" shall mean the annual base salary paid during the term. G) "Target Incentive" shall be fixed at that level of ROBE result determined by the Committee as constituting 100% of incentive payout and shall be expressed as a percent of salary.

PHH CORPORATION CORPORATE INCENTIVE PLAN FY 1997 The purpose of this plan is to encourage the achievement of the annual business objectives of PHH Corporation and its shareholders, by providing incentive opportunities to designated key executives. DEFINITIONS A) The "Company" shall mean PHH Corporation, or its successor in interest. B) The "term" shall mean the term of this plan which shall be the fiscal year beginning May 1, 1996 through April 30, 1997. C) "Return on beginning equity (ROBE)" shall mean the Company's annual net income after taxes, after giving effect for any incentive to be paid, computed in accordance with generally accepted accounting principles, divided by the beginning shareholders' equity for the fiscal year. The performance measure for the plan shall be the ROBE result for the fiscal year in the plan. Determination of the performance measure results shall be made by the Committee following the close of fiscal 1997. D) The "Committee" shall mean the Compensation Committee of the Board of Directors. E) "Chairman & CEO" shall mean the Chairman & Chief Executive Officer of PHH Corporation. F) "Salary" shall mean the annual base salary paid during the term. G) "Target Incentive" shall be fixed at that level of ROBE result determined by the Committee as constituting 100% of incentive payout and shall be expressed as a percent of salary. PARTICIPATION Participation in the plan is limited to key executives of the Company specifically designated by the Chairman & CEO and approved by the Committee. EMPLOYMENT STATUS AND GRADE CHANGES Any Company key executive designated as of May 1, 1996 as a plan participant and actively employed on or before February 1, 1997 is eligible to participate in this program. Participants who are hired or transferred during the plan year are eligible to be considered for a prorated award. Individuals transferred during the period will be eligible for a prorated award proportionate to the full months worked in the previous and transferred Company. Individuals hired between February 1, 1997 and April 30, 1997 shall not be eligible to participate in the Corporate Incentive Plan for FY 1997. Participants who have been promoted or demoted after May 1, 1996, but before February 1, 1997, will be considered for prorated payouts based on the schedules in effect for each position. Plan participants who become disabled (as determined by the Committee) and are out of work in excess of 30 days during the plan year, are eligible to be considered for a prorated award.

FY 1997 CORPORATE INCENTIVE PLAN PAGE 2 COMPANY PERFORMANCE MEASUREMENT Exhibit A sets forth the Company ROBE results which must be obtained in order for the corresponding percentage of the Target Incentive to be payable to participants. In determining whether ROBE targets have been met, the Committee may take into account one time charges or other factors, if any, as it deems relevant. Incentive payouts under this plan are contingent upon achievement of the Company's stated leverage target in effect at the close of FY 1997. The aggregate incentive amounts which may be paid out under the plan are designated by the Chairman & CEO and approved by the Committee. PAYMENT OF INDIVIDUAL INCENTIVE AMOUNTS

FY 1997 CORPORATE INCENTIVE PLAN PAGE 2 COMPANY PERFORMANCE MEASUREMENT Exhibit A sets forth the Company ROBE results which must be obtained in order for the corresponding percentage of the Target Incentive to be payable to participants. In determining whether ROBE targets have been met, the Committee may take into account one time charges or other factors, if any, as it deems relevant. Incentive payouts under this plan are contingent upon achievement of the Company's stated leverage target in effect at the close of FY 1997. The aggregate incentive amounts which may be paid out under the plan are designated by the Chairman & CEO and approved by the Committee. PAYMENT OF INDIVIDUAL INCENTIVE AMOUNTS The determination of the total available incentive amount, if any, which might be paid to any plan participant, shall be determined by the Chairman & CEO and approved by the Committee in its sole discretion following the close of FY 1997 and shall be based upon the achievement of the related ROBE result as shown on Exhibit A and the achievement of individual performance objectives as identified at the beginning of the plan year. At the determination of the Committee, payment may be made in cash and/or in shares of Common Stock of the Company awarded pursuant to the Stock Compensation Plan. Payment of the portion of the incentive target recognizing individual performance is contingent upon achievement of the threshold corporate net income (net of incentive plan funding). No participant has any vested interest in the plan and must be actively employed as of April 30, 1997 to be eligible for incentive award distribution. A participant may elect to defer receipt of all or a portion of any cash incentive payment as provided in the form of Deferral Elections approved from time to time by the Committee. Payments in the form of PHH stock may not be deferred. Such deferral election must be made by the participant in accordance with applicable deferred compensation plans and in a manner consistent with applicable federal, state and local tax laws. ADMINISTRATION The plan adopted by the Committee shall be administered by the Chairman & CEO. The Chair & CEO is authorized to promulgate rules relating to administration of the plan and to make determinations with respect thereto, including any discretionary cash payments in excess of available incentive amounts calculated hereunder. If a "change of control" (as defined in the Company's Stock Compensation Plan) occurs after the term, all incentive payments which the participant had elected to defer under the terms of any unfunded deferred compensation plan established by the company shall be either contributed in full by the Company under any such deferred compensation plan or, if no such trust has been established, paid in full by the Company as soon as practicable following the "change of control". REVISION OR CANCELLATION OF THE PLAN This Corporate Incentive Plan shall not create any rights of future participation therein of any employee. The Committee shall have the full authority, in its sole discretion, to unilaterally modify, terminate or cancel the plan at any time, in whole or in part, or with respect to any designated participant, at any time, without liability to any participant. NON-TRANSFERABILITY A participant may not pledge, assign, sell, encumber, or transfer or otherwise dispose of any rights or interests under the plan and any attempted disposition shall be null and void.

PHH CORPORATION CEO & PRESIDENT INCENTIVE PLAN FY 1997 The purpose of this plan is to encourage the achievement of the annual business objectives of PHH Corporation and its shareholders, by providing incentive opportunities to the CEO & President of PHH Corporation.

PHH CORPORATION CEO & PRESIDENT INCENTIVE PLAN FY 1997 The purpose of this plan is to encourage the achievement of the annual business objectives of PHH Corporation and its shareholders, by providing incentive opportunities to the CEO & President of PHH Corporation. DEFINITIONS A) The "Company" shall mean PHH Corporation, or its successor in interest. B) The "term" shall mean the term of this plan which shall be the fiscal year beginning May 1, 1996 through April 30, 1997. C) "Return on beginning equity (ROBE)" shall mean the Company's annual net income after taxes, after giving effect for any incentive to be paid, computed in accordance with generally accepted accounting principles, divided by the beginning shareholders' equity for the fiscal year. The performance measure for the plan shall be the ROBE result for the fiscal year in the plan. Determination of the performance measure results shall be made by the Committee following the close of fiscal 1997. D) The "Committee" shall mean the Compensation Committee of the Board of Directors. E) CEO & President" shall mean the Chief Executive Officer and President of PHH Corporation. F) "Salary" shall mean the annual base salary paid during the term. G) "Target Incentive" shall be fixed at that level of ROBE result determined by the Committee as constituting 100% of incentive payout and shall be expressed as a percent of salary. PARTICIPATION Participation in the plan is limited to the CEO & President. EMPLOYMENT STATUS AND GRADE CHANGES Any participant designated as of May 1, 1996 as a plan participant and actively employed on or before February 1, 1997 is eligible to participate in this program. A participant who is hired or transferred during the plan year is eligible to be considered for a prorated award. An individual transferred during the period will be eligible for a prorated award proportionate to the full months worked in the previous and transferred Company. An individual hired between February 1, 1997 and April 30, 1997 shall not be eligible to participate in this plan for FY 1997. A participant who has been promoted or demoted after May 1, 1996, but before February 1, 1997, will be considered for a prorated payout based on the schedules in effect for each position. A plan participant who becomes disabled (as determined by the Committee) and is out of work in excess of 30 days during the plan year, is eligible to be considered for a prorated award as determined by the Committee.

FY 1997 CEO & PRESIDENT INCENTIVE PLAN PAGE 2 COMPANY PERFORMANCE MEASUREMENT Exhibit A sets forth the Company ROBE results which must be obtained in order for the corresponding percentage of the Target Incentive to be payable to a participant. In determining whether ROBE targets have been met, the Committee may take into account one time charges or other factors, if any, as it deems relevant. Incentive payouts under this plan are contingent upon achievement of the Company's stated leverage target in effect at the close of FY 1997. The aggregate incentive amounts which may be paid out under the plan are designated and approved by the Committee. PAYMENT OF INDIVIDUAL INCENTIVE AMOUNTS The determination of the total available incentive amount, if any, which might be paid to any plan participant, shall

FY 1997 CEO & PRESIDENT INCENTIVE PLAN PAGE 2 COMPANY PERFORMANCE MEASUREMENT Exhibit A sets forth the Company ROBE results which must be obtained in order for the corresponding percentage of the Target Incentive to be payable to a participant. In determining whether ROBE targets have been met, the Committee may take into account one time charges or other factors, if any, as it deems relevant. Incentive payouts under this plan are contingent upon achievement of the Company's stated leverage target in effect at the close of FY 1997. The aggregate incentive amounts which may be paid out under the plan are designated and approved by the Committee. PAYMENT OF INDIVIDUAL INCENTIVE AMOUNTS The determination of the total available incentive amount, if any, which might be paid to any plan participant, shall be determined by the Committee in its sole discretion following the close of FY 1997 and shall be based upon the achievement of the related ROBE result as shown on Exhibit A. At the determination of the Committee, payment may be made in cash and/or in shares of Common Stock of the Company awarded pursuant to the Stock Compensation Plan. No participant has any vested interest in the plan and must be actively employed as of April 30, 1997 to be eligible for incentive award distribution. A participant may elect to defer receipt of all or a portion of any cash incentive payment as provided in the form of Deferral Elections approved from time to time by the Committee. Payments in the form of PHH stock may not be deferred. Such deferral election must be made by the participant in accordance with applicable deferred compensation plans and in a manner consistent with applicable federal, state and local tax laws. ADMINISTRATION The plan adopted by the Committee shall be administered by the Committee. The Committee is authorized to promulgate rules relating to administration of the plan and to make determinations with respect thereto, including any discretionary cash payments in excess of available incentive amounts calculated hereunder. If a "change of control" (as defined in the Company's Stock Compensation Plan) occurs after the term, all incentive payments which the participant had elected to defer under the terms of any unfunded deferred compensation plan established by the company shall be either contributed in full by the Company under any such deferred compensation plan or, if no such trust has been established, paid in full by the Company as soon as practicable following the "change of control". REVISION OR CANCELLATION OF THE PLAN This Incentive Plan shall not create any rights of participation of any employee. The Committee shall have the full authority, in its sole discretion, to unilaterally modify, terminate or cancel the plan at any time, in whole or in part without liability to any participant. NON-TRANSFERABILITY A participant may not pledge, assign, sell, encumber, or transfer or otherwise dispose of any rights or interests under the plan and any attempted disposition shall be null and void.

AMENDMENT NO. 1 TO THE PHH CORPORATION EXCESS BENEFIT PLAN This Amendment No. 1 to the PHH Corporation Excess Benefit Plan, as amended and restated effective May 1, 1994 (the "Plan"), made by PHH Corporation, a Maryland corporation (the "Corporation"), W I T N E S S E T H: WHEREAS, the Corporation wishes to amend the Plan to clarify that Plan participants entitled to deferred or

AMENDMENT NO. 1 TO THE PHH CORPORATION EXCESS BENEFIT PLAN This Amendment No. 1 to the PHH Corporation Excess Benefit Plan, as amended and restated effective May 1, 1994 (the "Plan"), made by PHH Corporation, a Maryland corporation (the "Corporation"), W I T N E S S E T H: WHEREAS, the Corporation wishes to amend the Plan to clarify that Plan participants entitled to deferred or early deferred pension benefits under Article VI of the PHH Corporation Pension Plan are entitled to benefits under the Plan, and to make certain other clarifying changes; NOW, THEREFORE, the Plan is amended, effective February 26, 1996, as follows: 1. Section 3.1 is amended to read as follows (revised language is underlined): 3.1 ELIGIBILITY OF BENEFITS DURING LIFE. An Eligible Employee who retires under the Early Retirement, Normal Retirement or Deferred Retirement provision of the Basic Plan, or who terminates employment and is entitled to receive a deferred pension benefit or an early deferred pension benefit pursuant to Article VI of the Basic Plan, shall be entitled to receive compensation under this Plan, from the Company, equal to the difference between the benefit payable to the Eligible Employee under the Basic Plan and the benefit which would have been payable to the Eligible Employee under the Basic Plan if the dollar and percentage limits on benefits imposed by section 415(b)(1) of the Code did not apply, and if the limit on compensation imposed by section 401(a)(17) of the Code were increased to one hundred sixty six and two-thirds percent (166 2/3%) of the actual 401(a)(17) limit. If benefits payable to an Eligible Employee under the Basic Plan are increased after the Eligible Employee's participation in the Basic Plan terminates, whether due to cost of living increases in the said section 415(b)(1) or 401(a)(17) limits or otherwise, then the Eligible Employee's benefits under this Plan shall be decreased accordingly. 2. The first sentence of Section 6.4 is amended to read as follows (revised language is underlined): The Board may amend the Plan from time to time in any respect, and may at any time terminate the Plan in its entirety or as it applies to any Employer; provided, however, that, except as provided in Section 3.1 and Section 4.1, an Eligible Employee's entitlement to benefits earned under this Plan as of the date of amendment or termination may not be terminated or reduced.

3. The first paragraph of Section 6.8 is amended to read as follows (revised language is underlined): 6.8 FORFEITURE OF RIGHT TO FUTURE BENEFITS. Notwithstanding any other provision of this Plan, an Eligible Employee (or such Eligible Employee's surviving spouse or other beneficiary) will forfeit all rights with respect to Plan benefits on account of which payments remain to be made and will be immediately obligated to return to the Company the amount of any Plan benefits previously distributed to the Eligible Employee and the Eligible Employee's surviving spouse or other beneficiary if (a) such Eligible Employee, within a period of two years from the date his or her employment with the Employer or its affiliates terminates, directly or indirectly, either individually or as owner, partner, agent, employee, consultant or otherwise, except for the account of and on behalf of the Employer or an affiliate of the Employer, engages in any activity competitive with the business of the Employer or an affiliate of the Employer, or in competition with the Employer or one of its affiliates, solicits or otherwise attempts to establish for himself or herself or for any other person, firm or entity, any business relationships with any person, firm or corporation which was, at the time the Eligible Employee's employment terminates or within one year prior thereto, a customer of the Employer or one of its affiliates or (b) an Eligible Employee's employment is terminated because of willful misconduct or gross negligence in the performance of his or her duties, as determined by the Employer, and the Committee determines in its sole and absolute discretion that Plan benefits shall be forfeited. IN WITNESS WHEREOF, the Corporation has caused this Amendment No. 1 to be executed by its duly

3. The first paragraph of Section 6.8 is amended to read as follows (revised language is underlined): 6.8 FORFEITURE OF RIGHT TO FUTURE BENEFITS. Notwithstanding any other provision of this Plan, an Eligible Employee (or such Eligible Employee's surviving spouse or other beneficiary) will forfeit all rights with respect to Plan benefits on account of which payments remain to be made and will be immediately obligated to return to the Company the amount of any Plan benefits previously distributed to the Eligible Employee and the Eligible Employee's surviving spouse or other beneficiary if (a) such Eligible Employee, within a period of two years from the date his or her employment with the Employer or its affiliates terminates, directly or indirectly, either individually or as owner, partner, agent, employee, consultant or otherwise, except for the account of and on behalf of the Employer or an affiliate of the Employer, engages in any activity competitive with the business of the Employer or an affiliate of the Employer, or in competition with the Employer or one of its affiliates, solicits or otherwise attempts to establish for himself or herself or for any other person, firm or entity, any business relationships with any person, firm or corporation which was, at the time the Eligible Employee's employment terminates or within one year prior thereto, a customer of the Employer or one of its affiliates or (b) an Eligible Employee's employment is terminated because of willful misconduct or gross negligence in the performance of his or her duties, as determined by the Employer, and the Committee determines in its sole and absolute discretion that Plan benefits shall be forfeited. IN WITNESS WHEREOF, the Corporation has caused this Amendment No. 1 to be executed by its duly authorized officer, effective as of the date specified above.
WITNESS: PHH CORPORATION

______________________________ Print Name:_____________________

By: /s/ Robert D. Kunisch _________________________________ Robert D. Kunisch Chief Executive Officer and President Date:_______________________________

Date:__________________________

Exhibit (11) PHH Corporation and Subsidiaries INFORMATION USED IN THE COMPUTATION OF PRIMARY AND FULLY-DILUTED EARNINGS PER SHARE FOR THE YEARS ENDED APRIL 30, 1996, 1994 AND 1993
1996 ---$ 81,620,000 ============ 34,311,302 539,568 -----------34,850,870 1995 ---$ 71,662,000 ============ 34,151,588 271,608 -----------34,423,196

Net income - as reported

$ 64,55 ======== 34,74 68 -------35,42

Weighted average number of shares outstanding Give effect to the exercise of dilutive options determined under the treasury stock method Number of shares used in the computation of primary earnings per share Reflect the quarter-end market price when greater than the average market price during the respective quarter Number of shares used in the computation of fully diluted earnings per share

224,050 -----------35,074,920 ============

82,490 -----------34,505,686 ============

5 -------35,48 ========

AMOUNTS PER SHARE: Primary

$ 2.34 ------------

$ 2.08 ============

$ ========

Exhibit (11) PHH Corporation and Subsidiaries INFORMATION USED IN THE COMPUTATION OF PRIMARY AND FULLY-DILUTED EARNINGS PER SHARE FOR THE YEARS ENDED APRIL 30, 1996, 1994 AND 1993
1996 ---$ 81,620,000 ============ 34,311,302 539,568 -----------34,850,870 1995 ---$ 71,662,000 ============ 34,151,588 271,608 -----------34,423,196

Net income - as reported

$ 64,55 ======== 34,74 68 -------35,42

Weighted average number of shares outstanding Give effect to the exercise of dilutive options determined under the treasury stock method Number of shares used in the computation of primary earnings per share Reflect the quarter-end market price when greater than the average market price during the respective quarter Number of shares used in the computation of fully diluted earnings per share

224,050 -----------35,074,920 ============

82,490 -----------34,505,686 ============

5 -------35,48 ========

AMOUNTS PER SHARE: Primary Assuming full dilution

$ 2.34 -----------$ 2.33 ============

$ 2.08 ============ $ 2.08 ============

$ ======== $ ========

Note: On June 24, 1996, the Board of Directors authorized a two-for-one common stock split, distributable July 31, 1996, to stockholders of record on July 5, 1996. The number of shares and per share amounts reflect the two-for-one common stock split. 32

Exhibit (12) PHH CORPORATION AND SUBSIDIARIES Computation of Ratio of Earnings to Fixed Charges (dollars in thousands)
1996 ---Income from continuing operations before income taxes Add: Interest expense Interest portion of rentals* Earnings available for fixed charges $ 139,148 252,966 7,840 --------$ 399,954 ========= 1995 ---$ 121,318 194,196 8,065 --------$ 323,579 ========= Year Ended April 30 1994 ---$ 109,796 162,108 9,088 --------$ 280,992 ========= $ 1993 ---94,238 $

193,935 8,456 --------$ 296,629 =========

--$ ===

Fixed charges: Interest expense Interest portion of rentals*

$ 252,966 7,840 --------$ 260,806 ========= 1.53 =========

$ 194,196 8,065 --------$ 202,261 ========= 1.60 =========

$ 162,108 9,088 --------$ 171,196 ========= 1.64 =========

$ 193,935 8,456 --------$ 202,391 ========= 1.47 =========

$ --$ ===

Ratio of earnings to fixed charges

===

Exhibit (12) PHH CORPORATION AND SUBSIDIARIES Computation of Ratio of Earnings to Fixed Charges (dollars in thousands)
1996 ---Income from continuing operations before income taxes Add: Interest expense Interest portion of rentals* Earnings available for fixed charges $ 139,148 252,966 7,840 --------$ 399,954 ========= 1995 ---$ 121,318 194,196 8,065 --------$ 323,579 ========= Year Ended April 30 1994 ---$ 109,796 162,108 9,088 --------$ 280,992 ========= $ 1993 ---94,238 $

193,935 8,456 --------$ 296,629 =========

--$ ===

Fixed charges: Interest expense Interest portion of rentals*

$ 252,966 7,840 --------$ 260,806 ========= 1.53 =========

$ 194,196 8,065 --------$ 202,261 ========= 1.60 =========

$ 162,108 9,088 --------$ 171,196 ========= 1.64 =========

$ 193,935 8,456 --------$ 202,391 ========= 1.47 =========

$ --$ ===

Ratio of earnings to fixed charges

===

* Amounts reflect a one-third portion of rentals, the portion deemed representative of the interest factor. Note: The interest included in fixed charges consists of the amounts identified as interest expense in the Consolidated Statements of Income, the substantial portion of which represents interest on debt incurred to finance leasing activities and mortgage banking activities, as well as the interest costs associated with home relocation services which are ordinarily recovered through direct billings to clients and are included with "Costs, including interest, of carrying and reselling homes" in the Consolidated Financial Statements. 33

Exhibit (21) Subsidiaries of Registrant PHH Corporation owns 100% of PHH Holdings Corporation. All other companies (except those formed under Ontario or Canadian federal law, which are owned 100% directly by PHH Corporation) are owned 100% either directly or indirectly by PHH Holdings Corporation (a Maryland corporation).
PHH PHH PHH PHH PHH PHH PHH PHH PHH PHH Vehicle Management Services Corporation (a Maryland corporation) Vehicle Management Services Inc. (a Canadian corporation) Vehicle Management Services PLC (a United Kingdom corporation) Vehicle Management Services (Deutschland) Corporation (a Maryland corporation) Real Estate Services Corporation (a Delaware corporation) Real Estate Services Inc. (an Ontario corporation) Relocation PLC (a United Kingdom corporation) Fantus Corporation (a Maryland corporation) Mortgage Services Corporation (a New Jersey corporation) Europe PLC (a United Kingdom corporation)

The names of 20 consolidated multiple subsidiaries wholly owned directly or indirectly by the registrant have been omitted. All such subsidiaries operate in the United States and all are engaged in providing financing for clients' leased vehicle and truck fleets. Other particular subsidiaries have been omitted because in the aggregate they would not constitute a significant subsidiary.

Exhibit (21) Subsidiaries of Registrant PHH Corporation owns 100% of PHH Holdings Corporation. All other companies (except those formed under Ontario or Canadian federal law, which are owned 100% directly by PHH Corporation) are owned 100% either directly or indirectly by PHH Holdings Corporation (a Maryland corporation).
PHH PHH PHH PHH PHH PHH PHH PHH PHH PHH Vehicle Management Services Corporation (a Maryland corporation) Vehicle Management Services Inc. (a Canadian corporation) Vehicle Management Services PLC (a United Kingdom corporation) Vehicle Management Services (Deutschland) Corporation (a Maryland corporation) Real Estate Services Corporation (a Delaware corporation) Real Estate Services Inc. (an Ontario corporation) Relocation PLC (a United Kingdom corporation) Fantus Corporation (a Maryland corporation) Mortgage Services Corporation (a New Jersey corporation) Europe PLC (a United Kingdom corporation)

The names of 20 consolidated multiple subsidiaries wholly owned directly or indirectly by the registrant have been omitted. All such subsidiaries operate in the United States and all are engaged in providing financing for clients' leased vehicle and truck fleets. Other particular subsidiaries have been omitted because in the aggregate they would not constitute a significant subsidiary. 34

Exhibit (24) PHH CORPORATION Power of Attorney KNOW ALL MEN BY THESE PRESENTS, as of this 15th day of April, 1996, that the undersigned directors and officers of PHH Corporation, a Maryland Corporation with Offices at 11333 McCormick Road, Hunt Valley, Maryland 21031 (the "Corporation"), hereby constitute and appoint Robert D. Kunisch, Samuel H. Wright and Gordon W. Priest, Jr., and each of them, the true and lawful agents and attorneys-in-fact of the undersigned, with full power of substitution and with full power and authority in said agents and attorneys- in-fact, and in any one or more of them, to sign for the undersigned as director and/or officer of the Corporation the Corporation's annual report on Form 10-K for the fiscal year ended April 30, 1996, filed pursuant to Section 13 under the Securities Exchange Act of 1934 with the Securities and Exchange Commission, Washington, D.C., or any registration or filing with any state or local jurisdiction within the United States or any foreign jurisdiction, and any exhibits, amendments, or supplemental submissions to such SEC or state, local, or foreign registration of filing (including post-effective amendments), hereby ratifying and confirming all acts taken by such agents and attorneys-in- fact, or any one or more of them, as herein authorized.
JAMES S. BEARD James S. Beard ANDREW F. BRIMMER Andrew F. Brimmer GEORGE L. BUNTING, JR. George L. Bunting, Jr. ALAN P. HOBLITZELL, JR. Alan P. Hoblitzell, Jr. PAUL X. KELLEY Paul X. Kelley L. PATTON KLINE Director

Director

Director

Director

Director

Director

Exhibit (24) PHH CORPORATION Power of Attorney KNOW ALL MEN BY THESE PRESENTS, as of this 15th day of April, 1996, that the undersigned directors and officers of PHH Corporation, a Maryland Corporation with Offices at 11333 McCormick Road, Hunt Valley, Maryland 21031 (the "Corporation"), hereby constitute and appoint Robert D. Kunisch, Samuel H. Wright and Gordon W. Priest, Jr., and each of them, the true and lawful agents and attorneys-in-fact of the undersigned, with full power of substitution and with full power and authority in said agents and attorneys- in-fact, and in any one or more of them, to sign for the undersigned as director and/or officer of the Corporation the Corporation's annual report on Form 10-K for the fiscal year ended April 30, 1996, filed pursuant to Section 13 under the Securities Exchange Act of 1934 with the Securities and Exchange Commission, Washington, D.C., or any registration or filing with any state or local jurisdiction within the United States or any foreign jurisdiction, and any exhibits, amendments, or supplemental submissions to such SEC or state, local, or foreign registration of filing (including post-effective amendments), hereby ratifying and confirming all acts taken by such agents and attorneys-in- fact, or any one or more of them, as herein authorized.
JAMES S. BEARD James S. Beard ANDREW F. BRIMMER Andrew F. Brimmer GEORGE L. BUNTING, JR. George L. Bunting, Jr. ALAN P. HOBLITZELL, JR. Alan P. Hoblitzell, Jr. PAUL X. KELLEY Paul X. Kelley L. PATTON KLINE L. Patton Kline FRANCIS P. LUCIER Francis P. Lucier 35 Director

Director

Director

Director

Director

Director

Director

KENT C. NELSON Kent C. Nelson DONALD J. SHEPARD Donald J. Shepard ANNE M. TATLOCK Anne M. Tatlock ALEXANDER B. TROWBRIDGE Alexander B. Trowbridge ROBERT D. KUNISCH Robert D. Kunisch

Director

Director

Director

Director

Director, Chairman of the Board, President & Chief Executive Officer

ARTICLE 5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS OF PHH CORPORATION FILED ON FORM 10-K FOR THE ANNUAL PERIOD ENDED APRIL 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.

KENT C. NELSON Kent C. Nelson DONALD J. SHEPARD Donald J. Shepard ANNE M. TATLOCK Anne M. Tatlock ALEXANDER B. TROWBRIDGE Alexander B. Trowbridge ROBERT D. KUNISCH Robert D. Kunisch

Director

Director

Director

Director

Director, Chairman of the Board, President & Chief Executive Officer

ARTICLE 5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS OF PHH CORPORATION FILED ON FORM 10-K FOR THE ANNUAL PERIOD ENDED APRIL 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. CIK: 0000077776 NAME: PHH CORPORATION MULTIPLIER: 1000 CURRENCY: 0

PERIOD TYPE FISCAL YEAR END PERIOD END EXCHANGE RATE CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS PREFERRED MANDATORY PREFERRED COMMON OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE INCOME PRETAX INCOME TAX INCOME CONTINUING DISCONTINUED EXTRAORDINARY CHANGES NET INCOME EPS PRIMARY EPS DILUTED

12 MOS APR 30 1996 APR 30 1996 .001 9,288 0 474,416 5,478 0 0 93,089 0 5,672,990 0 0 0 0 96,081 512,415 5,672,990 0 2,379,600 0 0 2,016,605 0 223,847 139,148 57,528 0 0 0 0 81,620 2.34 2.33

ARTICLE 5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS OF PHH CORPORATION FILED ON FORM 10-K FOR THE ANNUAL PERIOD ENDED APRIL 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. CIK: 0000077776 NAME: PHH CORPORATION MULTIPLIER: 1000 CURRENCY: 0

PERIOD TYPE FISCAL YEAR END PERIOD END EXCHANGE RATE CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS PREFERRED MANDATORY PREFERRED COMMON OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE INCOME PRETAX INCOME TAX INCOME CONTINUING DISCONTINUED EXTRAORDINARY CHANGES NET INCOME EPS PRIMARY EPS DILUTED

12 MOS APR 30 1996 APR 30 1996 .001 9,288 0 474,416 5,478 0 0 93,089 0 5,672,990 0 0 0 0 96,081 512,415 5,672,990 0 2,379,600 0 0 2,016,605 0 223,847 139,148 57,528 0 0 0 0 81,620 2.34 2.33


								
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