Exhibit 10.12

PHH CORPORATION
SAVINGS RESTORATION PLAN

 

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Table of Contents

         
Article I
  Sponsorship and Purpose of Plan    
 
       
Article II
  Definitions    
 
       
Article III
  Enrollment and Participation    
 
       
Article IV
  Deferral Contributions    
 
       
Article V
  Earnings    
 
       
Article VI
  Vesting    
 
       
Article VII
  Distribution and Form of Benefits    
 
       
Article VIII
  Beneficiary Designation    
 
       
Article IX
  Plan Administration    
 
       
Article X
  Amendment and Termination    
 
       
Article XI
  Miscellaneous    
 
       
Article XII
  Funding    

 

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PHH CORPORATION
SAVINGS RESTORATION PLAN

Article I — Sponsorship and Purpose of Plan

1.1      Sponsorship. PHH Corporation, a corporation organized under the laws of
the State of Maryland, sponsors the PHH Corporation Savings Restoration Plan, a
non-qualified deferred compensation plan for the benefit of Participants and
Beneficiaries (as defined herein).

1.2      Purpose of Plan. The Plan is established and maintained for the purpose
of enabling a select group of management or highly compensated employees of the
Employer (as defined herein) to enhance their retirement security by permitting
the deferral of compensation in excess of certain limitations on contributions
imposed by the Internal Revenue Code of 1986 on the PHH Corporation Employee
Savings Plan.

Article II – Definitions

Wherever used in the Plan the following terms when capitalized shall have the
meanings set forth in this Article, unless otherwise required by the context.

2.1      Account shall mean the book entries maintained by the Employer or its
designee on behalf of each Participant reflecting Deferral Contributions that
have been made and adjusted to reflect Earnings; provided, however, that the
existence of such Account shall not be deemed to vest in any Participant any
right, title or interest in or to any specific assets of the Employer.

2.2      Beneficiary shall mean the person(s) or entity designated by the
Participant in accordance with the provisions of Article VIII to receive
benefits under the Plan as a result of a Participant’s death.

2.3      Board shall mean the Board of Directors of the Sponsor.

2.4      Code shall mean the Internal Revenue Code of 1986, as amended,
including regulations thereunder.

2.5      Committee shall mean Compensation Committee of the Board; provided,
that the Committee may designate certain administrative functions to the
Sponsor’s Employee Benefits Committee.

2.6      Compensation shall have the meaning set forth under the Qualified Plan,
and additionally any bonus payments to the extent determined by the Committee
from time to time in its sole discretion, but without regard to the limitations
provided under Code Section 401(a)(17).

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2.7      Deferral Contribution shall mean the amount allocated to a
Participant’s Account for any Plan Year pursuant to Section 4.1 hereof.

2.8      Earnings shall mean the amount determined in accordance with Article V
hereof by which the value of a Participant’s Account is adjusted.

2.9      Effective Date shall mean February 1, 2005.

2.10      Eligible Employee shall mean, with respect to any Plan Year, any
officer or other employee of the Employer who is each of (i) selected for
participation by the Committee based upon eligibility criteria that it shall
establish from time to time in its sole discretion, (ii) a Management or Highly
Compensated Employee (within the meaning of ERISA, as defined below) and (iii)
eligible for participation in the Qualified Plan.

2.11      Employer shall mean the Sponsor and its successors and assigns and any
subsidiary or affiliate of the Employer that adopts the Plan with the approval
of the Board.

2.12      Enrollment Agreement shall mean the agreement, in a form acceptable to
the Committee (including the use of a Voice Response System), by which an
Eligible Employee may enroll as a Participant, and which will document the
Participant’s elections under this Plan, including a Participant’s Deferral
Contribution election, Investment Fund selection, Beneficiary designation and
form of distribution.

2.13      Investment Fund shall mean one or more investment vehicles in which
amounts allocated to a Participant’s Account shall be deemed to have been
invested and which shall be used to determine Earnings in accordance with
Article V.

2.14      Participant shall mean any Eligible Employee who has enrolled in the
Plan upon the execution of an Enrollment Agreement, or any former Eligible
Employee or Beneficiary for whom an Account is maintained.

2.15      Plan shall mean this PHH Corporation Savings Restoration Plan.

2.16      Plan Year shall mean the twelve consecutive month period ending each
December 31st.

2.17      Qualified Plan shall mean the PHH Corporation Employee Savings Plan,
as amended and restated from time to time.

2.18      Sponsor shall mean PHH Corporation.

2.19      Termination of Employment shall mean a Participant’s separation from
the service of the Employer by reason of resignation, discharge, retirement,
disability or death. Separation from service as a result of a transfer to an
affiliate or subsidiary of the Employer does not constitute Termination of
Employment.

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2.20      Valuation Date shall mean the last day of each Plan Year and any other
date upon which the value of a Participant’s Account is determinable from the
custodial records.

Article III — Enrollment and Participation

3.1      Enrollment. Upon initially becoming eligible to participate, an
Eligible Employee shall enroll in the Plan by executing and filing an Enrollment
Agreement with the Committee no later than the 30th day preceding the beginning
of the Plan Year, or such other date approved by the Committee.

3.2      Continuation of Participation. A Participant shall continue to remain a
Participant as long as he or she is entitled to benefits under the Plan.

3.3      Inactive Participants. In the event a Participant is no longer an
Eligible Employee, such Participant shall become an inactive Participant,
retaining all the rights described herein, except the right to make any future
Deferral Contributions.

Article IV — Deferral Contributions

4.1      Deferral Contribution. For each Plan Year, a Participant may elect to
defer up to 8% of the Compensation payable to such Participant. Such election to
defer shall be reflected in the Enrollment Agreement in effect for the
Participant or in such other manner acceptable to the Committee. A Participant’s
Deferral Contribution shall not be made available to such Participant, except as
provided in Article VII hereof, but instead shall be allocated to the
Participant’s Account as soon as administratively feasible following the date
such Compensation would otherwise have been paid to the Participant.

4.2      Application of Deferral Contribution Election. The amount of a
Participant’s Deferral Contribution election shall be effective for compensation
payable in the Plan Year following the execution of the Enrollment Agreement.
Such election shall continue to remain in effect for all future Plan Years until
a new election has been made. Except as provided in Section 7.3 hereof, a
Participant’s election may not be changed during the Plan Year. Any change to
the amount of a Participant’s Deferral Contribution election shall be effective
for Compensation payable in the Plan Year following the Plan Year during which
such new election has been made.

Article V — Earnings

5.1      Investment Direction. Each Participant has the right to select, subject
to the approval of the Committee, the Investment Fund in which the Deferral
Contributions and any related Earnings will be deemed to have been invested as
of the date such amounts have been allocated to the Participant’s Account. Any
selection made by the Participant shall be reflected on the Enrollment Agreement
or in such other manner acceptable to the Committee. The Committee, in its sole
discretion, may allow, limit or prohibit changes by a Participant to his or her
selected Investment Funds. Neither the Employer nor the Committee is liable for
any loss resulting from the Investment Fund vehicles offered for investment of a
Participant’s Account nor from a Participant’s direction of

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the investment of any part of his or her Account. Any Participant election may
be subject to the approval of any trustee of any trust holding Deferred
Contributions.

5.2      Calculation of Earnings and Losses. As of each Valuation Date, earnings
or losses will be credited to each Participant’s Account for the period
beginning with the previous Valuation Date and ending with the current Valuation
Date. Earnings and losses shall be based on rate of return (including a negative
return) determined by the performance of the Investment Fund.

Article VI — Vesting

6.1      Vesting. A Participant’s Deferral Contributions and any related
Earnings shall at all times be fully vested.

Article VII — Distribution and Form of Benefits

7.1      Timing of Distribution. Except as provided in Section 7.3 hereof,
amounts credited to a Participant’s Account shall be distributed to the
Participant or Beneficiary as soon as administratively feasible following the
later to occur of the close of the Plan Year during which the Participant has
incurred a Termination of Employment and the date which is seven months
following the Participant’s Termination of Employment. Distribution under this
Section shall be made at such times as the Committee shall determine, and the
Participant’s Accounts shall be reduced by the amount distributed.

7.2      Form of Benefit. Amounts distributable pursuant to Section 7.1 hereof
will be paid in any of the following forms: (i) in one lump sum or (ii) in
installments payable for a term not to exceed five years. Distributions shall be
made in the form elected by the Participant in writing in a manner acceptable to
the Committee. Such election will be as made in such Participant’s Enrollment
Agreement at the time of such Participant’s initial participation in the Plan
and can only be amended in accordance with the procedures established and
maintained by the Committee. Notwithstanding the above, if (i) there is no valid
election in effect at the time of a Participant’s Termination of Employment, or
(ii) the Account balance of a Participant on the date of such Participant’s
Termination of Employment is less than $25,000, the Committee may, in its sole
discretion, distribute the entire Account balance in a single lump sum.

7.3      Unforeseeable Emergency Distribution. Notwithstanding Section 7.1, in
the event a Participant (or a former Participant who is then receiving a
distribution of his or her Accounts pursuant to the installment method under
Section 7.2) suffers an Unforeseeable Emergency (as hereinafter defined), the
Company shall distribute to such Participant as a hardship benefit (the
“Hardship Benefit”) all or any portion of the Participant’s Accounts, but only
such amount necessary to satisfy the Unforeseeable Emergency, not of tax
withstanding. An Unforeseeable Emergency shall be distributed at such times as
the Committee shall determine, and the Participant’s Accounts shall be reduced
by the amount so distributed. Financial Hardship shall have the meaning set
forth under Section 409A of the Code and/or the regulations thereunder as in
effect from time to time. The Committee shall make the decision of whether or
not, and to what extent, an Unforeseeable Emergency is payable to the
Participant, based on the facts and

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circumstances of the case. The Committee’s decision as to whether or not an
Unforeseeable Emergency is payable, and to what extent it is payable, shall be
final, conclusive and binding on all persons.

Article VIII — Beneficiary Designation

8.1      Designation. Upon enrollment in the Plan, each Participant shall file
with the Committee a written designation of one or more persons as the
Beneficiary who shall be entitled to receive the amount, if any, payable under
the Plan upon the Participant’s death. A Participant may, from time to time,
revoke or change his or her Beneficiary designation without the consent of any
prior Beneficiary by filing a new such designation with the Committee on a form
designated by the Committee for such purpose. The most recent such designation
received by the Committee shall be controlling and shall be effective upon
receipt and acceptance by the Committee; provided, however, that no designation,
or change or revocation thereof, shall be effective unless received by the
Committee prior to the Participant’s death.

8.2      Failure to Designate Beneficiary. If no such Beneficiary designation is
in effect at the time of a Participant’s death, or if no designated Beneficiary
survives the Participant, or if such designation conflicts with law, the
Participant’s estate shall be deemed to have been designated as the Beneficiary
and shall receive the payment of the amount, if any, payable under the Plan upon
the Participant’s death. If the Committee is in doubt as to the right of any
person to receive such amount, the Committee may retain such amount, without
liability for any interest thereon, until the rights thereto are determined, or
the Committee may pay such amount into any court of appropriate jurisdiction and
such payment shall be a complete discharge of the obligations of the Employer
under the Plan.

8.3      Payment to Representatives. If the Committee determines that a
Participant or Beneficiary is legally incapable of giving valid receipt and
discharge for the payment due from this Plan, such amounts shall be paid to a
duly appointed and acting guardian, if any. If no such guardian is appointed and
acting, the Committee may retain such amount, without liability for any interest
thereon, until the rights thereto are determined, or the Committee may pay such
amount into any court of appropriate jurisdiction on behalf of the Participant
or Beneficiary and such payment shall be a complete discharge of the obligations
of the Employer under the Plan.

Article IX — Plan Administration

9.1      Powers and Duties of Administrative Committee. The Committee shall have
absolute discretion with respect to the operation, interpretation and
administration of the Plan. The Committee’s powers and duties shall include, but
not be limited to:

  a)  
Establishing Accounts for Participants;

  b)  
Determining eligibility for, and amount of, distributions from the Plan;

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  c)  
Adopting, interpreting, altering, amending or revoking rules and regulations
necessary to administer the Plan;

  d)  
Delegating ministerial duties and employing outside professionals as may be
required; and

  e)  
Entering into agreements or taking such other actions on behalf of the Employer
as are necessary to implement the Plan.

In the event a member of the Committee is also a Participant, such member shall
not be entitled to make any decision with respect to his or her own
participation in, and benefits under, the Plan. Any action of the Committee may
be taken by a vote or written consent of the majority of the Committee members
entitled to act. Any Committee member shall be entitled to represent the
Committee, including the signing of any certificate or other written direction,
with regard to any action approved by the Committee.

9.2      Expenses. All expenses, including, but not limited to any investment
fees, administrative fees and income taxes, incurred with respect to the Plan
shall be paid by the Employer.

9.3      Claims Procedure. In the event a claim by a Participant relating to the
amount of any distribution is denied, such person will be given written notice
by the Committee of such denial, which notice shall set forth the reason for
denial. The Participant may, within sixty (60) days after receiving the notice,
request a review of such denial by filing notice in writing with the Committee.
The Committee, in its discretion, may request a meeting with the Participant to
clarify any matters it deems pertinent. The Committee will render a written
decision within sixty (60) days after receipt of such request, stating the
reason for its decision. If the Committee is unable to respond within sixty
(60) days, an additional sixty (60) days may be taken by the Committee to
respond. The Participant will be notified if the additional time is necessary by
the end of the initial sixty (60) day period. The determination of the Committee
as to any disputed questions or issues arising under the Plan and all
interpretations, determinations and decisions of the Committee with respect to
any claim hereunder shall be final, conclusive and binding upon all persons.

Article X — Amendment and Termination

10.1      Amendment. Except as expressly provided in Section 10.3 hereof, the
Sponsor, in its sole discretion, by action of its Board or other governing body
charged with the management of the Sponsor, or its designee, may amend the Plan,
in whole or in part, at any time.

10.2      Termination. The Sponsor, by action of its Board or such other
governing body charged with the management of the Sponsor, or its designee, may
terminate this Plan at any time. Upon termination of the Plan, all future
Deferral Contributions hereof will be suspended. However, earnings will continue
to be credited in accordance with Article V until such time that a complete
distribution has been made. Upon such Plan termination, distributions from the
Plan will be made in accordance with Article VII as if no such termination had
occurred.

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10.3      Protection of Benefit. No amendment or termination of this Plan shall
reduce the rights of any Participant with respect to amounts allocated to a
Participant’s Account prior to the date of such amendment or termination without
the Participant’s express written consent.

Article XI — Miscellaneous

11.1      Tax Withholding. The Employer shall have the right to deduct an amount
sufficient in the opinion of the Employer to satisfy all federal, state and
other governmental tax withholding requirements relating to any distribution
from the Plan.

11.2      Offset to Benefits. Amounts payable to the Participant under the Plan
may be offset by any reasonable monetary claims the Employer has against the
Participant.

11.3      Inalienability. Except as provided in Section 11.2 hereof, a
Participant’s right to payments under this Plan are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors of the Participant. In no event shall
the Employer make any payment under this Plan to any person or entity other than
the Participant or Beneficiary, unless required by law.

11.4      Employment. The adoption and maintenance of this Plan does not
constitute a contract between the Employer and any Participant and is not
consideration for the employment of any person. Nothing contained herein gives
any Participant the right to be retained in the employ of the Employer or
derogates from the right of the Employer to discharge any Participant at any
time and for any reason without regard to the effect of such discharge upon his
or her rights as a Participant in the Plan.

11.5      Indemnity of Committee. The Employer indemnifies and holds harmless
the Committee and its designees from and against any and all losses resulting
from any liability to which the Committee may be subjected by reason of any act
or conduct (except willful misconduct or gross negligence) in its official
capacity in the administration of this Plan, including all costs and expenses
reasonably incurred in its defense, in case the Employer fails to provide such
defense.

11.6      Liability. No member of the Board, the Committee, or management of the
Employer shall be liable to any person for any action taken under the Plan.

11.7      Rules of Construction.

(a)      Governing Law. The construction and operation of this Plan are governed
by the laws of the State of Delaware, except to the extent superseded by federal
law.

(b)      Headings. The headings of Articles, Sections and Subsections are for
reference only and are not to be utilized in construing the Plan.

(c)      Gender. Unless clearly inappropriate, all pronouns of whatever gender
refer

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indifferently to persons or objects of any gender.

(d)      Singular and Plural. Unless clearly inappropriate, singular terms refer
also to the plural number and vice versa.

(e)      Severability. If any provision of this Plan is held illegal or invalid
for any reason, the remaining provisions are to remain in full force and effect
and to be reformed, construed and enforced in accordance with the purposes of
the Plan as if the illegal or invalid provision did not exist.

Article XII — Funding

12.1      Unfunded Plan. This Plan is intended to be unfunded for tax purposes
and all distributions hereunder shall be made out of the general assets of the
Employer. No Participant or Beneficiary shall have any right, title, interest,
or claim in or to any assets of the Employer other than as an unsecured
creditor. The Plan constitutes only an unsecured commitment by the Employer to
pay benefits to the extent, and subject to the limitations, provided for herein.
Although, this Plan constitutes an “employee benefit plan” within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974 (“ERISA”),
it is intended to cover only a select group of management or highly compensated
employees pursuant to Sections 201, 301 and 401 of ERISA.

12.2      Trust. Notwithstanding the foregoing, the Employer shall contribute to
an irrevocable grantor trust amounts allocated to a Participant’s Account under
Article IV and V hereof. The assets of such trust shall be available to the
creditors of the Employer in the event of bankruptcy or insolvency. To the
extent of the trust assets, amounts due under the Plan shall be payable first
from such trust to Plan Participants before any claim is made against the
Employer. The Committee may provide direction to the trustee or custodian on
behalf of the Employer as it deems necessary to provide for the proper
distribution of benefits from the trust.

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