EX-10.12



 





Exhibit 10.12



PHH CORPORATION

SAVINGS RESTORATION PLAN




 









 





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	 	 







 









 








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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