EX-10.11



 





Exhibit 10.11


PHH CORPORATION

OFFICER DEFERRED COMPENSATION PLAN




ARTICLE 1-INTRODUCTION



1.1 Purpose of Plan



PHH Corporation has adopted the Plan set forth herein to provide a means by which certain
employees may elect to defer receipt of designated percentages or amounts of their Compensation and
to provide a means for certain other deferrals of Compensation.



1.2 Status of Plan


The Plan is intended to be “a plan which is unfunded and is maintained by an employer primarily for
the purpose of providing deferred compensation for a select group of management or highly
compensated employees” within the meaning of Sections 201(2) and 301(a)(3) of the Employee
Retirement Income Security Act of 1974 (“ERISA”), and shall be interpreted and administered to the
extent possible in a manner consistent with such intent.



ARTICLE 2-DEFINITIONS


Wherever used herein, the following terms have the meanings set forth below, unless a
different meaning is clearly required by the context:


2.1 Account means, for each Participant, the account established for his or her benefit under
Section 5.1.


2.2 Adoption Agreement means such agreement, if deemed by PHH Corporation to be necessary and
appropriate, between Merrill Lynch and the Employer establishing the Plan and/or containing all the
options selected by the Employer, as the same may be amended from time to time.


2.3 Change of Control Transaction means any transaction or series of transactions pursuant to or as
a result of which (i) during any period of not more than 24 months, individuals who at the
beginning of such period constitute the Board of Directors of PHH Corporation (the “Board”), and
any new director (other than a director designated by a third party who has entered into an
agreement to effect a transaction described in clause (ii), (iii) or (iv) of this section 2.3)
whose election by the Board or nomination for election by the PHH Corporation’s stockholders was
approved by a vote of at least a majority of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for election was
previously so approved (other than approval given in connection with an actual or threatened proxy
or election contest), cease for any reason to constitute at least a majority of the members of the
Board, (ii) any person or entity is or becomes, directly or indirectly, the beneficial owner of 50%
or more of the common stock of PHH Corporation (or other securities of the PHH Corporation having
generally the right to vote for election of the Board), (iii) PHH Corporation or any subsidiary
shall sell, assign or otherwise transfer, directly or indirectly, assets (including stock or other
securities of subsidiaries) having a fair market or book value or earning power of 50% or more of
the assets or earning power of PHH Corporation and its subsidiaries (taken as a whole) to any third
party, other than PHH Corporation or a wholly-owned subsidiary thereof, (iv) control of 50% or more
of the business of PHH Corporation shall be sold, assigned or otherwise transferred directly or
indirectly to any third party, (v) there is consummated a merger or consolidation of PHH
Corporation with any other corporation, other than (A) a merger or consolidation which would result
in the voting securities of PHH Corporation outstanding immediately prior to such event continuing
to represent (either by remaining outstanding or by being converted into voting securities of the
surviving entity or any parent thereof) at least 50% of the combined voting power of the securities
of PHH Corporation or such surviving entity or any parent thereof outstanding immediately after
such event or (B) a merger or consolidation effected to implement a



 









 




recapitalization of PHH Corporation (or similar transaction) in which no person or entity becomes
the beneficial owner or more than 50% or more of the combined voting power of PHH Corporation’s
then outstanding securities or (vi) the shareholders of PHH Corporation approve a plan of
liquidation or dissolution.


2.4 Code means the Internal Revenue Code of 1986, as amended from time to time. Reference to any
section or subsection of the Code includes reference to any comparable or succeeding provisions of
any legislation which amends, supplements or replaces such section or subsection.


2.5 Compensation has the meaning elected by the Employer in the Adoption Agreement, or as otherwise
determined by the Employer.


2.6 Effective Date means the date chosen in the Adoption Agreement as of which the Plan first
becomes effective from time to time.


2.7 Election Form means the participation election form as approved and prescribed by the Plan
Administrator.



2.8 Elective Deferral means the portion of Compensation which is deferred by a Participant under
Section 4.1.


2.9 Eligible Employee means, on the Effective Date or on any Entry Date thereafter, each employee
of the Employer who satisfies the criteria established in the Adoption Agreement, or as otherwise
determined by the Employer in its sole discretion.


2.10 Employer means the corporation referred to in the Adoption Agreement, any successor to all or
a major portion of the Employer’s assets or business which assumes the obligations of the Employer,
and each other entity that is affiliated with the Employer which adopts the Plan with the consent
of the Employer, provided that the Employer that signs the Adoption Agreement shall have the sole
power to amend this Plan and shall be the Plan Administrator if no other person or entity is so
serving at any time.


2.11 ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time.
Reference to any section or subsection of ERISA includes reference to any comparable or succeeding
provisions of any legislation which amends, supplements or replaces such section or subsection.


2.12 Incentive Contribution means a discretionary additional contribution made by the Employer as
described in Section 4.3.


2.13 Insolvent means either (i) the Employer is unable to pay its debts as they become due, or (ii)
the Employer is subject to a pending proceeding as a debtor under the United States Bankruptcy
Code.


2.14 Matching Deferral means a deferral for the benefit of a Participant as described in Section
4.2.


2.15 Participant means any individual who participates in the Plan in accordance with Article 3.


2.16 Plan means this PHH Officer Corporation Deferred Compensation Plan, as amended from time to
time, and the provisions of the Adoption Agreement incorporated therein.


2.17 Plan Administrator means the person, persons or entity designated by the Employer in the
Adoption Agreement to administer the Plan and to serve as the agent for “Company” with respect to
the Trust as contemplated by the agreement establishing the Trust. If no such person or entity is
so serving at any time, the Employer shall be the Plan Administrator.


2.18 Plan Year means the 12-month period chosen in the Adoption Agreement.



 









 




2.19 Total and Permanent Disability means the inability of a Participant to engage in any
substantial gainful activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted or can be expected to last for a
continuous period of not less than 12 months, and the permanence and degree of which shall be
supported by medical evidence satisfactory to the Plan Administrator.


2.20 Trust means the trust established by the Employer that identifies the Plan as a plan with
respect to which assets are to be held by the Trustee.


2.21 Trustee means the trustee or trustees under the Trust.


2.22 Year of Service means the computation period and service requirement elected in the Adoption
Agreement.



ARTICLE 3-PARTICIPATION



3.1 Commencement of Participation



Any individual who elects to defer part of his or her Compensation in accordance with Section 4.1
shall become a Participant in the Plan as of the date such deferrals commence in accordance with
Section 4.1. Any individual who is not already a Participant and whose Account is credited with an
Incentive Contribution shall become a Participant as of the date such amount is credited.



3.2 Continued Participation


A Participant in the Plan shall continue to be a Participant so long as any amount remains credited
to his or her Account. Notwithstanding the foregoing, Participation in respect of any calendar
year is not a guarantee of participation in respect of any future calendar year.



ARTICLE 4-ELECTIVE AND MATCHING DEFERRALS



4.1 Elective Deferrals



An individual who is an Eligible Employee on the Effective Date may, by completing an Elections
Form and filing it with the Plan Administrator within 30 days following the Effective Date, elect
to defer a percentage or dollar amount of one or more payments of Compensation, on such terms as
the Plan Administrator may permit, which are payable to the Participant after the date on which the
individual files the Election Form. Any individual who becomes an Eligible Employee after the
Effective Date may, by completing an Election Form and filing it with the Plan Administrator within
30 days following the date on which the Plan Administrator gives such individual written notice
that the individual is an Eligible Employee, elect to defer a percentage or dollar amount of one or
more payments of Compensation, on such terms as the Plan Administrator may permit, which are
payable to the Participant after the date on which the individual files the Election Form. Any
Eligible Employee who has not otherwise initially elected to defer Compensation in accordance with
this paragraph 4.1 may elect to defer a percentage or dollar amount of one or more payments of
Compensation, on such terms as the Plan Administrator may permit, commencing with Compensation paid
in the next succeeding Plan Year, by completing an Election Form prior to the first day of such
succeeding Plan Year. In addition, a Participant may defer all or part of the amount of any
elective deferral or matching contribution made on his or her behalf to the Employer’s 401(k) plan
for the prior Plan Year but treated as an excess deferral, an excess contribution or otherwise
limited by the application of the limitations of sections 401(k), 401(m), 415 or 402(q) of the
Code, so long as the Participant so indicates on an Election Form. A Participant’s Compensation
shall be reduced in accordance with the Participant’s election hereunder and amounts deferred
hereunder shall be paid by the Employer to the Trust as soon as administratively feasible and
credited to the Participant’s Account as of the date the amounts are received by the Trustee.



 









 




An election to defer a percentage or dollar amount of Compensation for any Plan Year shall apply
for subsequent Plan Years unless changed or revoked. A Participant may change or revoke his or her
deferral election as of the first day of any Plan Year by giving written notice to the Plan
Administrator before such first day (or any such earlier date as the Plan Administrator may
prescribe).



4.2 Matching Deferrals


After each payroll period, monthly, quarterly, or annually, at the Employer’s discretion, the
Employer shall contribute to the Trust Matching Deferrals equal to the rate of Matching
Contribution selected by the Employer and multiplied by the amount of the Elective Deferrals
credited to the Participants’ Accounts for such period under Section 4.1. Each Matching Deferral
will be credited, as of the later of the date it is received by the Trustee or the date the Trustee
receives from the Plan Administrator such instructions as the Trustee may reasonably require to
allocate the amount received among the asset accounts maintained by the Trustee, to the
Participants’ Accounts pro rata in accordance with the amount of Elective Deferrals of each
Participant which are taken into account in calculating the Matching Deferral.



4.3 Incentive Contributions


In addition to other contributions provided for under the Plan, the Employer may, in its sole
discretion, select one or more Eligible Employees to receive an Incentive Contribution to his or
her Account on such terms as the Employer shall specify at the time it makes the contribution. For
example, the Employer may contribute an amount to a Participant’s Account and condition the payment
of that amount and accrued earnings thereon upon the Participant remaining employed by the Employer
for an additional specified period of time. The terms specified by the Employer shall supersede any
other provision of this Plan as regards Incentive Contributions and earnings with respect thereto,
provided that if the Employer does not specify a method of distribution, the Incentive Contribution
shall be distributed in a manner consistent with the election last made by the particular
Participant prior to the year in which the Incentive Contribution is made. The Employer, in its
discretion, may permit the Participant to designate a distribution schedule for a particular
Incentive Contribution provided that such designation is made prior to the time that the Employer
finally determines that the Participant will receive the Incentive Contribution.



ARTICLE 5-ACCOUNTS



5.1 Accounts



The Plan Administrator shall establish an Account for each Participant reflecting Elective
Deferrals, Matching Deferrals and Incentive Contributions made for the Participant’s benefit
together with any adjustments for income, gain or loss and any payments from the Account. The Plan
Administrator may cause the Trustee to maintain and invest separate asset accounts corresponding to
each Participant’s Account. The Plan Administrator shall establish sub-accounts for each
Participant that has more than one election in effect under Section 7.1 and such other sub-accounts
as are necessary for the proper administration of the Plan. As of the last business day of each
calendar quarter, the Plan Administrator shall provide the Participant with a statement of his or
her Account reflecting the income, gains and losses (realized and unrealized), amounts of
deferrals, and distributions of such Account since the prior statement.



5.2 Investments


The assets of the Trust shall be invested in such investments as the Trustee shall determine. The
Trustee may (but is not required to) consider the Employer’s or a Participant’s investment
preferences when investing the assets attributable to a Participant’s Account.



ARTICLE 6-VESTING


6.1 General



 









 




A Participant shall be immediately vested in, i.e., shall have a nonforfeitable right to,
all Elective Deferrals, and all income and gain attributable thereto, credited to his or her
Account. A Participant shall become vested in the portion of his or her Account attributable to
Matching Deferrals and income and gain attributable thereto in accordance with the schedule
selected by the Employer in the Adoption Agreement, subject to earlier vesting in accordance with
Sections 6.3, 6.4, and 6.5.



6.2 Vesting Service


For purposes of applying the vesting schedule in the Adoption Agreement, a Participant shall be
considered to have completed a Year of Service for each complete year of full-time service with the
Employer or an Affiliate, measured from the Participant’s first date of such employment, unless the
Employer also maintains a 401(k) plan that is qualified under section 401(a) of the Internal
Revenue Code in which the Participant participates, in which case the rules governing vesting
service under that plan shall also be controlling under this Plan.



6.3 Change of Control


A Participant shall become fully vested in his or her Account immediately prior to a Change of
Control of the Employer.



6.4 Death or Disability


A Participant shall become fully vested in his or her Account immediately prior to termination of
the Participant’s employment by reason of the Participant’s death or Total and Permanent
Disability. Whether a Participant’s termination of employment is by reason of the Participant’s
Total and Permanent Disability shall be determined by the Plan Administrator in its sole
discretion.



ARTICLE 7 – PAYMENTS



7.1 Election as to Time and Form of Payment



A Participant shall elect (on the Election Form used to elect to defer Compensation under Section
4.1) the date at which the Elective Deferrals and vested Matching Deferrals (including any earnings
attributable thereto) will commence to be paid to the Participant. Such date will be either a
fixed date, which shall be no earlier than 5 years from the date such election is made or shall be
the date which is 7 months following the Participant’s termination of employment for any reason
whatsoever. The Participant shall also elect thereon for payments to be paid in either:





	 	a.	 	a single lump-sum payment; or

	 
	 	b.	 	annual installments over a period elected by the Participant up to 10 years, the amount of
each installment to equal the balance of his or her Account
immediately prior to the installment divided by the number of installments

remaining to be paid.





Each such election will be effective for the Plan Year for which it is made and succeeding Plan
Years. Such election may not be changed under any circumstances. Except as provided in Sections
7.2 and 7.3, payment of a Participant’s Account shall be made in accordance with the Participant’s
elections under this Section 7.1.



7.2 Change of Control Transaction


As soon as possible following a Change of Control Transaction, each Participant shall be paid his
or her entire Account balance (including any amount vested pursuant to Section 6.3) in a single
lump sum.


7.3 Death



 









 




If a Participant dies prior to the complete distribution of his or her Account, the balance of the
Account shall be paid as soon as practicable to the Participant’s designated beneficiary or
beneficiaries, in the form elected by the Participant under either of the following options:





	 	a.	 	a single lump-sum payment; or

	 
	 	b.	 	annual installments over a period elected by the Participant up to 10 years, the
amount of each installment to equal the balance of the Account immediately
prior to the installment divided by the number of installments remaining to be
paid.





Any designation of beneficiary and form of payment to such beneficiary shall be made by the
Participant on an Election Form filed with the Plan Administrator and may be changed by the
Participant at any time by filing another Election Form containing the revised instructions. If no
beneficiary is designated or no designated beneficiary survives the Participant, payment shall be
made to the Participant’s surviving spouse, or, if none, to his or her issue per stirpes, in a
single payment. If no spouse or issue survives the Participant, payment shall be made in a single
lump sum to the Participant’s estate.



7.4 Taxes


All federal, state or local taxes that the Plan Administrator determines are required to be
withheld from any payments made pursuant to this Article 7 shall be withheld.



ARTICLE 8 – PLAN ADMINISTRATOR



8.1 Plan Administration and Interpretation



The Plan Administrator shall oversee the administration of the Plan. The Plan Administrator shall
have complete control and authority to determine the rights and benefits and all claims, demands
and actions arising out of the provisions of the Plan of any Participant, beneficiary, deceased
Participant, or other person having or claiming to have any interest under the Plan. The Plan
Administrator shall have complete discretion to interpret the Plan and to decide all matters under
the Plan. Such interpretation and decision shall be final, conclusive and binding on all
Participants and any person claiming under or through any Participant, in the absence of clear and
convincing evidence that the Plan Administrator acted arbitrarily and capriciously. Any
individual(s) serving as Plan Administrator who is a Participant will not vote or act on any matter
relating solely to himself or herself. When making a determination or calculation, the Plan
Administrator shall be entitled to rely on information furnished by a Participant, a beneficiary,
the Employer or the Trustee. The Plan Administrator shall have the responsibility for complying
with any reporting and disclosure requirements or ERISA.



8.2 Powers, Duties, Procedures, Etc.


The Plan Administrator shall have such powers and duties, may adopt such rules and tables, may act
in accordance with such procedures, may appoint such officers or agents, may delegate such powers
and duties, may receive such reimbursements and compensation, and shall follow such claims and
appeal procedures with respect to the Plan as it may establish.



8.3 Information


To enable the Plan Administrator to perform its functions, the Employer shall supply full and
timely information to the Plan Administrator on all matters relating to the compensation of
Participants, their employment, retirement, death, termination of employment, and such other
pertinent facts as the Plan Administrator may require.


8.4 Indemnification of Plan Administrator



 









 




The Employer agrees to indemnify and to defend to the fullest extent permitted by law any
officer(s) or employee(s) who serve as Plan Administrator (including any such individual who
formerly served as Plan Administrator) against all liabilities, damages, costs and expenses
(including attorneys’ fees and amounts paid in settlement of any claims approved by the Employer)
occasioned by any act or omission to act in connection with the Plan, if such act or omission is in
good faith.



ARTICLE 9 – AMENDMENT AND TERMINATION



9.1 Amendments



The Employer shall have the right to amend the Plan from time to time, subject to Section 9.3, by
an instrument in writing which has been executed on the Employer’s behalf by its duly authorized
officer.



9.2 Termination of Plan


This Plan is strictly a voluntary undertaking on the part of the Employer and shall not be deemed
to constitute a contract between the Employer and any Eligible Employee (or any other employee) or
a consideration for, or an inducement or condition of employment for, the performance of the
services by any Eligible Employee (or other employee). The Employer reserves the right to
terminate the Plan at any time, subject to Section 9.3, by an instrument in writing which has been
executed on the Employer’s behalf by its duly authorized officer. Upon termination, the Employer
may (a) elect to continue to maintain the Trust to pay benefits hereunder as they become due as if
the Plan had not terminated or (b) direct the Trustee to pay promptly to Participants (or their
beneficiaries) the vested balance of their Accounts. For purposes of the preceding sentence, in
the event the Employer chooses to implement clause (b), the Account balances of all Participants
who are in the employ of the Employer at the time the Trustee is directed to pay such balances
shall become fully vested and nonforfeitable. After Participants and their beneficiaries are paid
all Plan benefits to which they are entitled, all remaining assets of the Trust attributable to
Participants who terminated employment with the Employer prior to termination of the Plan and who
were not fully vested in their Accounts under Article 6 at that time shall be returned to the
Employer.



9.3 Existing Rights


No amendment or termination of the Plan shall adversely affect the rights of any Participant with
respect to amounts that have been credited to his or her Account prior to the date of such
amendment or termination.



ARTICLE 10 – MISCELLANEOUS



10.1 No Funding



The Plan constitutes a mere promise by the Employer to make payments in accordance with the terms
of the Plan and Participants and beneficiaries shall have the status of general unsecured creditors
of the Employer. Nothing in the Plan will be construed to give any employee or any other person
rights to any specific assets of the Employer or of any other person. In all events, it is the
intent of the Employer that the Plan be treated as unfunded for tax
purposes and for purposes of
Title I of ERISA.



10.2 Non-assignability


None of the benefits, payments, proceeds or claims of any Participant or beneficiary shall be
subject to any claim of any creditor of any Participant or beneficiary and, in particular, the same
shall not be subject to attachment or garnishment or other legal process by any creditor of such
Participant or beneficiary, nor shall any Participant or beneficiary have any right to alienate,
anticipate, commute, pledge, encumber or assign any of the benefits or payments or proceeds which
he or she may expect to receive, contingently or otherwise, under the Plan.




 









 


10.3 Limitation of Participants’ Rights



Nothing contained in the Plan shall confer upon any person a right to be employed or to continue in
the employ of the Employer, or interfere in any way with the right of the Employer to terminate the
employment of a Participant in the Plan at any time, with or without cause.



10.4 Participants Bound


Any action with respect to the Plan taken by the Plan Administrator or the Employer or the Trustee
or any action authorized by or taken at the direction of the Plan Administrator, the Employer or
the Trustee shall be conclusive upon all Participants and beneficiaries entitled to benefits under
the Plan.



10.5 Receipt and Release


Any payment to any Participant or beneficiary in accordance with the provisions of the Plan shall,
to the extent thereof, be in full satisfaction of all claims against the Employer, the Plan
Administrator and the Trustee under the Plan, and the Plan Administrator may require such
Participant or beneficiary, as a condition precedent to such payment, to execute a receipt and
release to such effect. If any Participant or beneficiary is determined by the Plan Administrator
to be incompetent by reason of physical or mental disability (including minority) to give a valid
receipt and release, the Plan Administrator may cause the payment or payments becoming due to such
person to be made to another person for his or her benefit without responsibility on the part of
the Plan Administrator, the Employer or the Trustee to follow the application of such funds.



10.6 Governing Law


The Plan shall be construed, administered, and governed in all respects under and by the laws of
the state of New York, without effect to conflicts of laws provisions thereof. If any provision
shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining
provisions hereof shall continue to be fully effective.



10.7 Headings and Subheadings


Headings and subheadings in this Plan are inserted for convenience only and are not to be
considered in the construction of the provisions hereof.