Document:

ex10-1.htm

    Exhibit
      10.1

    
 

    RESOLUTIONS

    OF
      THE

    COMPENSATION
      COMMITTEE

    OF
      PHH CORPORATION

    

    June
      7, 2007

    

     

    WHEREAS,
      PHH Corporation (the
“Corporation”) sponsors and maintains the PHH Corporation 2005 Equity and
      Incentive Plan (the “Plan”), which is administered by the Compensation Committee
      of the Corporation’s Board of Directors (the “Committee”);

    

    WHEREAS,
      Section 6(c) of the Plan
      authorizes the Committee to grant cash incentive awards under an annual
      incentive program to the extent that performance targets and other terms and
      conditions established by the Committee are satisfied; and

    

    WHEREAS,
      the Committee has determined
      that it is in the best interests of the Corporation to establish and maintain
      the PHH Mortgage 2007 Management Incentive Plan and the PHH Arval Management
      Incentive Plan (both effective January 1, 2007) with respect to the 2007 fiscal
      years of PHH Mortgage and PHH Arval (each a “2007 Incentive Plan” and
      collectively the “2007 Incentive Plans”) under which cash incentive awards will
      be granted to certain named executive officers and other members of management
      (each an “Executive”) in an amount equal to the product of an Executive’s base
      salary for 2007 and the Executive’s target annual bonus percentage, to the
      extent that performance targets and other conditions established by the
      Committee are determined to have been satisfied.

    

    NOW,
      THEREFORE, BE IT:

    

    RESOLVED,
      that the Committee hereby authorizes and approves the adoption of the 2007
      Incentive Plans with respect to the 2007 fiscal year of PHH Mortgage and PHH
      Arval, substantially in the forms set forth in Exhibit A and Exhibit
      B, respectively, subject to further changes and modifications as may be
      deemed appropriate upon the advice of counsel, under which cash incentive awards
      will be granted to Executives of PHH Mortgage and PHH Arval, to the extent
      that performance targets and other conditions established by the Committee
      are
      determined to have been satisfied;

    

    RESOLVED,
      that the Committee hereby approves the following performance targets for the
      2007 Incentive Plans:

    

    ______________

    [***]
      INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
      HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES
      AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE
      ACT
      OF 1934, AS AMENDED.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    PHH
      Mortgage 2007 Incentive Performance Targets:

    

    
      	
              PTIAMI
                Target

              (Before
                Accrual for MIP)

            	
              Individual
                Performance Maximum Performance
                Payout  Level

            	
              Company
                Performance Maximum Payout Level

            	
              Combined
                Maximum Payout level

            	
              Enhancements

            
	
              $[***] million

            	
              100%

            	
              100%

            	
              100%

            	 
	
              $[***]
                million

            	
              100%

            	
              120%

            	
              110%

            	
              Interpolation
                Payout

            
	
              $[***]
                million

            	
              100%

            	
              150%

            	
              125%

            	 

    

    

    PHH
      Arval 2007 Incentive Performance Targets:

    

    
      	
              PTIAMI

            	
              %
                Achieved

            	
              Pay
                Plan

            
	
              $[***]
                million

            	
              100%

            	
              100%

            
	
              $[***]
                million

            	
              110%

            	
              110%

            
	
              $[***]
                million

            	
              125%

            	
              125%

            

    

    

    RESOLVED,
      that the Committee hereby authorizes and approves cash incentive awards to
      the
      Executives, and in the target amounts, as set forth on Exhibit C with
      respect to the PHH Mortgage 2007 Incentive Plan and the PHH Arval 2007 Incentive
      Plan, to the extent that performance targets and other conditions established
      by
      the Committee are determined to have been satisfied.

     

    RESOLVED,
      that the appropriate officers and employees of the Corporation are hereby
      authorized, empowered, and directed, in the name and on behalf of the
      Corporation, to execute, acknowledge, and deliver any and all documents,
      instruments, and papers, to give all notices that may be required or
      appropriate, and to take or cause to be taken such actions as may be determined
      to be necessary, appropriate or advisable to carry out the intent or purposes
      of
      all of the foregoing resolutions, such determination to be evidenced
      conclusively by the execution and delivery of such documents or the taking
      of
      such actions.

     

    
      ______________

      [***]
        INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
        HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES
        AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE
        ACT
        OF 1934, AS AMENDED.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      A

    

    

    PHH
      MORTGAGE

    2007
      MANAGEMENT INCENTIVE PLAN DOCUMENT

    

    Plan
      Performance Term

     

    PHH
      Mortgage operates the Management Incentive Plan (MIP) on a calendar year basis,
      beginning

     

    January
      1
      and ending December 31.  Plan targets are based on this performance
      term.

    

    Plan
      Targets

    Eligible
      participants will have a total MIP target expressed as a percent of base salary
      (varying by level).

    Target
      payouts will be dependent upon successful achievement of company performance
      defined as Pre-Tax Income After Minority Interest (PTIAMI) performance for
      the
      plan term.

     

    Once
      company performance is achieved, payout will be based on two factors; a
      weighting of (Factor 1) 50%PHH Mortgage Financial
      Performance and (Factor 2) 50% onIndividual
      Performance for the plan term.

     

    The
      PHH
      Mortgage Financial Performance has a maximum factor payout of 150% and the
      Individual Performance has a maximum factor payout of 100%.  The
      maximum performance in both areas (150% Financial Performance
and 100% Individual) offer the opportunity for a total maximum
      MIP payout of 125% ([(150% *50%) + (100% * 50%)] =
      125%.)  Participants may receive payout from none, one, or both of the
      factors.

    

    The
      PHH Mortgage Financial Performance Targets and associated maximum payout levels
      are as follows:

     

    
      	
              PTIAMI
                Target

              (Before
                Accrual for MIP)

            	
              Individual
                Performance Maximum Performance
                Payout  Level

            	
              Company
                Performance Maximum Payout Level

            	
              Combined
                Maximum Payout level

            	
              Enhancements

            
	
              $[***] million

            	
              100%

            	
              100%

            	
              100%

            	 
	
              $[***]
                million

            	
              100%

            	
              120%

            	
              110%

            	
              Interpolation
                Payout

            
	
              $[***]
                million

            	
              100%

            	
              150%

            	
              125%

            	 

    

    

     

    The
      Plan will payout at 100% of target when company financial performance reaches
      PTIAMI (before MIP accrual) of $[***] million.

     

    The
      Plan will payout at 110% of target when company financial performance reaches
      PTIAMI (before MIP accrual) of $[***] million.

     

    There
      is
      no interpolated payout between the 100% and 110% payout levels.

     

    For
      PTIAMI (before MIP accrual) between $[***] million and $[***] million the
      combined payout level will be interpolated between 110% and 124.9% achievement
      of established PTIAMI target levels.

     

    There
      is
      no payout to exceed 125% of the combined MIP targets.

    
       

      ______________

      [***]
        INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
        HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES
        AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE
        ACT
        OF 1934, AS AMENDED.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Partial
      MIP Achievement Below Plan Targets

    The
      funding of the Company MIP program is based on PTIAMI above $[***] million
      before the MIP accrual.  The MIP accrual will be calculated, up to the
      Combined Maximum Payout Level of 125%, as follows: (PTIAMI before MIP accrual)
–
($[***] million).  For example, if the “PTIAMI before MIP accrual” is
      $[***] million, $[***] million in Partial MIP payouts will be accrued (i.e.,
      $[***] million - $[***] million = $[***] million in MIP
      payouts).  Should the Company achieve PTIAMI (before MIP accrual) of
      between $[***] and $[***] Million, a team player may receive a Partial MIP
      payout based on management’s discretion provided that no individual shall
      receive more than the 100% maximum Payout.  See Appendix I for
      additional information regarding the 2007 MIP accrual.

    

    Factor
      1: PHH Mortgage Financial Performance

    Plan
      Performance Target: – PHH Mortgage Pre-Tax Income After
      Minority Interest (PTIAMI)

     

    Factor
      2: Individual Performance

    Plan
      Performance Target – Management
      by Objectives Personal Rating

    Senior
      Leadership Team members will make an assessment of Individual Performance based
      on performance relative to individual department goals and objectives for the
      plan term.  Plan Performance on Individual Performance levels may not
      exceed 100% of the established Individual Performance level

     

    Individual
      MIP Calculation Examples

     

    Your
      individual MIP payout is based on the following:

     

    
      	
              1)  

            	
              Did
                the company achieve 100% of the PHH Mortgage Financial Performance
                target:

            

    

     

    
      	
              a.  

            	
              If
                no, then NO MIP payout will occur.

            

    

     

    
      	
              b.  

            	
              If
                yes, then the MIP opportunity will be split between the individual
                performance (up to 50% of target bonus) and company performance (up
                to 75%
                of target bonus) for a maximum bonus opportunity of 125% of
                target.

            

    

     

    ______________

    [***]
      INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
      HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES
      AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE
      ACT
      OF 1934, AS AMENDED.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    PHHMORTGAGE

     

    2007
      MANAGEMENT INCENTIVE PLAN DOCUMENT

     

    Example
      1:

     

    Assumptions:

     

    
      	
              Ø  

            	
              PHH
                Mortgage achieves PTIAMI performance of $[***] million
                (106.3%)

            

    

     

    
      	
              Ø  

            	
              Manager
                Level Team Player with Base Salary of
                $70,000

            

    

     

    
      	
              Ø  

            	
              Team
                Player receives an Assigned Individual Performance Rating of
                100%

            

    

     

    
      	
              Ø  

            	
              No
                proration circumstances apply

            

    

     

    
      	
              Ø  

            	
              In
                this scenario,

            

    

     

    
      	
              (a)  

            	
              PHH
                Mortgage Financial Performance is 100% of
                target

            

    

     

    
      	
              (b)  

            	
              Base
                Salary = $70,000

            

    

     

    
      	
              (c)  

            	
              MIP
                Target Percentage = 20%

            

    

     

    
      	
              (d)  

            	
              PHH
                Mortgage Financial Performance =
                100%

            

    

     

    
      	
              (e)  

            	
              PHH
                Mortgage Financial Performance Weighting =
                50%

            

    

     

    
      	
              (f)  

            	
              Assigned
                Individual Performance Rating= 100%

            

    

     

    
      	
              (g)  

            	
              Individual
                Performance Rating Weighting = 50%

            

    

     

    
      	
              (h)  

            	
              Proration
                Factor = 100%

            

    

     

    Calculation:

     

    MIP
      Payout           = (a) x
      {[(b) x (c) x (d) x (e)] + [(b) x (c) x (f) x (g)]} x (h)

     

    =
      1.00 x {[$70,000 x 0.20 x 1.00 x
      0.50] + [$70,000 x 0.20 x 1.00 x 0.50]} x 1.00

     

    =
      1.00 x {$7,000 + $7,000} x
      1.00

     

    =
      $14,000

     

    Example
      2:

     

    Same
      assumptions as above, except:

     

    
      	
              Ø  

            	
              PHH
                Mortgage Financial Performance is 97.3% of
                target

            

    

     

    
      	
              Ø  

            	
              Assigned
                Individual Performance Rating is
                100.0%

            

    

     

    Calculation:

     

    MIP
      Payout           = (a) x
      {[(b) x (c) x (d) x (e)] + [(b) x (c) x (f) x (g)]} x (h)

     

    =
      0.00 x {[$70,000 x 0.20 x 0.00 x
      0.50] + [$70,000 x 0.20 x 1.00 x 0.50]} x 1.00

     

    =
      0.00 x {$0 + $7,000} x
      1.00

     

    =
      $0 

     

    
      ______________

      [***]
        INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
        HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES
        AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE
        ACT
        OF 1934, AS AMENDED.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    PHH
      MORTGAGE

    2007
      MANAGEMENT INCENTIVE PLAN DOCUMENT

    

    Example
      3:

     

    Same
      assumptions as Example 1 above, except:

     

    
      	
              Ø  

            	
              PHH
                Mortgage Financial Performance is 110.0% of
                target

            

    

     

    
      	
              Ø  

            	
              Assigned
                Individual Performance Rating is
                75.0%

            

    

     

    Calculation:

     

    MIP
      Payout           = (a) x
      {[(b) x (c) x (d) x (e)] + [(b) x (c) x (f) x (g)]} x (h)

     

    =
      1.00 x {[$70,000 x 0.20 x 1.20 x
      0.50] + [$70,000 x 0.20 x 0.75 x 0.50]} x 1.00

     

    =
      1.00 x {$8,400 + $5,250} x
      1.00

     

    =
      $13,650

     

    Example
      4:

     

    Same
      assumptions as Example 1 above, except:

     

    
      	
              Ø  

            	
              PHH
                Mortgage Financial Performance is 125.0% of
                target

            

    

     

    
      	
              Ø  

            	
              Assigned
                Individual Performance Rating is
                100.0%

            

    

     

    Calculation:

     

    MIP
      Payout           = (a) x
      {[(b) x (c) x (d) x (e)] + [(b) x (c) x (f) x (g)]} x (h)

     

    =
      1.00 x {[$70,000 x 0.20 x 1.50 x
      0.50] + [$70,000 x 0.20 x 1.00 x 0.50]} x 1.00

     

    =
      1.00 x {$10,500 + $7,000} x
      1.00

     

    =
      $17,500

     

    Note:  Impact
      of personal contribution and performance can clearly be seen from the examples
      above.

     

    Example
      1 shows a par target payout.

     

    Example
      2 shows the impact of having a slightly below PHH Mortgage
      performance with an exceptional Individual Performance. Company did not
      achieve  at least 100% of the PHH Mortgage Financial target, so no MIP
      payout.

     

    Example
      3 shows the impact of having an above target PHH Mortgage performance
      and a below target Individual Performance rating.

     

    Example
      4 shows both exceptional PHH Mortgage performance and exceptional
      Individual Performance, resulting in maximum MIP payout
      potential.

     

    Example
      4 displays PHH Mortgage and individual performance at the maximum performance
      in
      both areas (150% Financial & 100% Individual), therefore achieving a total
      MIP payout of 125% or [(150% *50%) + (100% * 50%)] = 125%

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    PHH
      MORTGAGE

    2007
      MANAGEMENT INCENTIVE PLAN DOCUMENT

     

    Eligibility

    If
      at any
      time during the plan term a Team Player is on a formal performance improvement
      program and/or a formal disciplinary action occurs, the Individual Performance
      component will be subject to a prorated percent up to and including 100% of
      the
      entire Individual Performance factor and will impact the MIP
      payout.

    

    A
      Team
      Player must maintain a Full-Time schedule (30 hours per week or more) to be
      eligible for MIP.

    

    In
      certain scenarios, it may be necessary to adjust an individual’s MIP payment
      outside of the parameters addressed within the plan.  PHH Mortgage
      Corporation reserves the right to make these modifications as
      necessary.

    

    New
      or Newly Promoted Team Players

    Newly
      hired or promoted team players will receive a MIP payout that is prorated to
      the
      month of hire or promotion.  If a promotion increases a team player’s
      MIP percentage (expressed as percentage of base salary), the MIP payout will
      be
      determined by a weighted calculation, based on the time period applicable to
      each respective MIP percentage and base salary earnings.

    

    Team
      players hired or promoted into MIP eligible positions after September 30, 2007
      are not eligible to participate in the 2007 MIP.

    

    Termination
      of Employment

    Team
      players must be employed by PHH Mortgage Corporation at the time of payment
      (usually February of the following year) in order to be eligible for a MIP
      payout.

    

    Leave
      of Absence

    MIP
      payouts will be prorated for any leaves of absence. The proration will be based
      on the total period of time of the leave of absence.

    

    Death

    In
      the
      event of the death of a team player, the estate of the deceased team player
      will
      receive a payout based on his/her 2007 base salary earnings, prorated according
      to time participating in the plan term.

    

    Payout
      Approval

    The
      MIP
      payout will be audited, approved, and administered by the Senior Vice President
      of Finance and the Senior Vice President of Human Resources. PHH reserves the
      right to terminate, amend, modify and/or restate this Program (in whole or
      in
      part) at any time and without advance notice.

     

    

    Changes
      to the Plan

    Occasionally,
      changes in business conditions will necessitate a modification to existing
      incentive plans.  PHH Mortgage Corporation management reserves the
      right to modify the MIP as needed.  Any changes to the Plan will be
      approved by the Senior Vice President of Finance and Senior Vice President
      of
      Human Resources, and will be communicated in writing to all participants and
      their managers.

     

    

    Compliance
      on Code of Ethics Sign-Off

    Payment
      of MIP is contingent upon recipient’s signing of the annual acknowledgement of
      review of the Business Ethics and Conduct policy.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      

    

    Exhibit
      B

     

    2007
      Incentive Plan Guidelines

    

    Effective
      January 1, 2007 through December 31, 2007

    

    
      PHH
        Arval’s 2007 Growth Strategies:

      
        	
                ·  

              	
                Accelerate
                  PHH Onboard

              

      

       

      
        	
                ·  

              	
                Maximize
                  predictive modeling for PHH Collision
                  Prevention

              

      

       

      
        	
                ·  

              	
                Sell
                  new truck products

              

      

       

      
        	
                ·  

              	
                Expand
                  PHH Service Card platform

              

      

       

      
        	
                ·  

              	
                Enhance
                  North American synchronization

              

      

       

      
        	
                ·  

              	
                Invest
                  in best-in-class data quality

              

      

       

      
        	
                ·  

              	
                Implement
                  Rally to Results (R2R)
                  enterprise-wide

              

      

       

      
        	
                ·  

              	
                Leverage
                  future communications channels

              

      

       

      
        	
                ·  

              	
                Elevate
                  focus on PHH talent

              

      

       

      Details
        are available on the intranet under “Kilroy Compass.”

       

    

    The
      information contained in this document is proprietary.  Sharing this
      information with anyone who is not an employee of PHH Arval violates the PHH
      Code of Ethics.

    

    This
      document provides general guidelines for all incentive plan participants except
      those who participate in the Share the Results Plan.  For details
      regarding the Share the Results Plan, please reference the 2007 Share the
      Results Plan Guidelines.

    

    Introduction

     

    PHH
      Vehicle Management Services, LLC, doing business as PHH
      Arval,  (hereafter “PHH”) provides various incentive plans that
      enhance company unity as they gives participants the opportunity to earn
      incentive compensation contingent on:

     

    
      	
              ·  

            	
              Achievement
                of the 2007 strategic plan, growth strategy and financial
                objectives.

            

    

     

    
      	
              ·  

            	
              Successful
                achievement of key initiatives as identified by senior
                leadership.

            

    

    

    Plan
      Participation

     

    Participation
      is limited to employees whose positions and responsibilities significantly
      impact financial performance and the achievement of strategic business
      initiatives.  Contracted, temporary and casual employees are
not eligible.  Eligible participants are
      identified at the beginning of each year, or at the time of promotion, transfer,
      or new hire to an eligible position.  Participants who are hired
      during the year are eligible for a prorated award, provided their start date
      is
      prior to October 1.  Individuals hired between October 1 and December
      31 are not eligible to participate.  Individuals rehired at any
      time during the year with at least three months of prior service during that
      year will be eligible for a prorated payout.   Participants who
      experience a role change during the year may be eligible to receive a prorated
      award.  Participation in any given year does not ensure participation
      in subsequent years.  An equity review of participation occurs each
      year.

    

    Payout
      Targets

     

    The
      payout target is expressed as a percentage of annual earnings.  A
      participant's payout target is determined based on three
      criteria:  total compensation as determined by the competitive
      marketplace, the appropriate mix of base pay and the “at risk” component of
      incentive pay, and internal equity. The payout target is 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    fixed
      at
      the level of company, financial and other performance that constitutes 100%
      achievement; the actual payout percentage, and the percentage of earnings it
      represents, will be dependent on the actual results achieved.

    

    Plan
      Design

     

    Plan
      elements and their weighting are reviewed each year.  Elements of the
      Plan may include PHH financial performance, other total company performance
      measures, team results and individual results.

    

    Annual
      Plan Insert

     

    The
      Annual Plan Insert is a separate document that will be provided to each Plan
      participant.  The insert provides personalized details
      that  include:  payout target, plan elements and payout
      timing on the various plan elements.

    

    Financial
      Schedules

     

    A
      financial schedule is developed for each financial element of the
      Plan.  The schedule sets forth the percent of goal that must be
      achieved for the corresponding payout percentage.  The financial
      schedule may be included on the Annual Plan Insert or provided as a separate
      document.

    

    Payouts

     

    To
      receive payouts, participants must be actively employed by PHH through the
      end
      of each payout period, as defined on each Annual Plan
      Insert.

    

    Termination
      of employment prior to the last day of each payout period for any reason other
      than death, disability, or retirement will lead to forfeiture of payment and/or
      repayment of any incentives paid, but not earned.  In the event of
      termination of employment for death, long-term disability, a leave of absence
      that results in an administrative separation due to the length of the leave
      or
      business need, or retirement, prorated payments may be made, with the review
      of
      case-by-case circumstances and the specific approval of the SVP Human
      Resources.  Participants with documented performance issues or on a
      Performance Improvement Plan at any time during the year may jeopardize their
      eligibility to receive a payout.

    

    Payouts
      to participants with unresolved PHH debt will be held until the debt is paid
      or,
      at PHH’s discretion, until an agreed-upon payment plan has been established. PHH
      has the right to deduct any unresolved debt from incentive plan
      payouts.

    

    Other
      Provisions

     

    As
      a
      condition of Plan participation and eligibility for any payout, the participant
      agrees to comply with the rules, regulations, policies and standards of business
      conduct of PHH, as well as the directions, assignments and instructions provided
      by PHH’s leadership. PHH has the authority at its discretion to withhold
      payment 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    in
      the
      case of violations of rules, regulations, policies and standards of the business
      including misconduct.

    

    This
      Plan
      is subject to approval by the President and Chief Executive Officer, the Senior
      Vice President, Finance, the Senior Vice President, Human Resources and the
      Compensation Committee of the PHH Corporation Board of Directors. The Plan
      is
      administered by the Director, Compensation.

    

    These
      leaders have the sole authority to interpret and execute the provisions of
      the
      Plan and make exceptions as warranted by special business
      circumstances.  All decisions, actions or interpretations are final,
      conclusive and binding to all parties.

    

    PHH
      reserves the right to terminate, amend, modify and/or restate this Plan (in
      whole or in part) at any time and without advance notice.

    

    This
      Plan, or any action taken in connection with it, does not give the participant
      the right to be retained as an employee with PHH.  No person eligible
      to receive payouts shall have any rights to pledge, assign, or otherwise dispose
      of any unpaid or anticipated Plan payments.

    

    This
      Plan
      document is the exclusive property of PHH and must be surrendered to PHH in
      the
      event of termination of employment.

    

    
      	
               

            
	
              George
                J. Kilroy

            
	
              President
                & CEO

            
	 
	 
	
               

            
	
              Rita
                L. Ennis

            
	
              Sr.
                Vice President Human Resources

            
	 
	 
	
               

            
	
              William
                R. Keenan

            
	
              Sr.
                Vice President Finance

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      C

    

    Named
      Executive Officers under the 2007 Incentive Plans

    

    

    
      	
              Executive

            	
              Position

            	
              Plan

            	
              Target
                Payout

              (%
                of Base Salary)

            	
              Target

              Payout
                Amount

            
	 	 	 	 	 
	
              George
                J. Kilroy

            	
              President
                and Chief Executive Officer – PHH Arval

            	
              PHH
                Arval 2007 

              Incentive
                Plan

            	
              100%

            	
              $450,000

            
	 	 	 	 	 
	
              Mark
                R. Danahy

            	
              Senior
                Vice President and Chief Financial Officer – PHH Mortgage

            	
              PHH
                Mortgage 2007 

              Incentive
                Plan

            	
              75%

            	
              $264,000ex10-2.htm

     

    Exhibit
      10.2

    Form
      of PHH Corporation Retention Agreement for Certain Executive Officers as
      approved by the PHH Corporation Compensation Committee on June 7,
      2007.

    

    _______,
      2007

    

    

    _______

    (Personally
      Presented)

    

    Dear
      ______:

    

    This
      document outlines the
      administrative guidelines associated with a retention bonus that PHH is
      providing to you (the “Special Retention Bonus”).  In this document,
“PHH” means PHH Corporation, its current and future owners, and
      subsidiaries.  The Special Retention Bonus is contingent upon your
      continued compliance with the terms and conditions set forth
      herein.  Additionally, in order to be eligible to receive the Special
      Retention Bonus, you must agree to the terms and conditions in this letter
      agreement by signing it and returning it to Heather Dalton no later than _____,
      2007.

    

    1.           Special
      Retention Bonus.  The Special Retention Bonus Agreement (“letter
      agreement”) consists of one payment (the “Payment”) of your annual target bonus
      for 2007, in an amount equal to $_______, which amount shall
      be pro-rated through the Effective Time of the Merger (the
      date on which the merger closes and becomes effective, as more fully defined
      in
      the Agreement and Plan of Merger dated as of March 15, 2007 by and among PHH
      Corporation, General Electric Capital Corporation and Jade Merger Sub, Inc.
      (the
“Merger Agreement”)).  Subject to your compliance with the terms of
      this letter agreement, PHH agrees to pay you the Special Retention Bonus as
      soon
      as practicable following the earlier of the Effective Time of the Merger and
      December 31, 2007, (the earlier of such two dates referred to as the “Retention
      Date”) provided that you (i) are employed by PHH on the Retention Date or
      (ii) incur a Qualifying Separation from Service with PHH before the Retention
      Date and execute the General Release substantially in the form attached hereto
      as Exhibit A and do not revoke such General Release as set forth
      therein.

    

    Your
      eligibility for the Special Retention Bonus is determined based on your
      satisfactory job performance and your compliance with the terms of this letter
      agreement.

    

    2.           Definitions.  For
      purposes of this letter agreement, the following terms have the following
      definitions:

    

    (a)           “Qualifying
      Separation from Service” has the meaning provided within Section 409A of the
      Internal Revenue Code of 1986 (the “Code”), which includes a termination of
      employment as a result of any (i) involuntary termination of employment other
      than for Cause, or (ii) voluntary termination of employment by you as a result
      of any (I) change in the required location of your employment as of the date
      of
      this letter agreement in excess of 20 miles, (II) material diminution in your
      duties or responsibilities as of the date of this letter agreement, provided
      that the mere occurrence of the Merger, the Mortgage Business Sale (as defined
      in the Merger Agreement) and other transactions contemplated by the Merger
      Agreement or the Mortgage Business Sale Agreement (including the failure of
      you
      to (x) retain responsibilities and duties in respect of either the Mortgage
      Business or the Fleet Business (as defined in the Merger Agreement) or (y)
      hold
      a position in a public company) shall not constitute diminution in duties or
      responsibilities, or (III) reduction of your base salary or material reduction
      in compensation opportunity as of the date of this letter
      agreement.

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

    (b)           “Cause”
      means (i) a material failure to substantially perform your duties as an employee
      of PHH (other than failure resulting from incapacity due to physical or mental
      illness); (ii) any act of fraud, misappropriation, dishonesty, embezzlement
      or
      similar conduct against, or relating to the assets of, PHH; (iii) your
      conviction (or plea of nolo contendere) of a felony or any crime involving
      moral
      turpitude; (iv) repeated instances of negligence in the performance of your
      job
      or any instance of gross negligence in the performance of your duties as an
      employee of PHH or (v) any breach by you of any fiduciary obligation owed to
      PHH
      or any material element of PHH’s Code of Ethics, Code of Conduct or other
      applicable workplace policies.

    

    (c)           “Required
      Performance Standard” means performing your job duties for PHH to the best of
      your ability and in accordance with reasonable instructions and directions
      from
      your supervisor, and the reasonable workplace policies and procedures
      established by PHH, as applicable, from time to time.

    

    3.           Obligations.  You
      agree to maintain your performance at or above the Required Performance Standard
      during the term of this letter agreement.  You agree to all the
      Covenants and Other Terms specified.

    

    4.           Covenants.  You
      recognize and acknowledge that all information pertaining to the affairs,
      business, results of operations, accounting methods, practices and procedures,
      members, acquisition candidates, financial condition, clients, customers or
      other relationships of PHH, including without limitation the terms and
      conditions of this letter agreement (“Confidential Information”) is confidential
      and is a unique and valuable asset of PHH.  You will not, at any time,
      including following your separation from service with PHH, give to any person,
      firm, associate, corporation, or governmental agency any Confidential
      Information, except as may be required by law.  You will not make use
      of the Confidential Information for your own purposes or for the benefit of
      any
      person or organization other than PHH.  You will also use your best
      efforts to prevent the disclosure of Confidential Information by
      others.  You agree to continue to comply with the PHH Code of Ethics
      and all applicable workplace policies.  All records, memoranda, etc.
      relating to the business of PHH are confidential and will remain the property
      of
      PHH.  You shall return all PHH property to PHH within three days of
      the effective date of your separation from service.  If you
      violate the terms of this Section 4, PHH will be entitled, upon making the
      requisite showing, to, among other things, preliminary and/or permanent
      injunctive relief in any court of competent jurisdiction to restrain the breach
      of or otherwise to specifically enforce any of the covenants contained in this
      Section 4 without the necessity of showing any actual damage or that monetary
      damages would not provide an adequate remedy.  Such right to an
      injunction will be in addition to, and not in limitation of, any other rights
      or
      remedies PHH may have under this letter agreement.

    

    Providing
      a retention incentive such as this is a very unusual action by
      PHH.  As such, concurrent with providing the program, we require that
      you affirm certain understandings that have been in place between us to this
      time, and upon which PHH will continue to rely.  They are described
      below.  The Special Retention Bonus described in this letter agreement
      is subject to and contingent upon your compliance with the
      covenants.  If it is determined by PHH that you have violated such
      covenants, in addition to any other remedies that PHH may have, your rights
      under this letter agreement to the Special Retention Bonus will be immediately
      and automatically forfeited, and PHH will have the right to receive from you
      reimbursement for the cost of any portion of the Special Retention Bonus that
      you have received.

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    PHH
      considers the fact of the letter agreement’s existence, your participation, and
      its details to be confidential and proprietary business information, subject
      to
      restriction under the PHH Code of Ethics.  You hereby agree that
      details of the Special Retention Bonus Agreement and the fact of your
      participation in it, will be kept confidential by you and will not be disclosed
      by you to any other third party (except to your spouse or as may be required
      in
      the furtherance of your relevant job duties as an employee of PHH with
      responsibility for accounting, tax, financial reporting and/or legal matters)
      without the express consent of PHH.

    

    5.           Other
      Terms.

    

    (a)  Withholding.  PHH
      retains the right to withhold from any amounts due under this letter agreement,
      any income, employment, payroll, excise and other taxes as PHH may, in its
      sole
      discretion, deem necessary.

    

    (b)  No
      Contract of Employment.  Nothing in this letter agreement should
      be construed by you to be a contract of employment and in no way obligates
      you
      to remain employed with PHH (and does not obligate such entities to continue
      to
      employ you).

    

    (c)  Notice
      and Opportunity to Cure.  Notwithstanding anything in Section 1 to
      the contrary, (i) no Payment shall be made in connection with any voluntary
      termination of employment described in clause (ii) of Section 2(a) unless you
      provide PHH with written notice of the existence of the condition described
      in
      clause (ii) no later than 90 days after the initial existence of such condition
      is known to you and PHH fails to remedy such condition within 30 days of the
      date of such written notice; and (ii) no termination shall be deemed to be
      for
      Cause as described in clauses (i), (iv) or (v) of Section 2(b) unless PHH
      provides you with written notice of the existence of the conditions that
      constitute Cause no later than 90 days after the initial existence of such
      condition is known to PHH and you fail to remedy such condition within 30 days
      of the date of such written notice.

    

    (d)
      Arbitration.  Any dispute, controversy or claim arising under
      or in connection with this letter agreement shall be settled exclusively by
      arbitration, conducted before a panel of three arbitrators sitting in a location
      selected by you within fifty (50) miles from the location of your employment
      as
      of the date hereof, in accordance with the JAMS Employment Arbitration Rules
      and
      Procedures then in effect.  Judgment may be entered on the
      arbitrator’s award in any court having jurisdiction.  Any dispute,
      controversy or claim in connection with this letter agreement shall be reviewed
      based on the de novo standard of review with respect to any determinations
      made
      by PHH.  In the event that you substantially prevail in any such
      dispute, controversy or claim, all costs and reasonable attorneys’ fees paid or
      incurred by you in connection with such dispute, controversy or claim shall
      be
      paid or reimbursed by PHH.

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    (e)
      Amendment and Termination.  This letter agreement may not be
      amended or terminated without written consent by both you and PHH.

    

    (f)  Facility
      of Payment.  If you are under legal disability or, in PHH’s
      reasonable opinion, are in any way incapacitated so as to be unable to manage
      your affairs, PHH may cause payments or benefits that would otherwise be
      provided to such person to be provided to your legal representative for his
      or
      her benefit or to be applied for the benefit of such person in any other manner
      that PHH may determine.  Such provision shall completely discharge the
      liability of PHH for payments and benefits hereunder.

    

    (g)  Notices.  Notices
      and all other communications provided for herein shall be in writing and shall
      be deemed to have been duly given when personally delivered or when mailed
      by
      United States certified mail, return receipt requested, or by overnight courier,
      postage prepaid, as follows:

     

    
      	
              a.  

            	
              if
                to the Company,

            

    

    

    
      	
               

            	
              PHH
                CORPORATION

            

    

    3000
      Leadenhall Road

    Mt.
      Laurel, New
      Jersey  08054

                                       
          Attn:  General
      Counsel

    

    
      	
              b.  

            	
              if
                to you, at the home address which you most recently communicated
                to PHH in
                writing.

            

    

     

    Either
      party may provide the other with notice of a change of address, which shall
      be
      effective upon receipt.

     

    (h)  Gender
      and Number. A pronoun or adjective in the masculine gen­der includes the
      feminine gender, the singular includes the plural and the plural includes the
      singular, unless the context clearly indicates otherwise.

     

    (i)
      Governing Law.  This letter agreement shall be construed,
      admin­istered and enforced in accordance with the laws of the [State of
      Maryland/New Jersey] to the extent not superseded by federal law.

     

    (j)  Integration
      with Other Benefit Programs.  Benefits payable under this letter
      agreement will not increase or decrease the benefits otherwise available to
      you
      under any of PHH’s retirement plans, welfare plans or any other employee benefit
      plans or programs unless otherwise expressly provided in any particular plan
      or
      program.

     

    (k)  Severability.  If
      any provision of this letter agreement shall be held to be invalid or
      unenforceable by a court of competent jurisdiction, then the remaining
      provisions of this letter agreement shall remain operative and in full force
      and
      effect. 

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (l)  Successors.  This
      letter agreement shall inure to the benefit of, and be binding upon, each
      successor of PHH, whether by merger, consolidation, transfer of all or
      substantially all of its assets or otherwise.

     

    (m)  Counterparts.  For
      convenience of the parties and to facilitate execution, this letter agreement
      may be executed in two or more counterparts, each of which shall be deemed
      an
      original, but all of which shall constitute one and the same document.
      Transmission by facsimile of an executed counterpart signature page hereof
      by a
      party hereto shall constitute due execution and delivery of this letter
      agreement by such party.

    

    If
      you have any questions about this
      letter agreement, you may contact Heather Dalton at (410) 771-2101.

    
 

    

    PHH
      CORPORATION

     

    _______________________________­­­­­­­­­

    By:

    Its:

    

    

    

    Agreed
      and Acknowledged:

    

    

    _________________________________

    [Executive’s
      Name]

    

    Date:
      ____________________________

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    GENERAL
      RELEASE

     

    THIS
      RELEASE (the “Release”) is entered into between
      _____________________(“Executive”) and PHH Corporation, a Maryland
      corporation (the “Company”), for the benefit of the
      Company.  The entering into and non-revocation of this Release is a
      condition to Executive’s right to receive the payments under the Special
      Retention Bonus Agreement.  Capitalized terms used and not defined
      herein shall  have the meaning provided in the Special Retention Bonus
      Agreement.

     

    Accordingly,
      Executive and the Company agree as follows.

     

    1.           IN
      CONSIDERATION FOR THE PAYMENTS AND OTHER BENEFITS PROVIDED TO EXECUTIVE BY
      THE
      SPECIAL RETENTION BONUS AGREEMENT, TO WHICH EXECUTIVE IS NOT OTHERWISE ENTITLED,
      AND THE SUFFICIENCY OF WHICH EXECUTIVE ACKNOWLEDGES, EXECUTIVE REPRESENTS AND
      AGREES, AS FOLLOWS:

     

    (a)           Executive,
      for himself, his heirs, administrators, representatives, executors, successors
      and assigns (collectively “Releasers”), hereby irrevocably and
      unconditionally releases, acquits and forever discharges and agrees not to
      sue
      the Company or any of its subsidiaries, divisions, affiliates and related
      entities and their respective current and former directors, officers,
      shareholders, trustees, employees, consultants, independent contractors,
      representatives, agents, servants, successors and assigns and all persons acting
      by, through or under or in concert with any of them (collectively
“Releasees”), from all rights and liabilities up to and including the
      date of this Release arising under or relating to the employment of the
      Executive and from any and all charges, complaints, claims, liabilities,
      obligations, promises, agreements, controversies, damages, actions, causes
      of
      actions, suits, rights, demands, costs, losses, debts and expenses of any nature
      whatsoever, known or unknown, suspected or unsuspected and any claims of
      wrongful discharge, breach of contract, implied contract, promissory estoppel,
      defamation, slander, libel, tortious conduct, employment discrimination or
      claims under any federal, state or local employment statute, law, order or
      ordinance, including any rights or claims arising under Title VII of the Civil
      Rights Act of 1964, as amended, the Age Discrimination in Employment Act of
      1967, as amended, 29 U.S.C. § 621 etseq. (“ADEA”), or any
      other federal, state or municipal ordinance relating to discrimination in
      employment.  Nothing contained herein shall restrict the parties’
rights to enforce the terms of this Release or the Special Retention Bonus
      Agreement.

     

     

    (b)           To
      the maximum extent permitted by law, Executive agrees that he/she has not filed,
      nor will he ever file, a lawsuit asserting any claims which are released by
      this
      Release, or to accept any benefit from any lawsuit which might be filed by
      another person or government entity based in whole or in part on any event,
      act,
      or omission which is the subject of this Release.

     

     

    (c)           This
      Release specifically excludes any claim for vested benefits to which the
      Executive may be entitled under any benefit plan or severance arrangement of
      the
      Company or any affiliate in which the Executive participates (the “Company
      Plans”).  The Executive’s entitlement to benefits under the
      Company Plans shall be determined in accordance with the provisions of those
      Company Plans.  This Release specifically excludes the Executive’s
      indemnification as an officer and employee of the Company or any affiliate
      thereof.  Nothing contained in this Release shall release the
      Executive from his/her obligations, including any obligations to abide by
      restrictive covenants under the Special Retention Bonus Agreement, that continue
      or are to be performed following termination of employment.

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

     

    (d)           Executive
      represents that he is not aware of any facts or circumstances that would give
      rise, based on his/her actions, to any claims or lawsuits against the Company
      or
      any Release.

     

     

    (e)           The
      parties agree that this Release shall not affect the rights and responsibilities
      of the US Equal Employment Opportunity Commission (hereinafter “EEOC”) to
      enforce ADEA and other laws.  In addition, the parties agree that this
      Release shall not be used to justify interfering with the Executive’s protected
      right to file a charge or participate in an investigation or proceeding
      conducted by the EEOC.  The parties further agree that the Executive
      knowingly and voluntarily waives all rights or claims (that arose prior to
      the
      Executive’s execution of this Release) the Releasers may have against the
      Releasees, or any of them, to receive any benefit or remedial relief (including,
      but not limited to, reinstatement, back pay, front pay, damages, attorneys’
fees, experts’ fees) as a consequence of any investigation or proceeding
      conducted by the EEOC.

     

     

    2.           The
      Executive acknowledges that the Company has specifically advised him/her of
      the
      right to seek the advice of an attorney concerning the terms and conditions
      of
      this Release.  The Executive further acknowledges receipt of a copy of
      this Release, and has been afforded twenty-one (21) days in which to consider
      the terms and conditions set forth above prior to this Release.  By
      executing this Release, the Executive affirmatively acknowledges sufficient
      and
      reasonable time to review this Release and to consult with an attorney
      concerning Executive’s legal rights prior to the final execution of this
      Release.  Executive has carefully read this Release and fully
      understands its terms.  The Executive understands that he/she may
      revoke this Release within seven (7) days after signing this
      Release.  Revocation of this Release must be made in writing and must
      be received by [__________________________________________] within the time
      period set forth above.

     

     

    3.           This
      Release will be governed by and construed in accordance with the laws of the
      State of [Maryland/New Jersey], without giving effect to any choice of law
      or
      conflicting provision or rule (whether of the State of [Maryland/New Jersey]
      or
      any other jurisdiction) that would cause the laws of any jurisdiction other
      than
      the State of [Maryland/New Jersey] to be applied.  In furtherance of
      the foregoing, the internal law of the State of [Maryland/New Jersey] will
      control the interpretation and construction of this agreement, even if under
      such jurisdiction’s choice of law or conflict of law analysis, the substantive
      law of some other jurisdiction would ordinarily apply. The provisions of this
      Release are severable, and if any part or portion of it is found to be
      unenforceable, the other paragraphs shall remain fully valid and
      enforceable.  This Release shall become effective and enforceable on
      the eighth day following its execution by Executive, provided he/she does not
      exercise his right of revocation as described above.  If Executive
      fails to sign this Release or revokes his signature, this Release will be
      without force or effect, and Executive shall not be entitled to the payment
      under the Special Retention Bonus Agreement.

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

     

    I,
      ___________________________, HAVING READ THE FOREGOING RELEASE, UNDERSTANDING
      ITS CONTENT AND HAVING HAD AN OPPORTUNITY TO CONSULT WITH COUNSEL OF MY CHOICE,
      DO HEREBY KNOWINGLY AND VOLUNTARILY SIGN THIS AGREEMENT, THEREBY WAIVING AND
      RELEASING MY CLAIMS, ON _______________________, 200_.

     

    

    ______________________________

    Executive

     

     

    
3

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