phh8k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_________________________________
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date
of Report (Date of earliest event reported): June 7,
2007
__________________________
PHH
CORPORATION
(Exact
name of registrant as specified in its charter)
|
MARYLAND
|
|
1-7797
|
|
52-0551284
|
|
(State
or other jurisdiction
of
incorporation)
|
|
(Commission
File Number)
|
|
(IRS
Employer
Identification
No.)
|
3000
Leadenhall Road
Mt.
Laurel, New Jersey 08054
(Address
of principal executive offices, including zip code)
(856)
917-1744
(Registrant’s
telephone number, including area code)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17 CFR 240.13e-4(c))
Item 2.02. Results
of Operations and Financial Condition.
On
June
13, 2007, PHH Corporation (“PHH”, “Company”, “we” or “us”) released certain key
operating metrics for the three months ended March 31, 2007 and liquidity
information as of March 31, 2007. A copy of the press release is
attached to this Current Report on Form 8-K (the “Form 8-K”) as Exhibit 99.1 and
is incorporated herein by reference.
The
information disclosed in this Item 2.02, including Exhibit 99.1 hereto, is
being
furnished and shall not be deemed “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, or otherwise subject to the
liabilities of Section 18, nor shall it be deemed incorporated by reference
into
any registration statement or other document pursuant to the Securities Act
of
1933, as amended, except to the extent, if any, expressly set forth in such
filing.
|
Item 5.02.
|
Departure
of Directors or Certain Officers; Election of Directors; Appointment
of
Certain Officers; Compensatory Arrangements of Certain
Officers.
|
On
June
7, 2007, the Compensation Committee (the “Committee”) of our Board of Directors
approved the performance targets for the PHH Mortgage Management Incentive
Plan
(the “Mortgage MIP”) and PHH Arval Management Incentive Plan (the “Fleet MIP”)
for 2007. The performance targets for the Mortgage MIP and the Fleet
MIP are based on the attainment of certain pre-tax income after minority
interest targets for the year ending December 31, 2007 for PHH Mortgage
Corporation (“PHH Mortgage”) and PHH Vehicle Management Services, LLC, doing
business as PHH Arval (“PHH Arval”), respectively. The Committee
determined that Mr. George J. Kilroy, President and Chief Executive Officer
of
PHH Arval, is a participant in the Fleet MIP with a target payout equal to
100%
of his base salary. In 2006, Mr. Kilroy had participated equally in
the Fleet MIP and the PHH Corporation Management Incentive Plan (the “PHH MIP”)
for 2006. Mr. Mark R. Danahy, Senior Vice President and Chief
Financial Officer of PHH Mortgage, is a participant in the Mortgage MIP with
a
target payout equal to 75% of his base salary. A copy of the
Committee resolution, including the Fleet MIP and Mortgage MIP, is attached
to
this Form 8-K as Exhibit 10.1 and is incorporated herein by
reference.
In
addition, the Committee considered the impact of the merger (the “Merger”)
between Jade Merger Sub, Inc., an indirect wholly owned subsidiary of General
Electric Capital Corporation, with and into the Company pursuant to 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”) on certain executive officers and the need to retain those
executive officers through the effective time of the Merger. Based on
these considerations, in lieu of the adoption of a PHH MIP for 2007, the
Committee approved retention bonuses and the form of retention agreement (the
“Retention Agreement”) in order to create an incentive for certain of our
executive officers to remain employed with us through the effective time of
the
Merger. The retention bonus will equal the executive officer’s target
payout under the PHH MIP expressed as a percentage of base salary, but will
be
pro-rated if the effective time of the Merger is prior to December 31,
2007. If a Termination Event (defined below) occurs prior to the
effective time of the Merger, the executive officer covered by a Retention
Agreement would also receive such retention bonus. On June 13, 2007,
we entered into a Retention Agreement with Mr. William F. Brown, Senior Vice
President, General Counsel and Secretary, to provide him with a retention bonus
of $150,000, equal to 50% of his base salary, subject to pro-ration as described
above. The foregoing description of the Retention Agreement does not
purport to be complete and is qualified in its entirety by reference to the
full
text of the agreement, which is filed as Exhibit 10.2 to this Form 8-K and
is
incorporated herein by reference.
On
June
7, 2007, the Committee also approved severance arrangements for certain
executive officers as permitted under the Merger Agreement, including the form
of severance agreement (the “Severance Agreement”), which provide
post-termination payments of severance to each executive officer in the event
that one of the following termination events (the “Termination Events”) occurs
on or prior to the first anniversary of the effective time of the Merger: (i)
the involuntary termination of employment other than for “cause” or “disability”
(as such terms are defined in the Severance Agreement) or (ii) the voluntary
termination of employment as a result of (a) a change in the required location
of the executive officer’s employment in excess of 20 miles, (b) the material
diminution of the executive officer’s duties and responsibilities as of the date
of the applicable Severance Agreement, subject to certain enumerated exceptions,
or (c) a reduction in the executive officer’s base salary or a material
reduction in compensation opportunity as of the date of the applicable Severance
Agreement. On June 13, 2007, we entered into Severance Agreements
with Messrs. Kilroy and Brown to provide such severance benefits. In
the event of a Termination Event occurring on or prior to the first anniversary
of the effective time of the Merger, Messrs. Kilroy and Brown would receive
$1,800,000 and $900,000, respectively, in a lump sum payment, subject to certain
conditions including, but not limited to, the execution of a general release
of
any claims against us and our affiliates. The foregoing description of the
Severance Agreement does not purport to be complete and is qualified in its
entirety by reference to the full text of the agreement, which is filed as
Exhibit 10.3 to this Form 8-K and is incorporated herein by
reference.
Item
9.01. Financial Statements and Exhibits.
(d) Exhibits
|
|
*
The information disclosed in Exhibit 99.1 hereto is being furnished
and
shall not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, or otherwise subject to the liabilities
of Section 18, nor shall it be deemed incorporated by reference into
any
registration statement or other document pursuant to the Securities
Act of
1933, as amended, except to the extent, if any, expressly set forth
in
such filing.
|
Forward-Looking
Statements
This
Form
8-K and the exhibits hereto contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. These statements
are subject to known and unknown risks, uncertainties and other factors which
may cause our actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. You should understand that
these statements are not guarantees of performance or results and are
preliminary in nature. Statements preceded by, followed by or that otherwise
include the words “believes”, “expects”, “anticipates”, “intends”, “projects”,
“estimates”, “plans”, “may increase”, “may result”, “will result”, “may
fluctuate” and similar expressions or future or conditional verbs such as
“will”, “should”, “would”, “may” and “could” are generally forward-looking in
nature and not historical facts.
You
should consider the areas of risk described under the heading “Cautionary Note
Regarding Forward-Looking Statements” in our periodic reports under the
Securities Exchange Act of 1934, as amended, and those risk factors included
as
“Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended
December 31, 2006, in connection with any forward-looking statements that may
be
made by us and our businesses generally. Except for our ongoing
obligations to disclose material information under the federal securities laws,
we undertake no obligation to release publicly any updates or revisions to
any
forward-looking statements, to report events or to report the occurrence of
unanticipated events unless required by law.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
|
PHH
CORPORATION
|
|
|
|
|
|
|
|
|
By: /s/
Clair M. Raubenstine
|
|
|
|
Name:
Clair
M. Raubenstine
|
|
|
Title:
Executive
Vice President and Chief Financial Officer
|
|
|
|
|
|
Dated: June
13, 2007
|
|