PHH FORM 8K
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): December 21,
2005
PHH
CORPORATION
(Exact
name of registrant as specified in its charter)
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MARYLAND
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1-7797
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52-0551284
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(State
or other jurisdiction
of
incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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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))
Amendment
and Restatement of Tax Sharing Agreement
On
December 21, 2005, PHH Corporation (the “Company”) amended
and restated the Tax Sharing Agreement between the Company and Cendant
Corporation (“Cendant”) dated as of January 31, 2005. The Tax Sharing Agreement
was entered into as part of the Company’s spin-off from Cendant on February 1,
2005 (the “Spin-Off”). The Amended and Restated Tax Sharing Agreement dated as
of December 21, 2005 clarifies that Cendant shall be responsible for tax
liabilities and potential tax benefits for certain tax returns and time periods.
A copy of the Amended and Restated Tax Sharing Agreement is attached hereto
and
incorporated herein by reference as Exhibit 10.1.
The
Amended and Restated Tax Sharing Agreement clarifies that Cendant is responsible
for separate state taxes on a significant number of the Company’s income tax
returns for years 2003 and prior. Pursuant to the Amended and Restated Tax
Sharing Agreement, the Company will coordinate with Cendant on federal and
state
audits, but shall not be responsible for any liabilities that may result from
such audits. The Company is unable to calculate the potential financial impact
of such federal and state audits at this time.
Amendment
of Performance Targets under 2005 Equity and Incentive
Plan
On
December 21, 2005, the Compensation Committee of the Board of Directors (the
“Committee”) approved modifications to the 2006 through 2008 performance targets
established for certain equity awards previously issued under the 2005 Equity
and Incentive Plan, as amended (the “Plan”). The performance targets previously
established by the Committee for the vesting or acceleration of vesting of
these
equity awards were based on net income growth and return on equity targets
for
each fiscal year.
In
connection with the Spin-Off, the Company underwent an internal reorganization
which resulted in the distribution of the Company’s relocation and fuel card
businesses to Cendant, the contribution of the appraisal services business
from
Cendant to the Company, and a recapitalization of the Company. Following the
Spin-Off, the Company modified and updated its financial statements to reflect
discontinued operations and its business operations following the Spin-Off
as
well as Cendant’s minority interest in the Mortgage Venture.
In
recognition of the unusual, non-recurring nature of the Spin-Off, the Committee
previously determined that it was appropriate to modify the 2005 performance
targets previously established for the vesting and acceleration of vesting
of
certain equity awards previously issued under the Plan to require the
achievement only of one performance target based on the Company’s fiscal 2005
pre-tax income after minority interest, excluding Spin-Off related expenses.
Upon further consideration of the performance targets for the remaining fiscal
years of these award agreements, the Committee determined that it was
appropriate to modify the performance targets for the remaining fiscal years
(fiscal 2006 through 2008) for the vesting and acceleration of vesting of these
equity awards issued under the Plan to require the achievement of only pre-tax
income after minority interest, excluding certain items that are one-time or
unusual in nature as determined in the discretion of the Committee, for each
of
the remaining fiscal years consistent with the previous amendment of the
performance targets for fiscal 2005. The specific award agreements as modified
establish the terms and conditions for vesting of equity awards upon the
achievement of this performance target. The resolution of the Committee and
modifications of the award agreements to reflect the modified performance target
are attached hereto as Exhibits 10.2, 10.3, 10.4 and 10.5 and are incorporated
herein by reference.
Item
9.01. Financial Statements and Exhibits.
(c) Exhibits
10.1‡ Amended
and Restated Tax Sharing Agreement dated as of December 21, 2005 between PHH
Corporation and Cendant Corporation.
10.2 Resolution
of the PHH Corporation Compensation Committee dated December 21, 2005
modifying fiscal 2006 through 2008 performance targets for
equity awards under the 2005 Equity and Incentive Plan.
10.3‡ Form
of
Vesting Schedule Modification for PHH Corporation Restricted Stock Unit
Conversion Award Agreement.
10.4‡ Form
of
Accelerated Vesting Schedule Modification for PHH Corporation Restricted Stock
Unit Award Agreement.
10.5‡ Form
of
Accelerated Vesting Schedule Modification for PHH Corporation Non-Qualified
Stock Option Award Agreement.
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‡
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Confidential
treatment has been requested for certain portions of these Exhibits
pursuant to Rule 24b-2 of the Exchange Act which portions have been
omitted and filed separately with the
Commission.
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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.
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PHH
CORPORATION
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By:
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/s/
Neil J. Cashen
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Name:
Neil
J. Cashen
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Title:
Executive
Vice President and Chief Financial Officer
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Dated:
December 28, 2005
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