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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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MARYLAND
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52-0551284
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification Number)
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3000 LEADENHALL ROAD
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08054
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MT. LAUREL, NEW JERSEY
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(Zip Code)
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(Address of principal executive offices)
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TABLE OF CONTENTS
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Page
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▪
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our expectations related to our actions resulting from our strategic review, including the estimated impacts on our results, the timing of any such actions, our estimates of transaction, operating losses and exit costs, the amount and our expected use of any proceeds, and any other anticipated impacts on our results, client and counterparty relationships, debt arrangements, employee relations or expected value to shareholders;
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▪
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our expectations and projected financial results of the remaining business after executing the actions resulting from our strategic review, the market for subservicing and portfolio retention services, our competitive position, and the expected profitability and capital structure of our remaining business;
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the method, amounts and timing of any capital returns to shareholders;
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anticipated future origination volumes and loan margins in the mortgage industry;
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our expectations of the impacts of regulatory changes on our business;
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our assessment of legal and regulatory proceedings and the associated impact on our financial statements;
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our expectations around future losses from representation and warranty claims, and associated reserves and provisions; and
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the impact of the adoption of recently issued accounting pronouncements on our financial statements.
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the effects of our strategic actions, and any associated transactions, on our business, management resources, customer, counterparty and employee relationships, capital structure and financial position;
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▪
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our ability to execute and complete the actions resulting from our strategic review and implement changes to meet our operational and financial objectives, including restructuring our remaining business and shared services platform, achieving our growth objectives and assumptions and resolving our legacy legal and regulatory matters;
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▪
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any failure to execute all or any portion of the sales of MSRs under our existing agreements, or realize estimated proceeds from the transactions, which may be driven by the following reasons, among other factors: (i) not receiving required shareholder, regulatory, investor, agency, private loan investor and/or client (originations source) approvals for any portion of the sale portfolio; (ii) changes in the composition of the portfolio and related servicing advances outstanding on each sale date; and (iii) not meeting any other conditions precedent to closing, as defined in the respective agreements;
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▪
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any failure to execute the sale of certain assets of PHH Home Loans and its subsidiaries, or realize estimated proceeds from the transactions, which may be driven by the following reasons, among other factors: (i) not receiving required shareholder, regulatory and agency approvals; (ii) the failure to execute a certain portion of the New Residential MSR sales; and (iii) not meeting any other conditions precedent to closing, as defined in the respective agreements;
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▪
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available excess cash from our strategic actions is dependent upon a variety of factors, including the execution of the sale of all of our MSRs, the monetization of our investment in PHH Home Loans, the successful completion of our PLS exit activities at a certain total expense, the resolution of our outstanding legal and regulatory matters and the successful completion of other restructuring and capital management activities, including any unsecured debt repayments, in accordance with our assumptions;
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▪
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our decisions regarding whether to use, and the use of, derivatives and hedge strategies related to our mortgage servicing rights;
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the effects of any termination of our subservicing agreements by any of our largest subservicing clients or on a material portion of our subservicing portfolio;
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the effects of market volatility or macroeconomic changes and financial market regulations on the availability and cost of our financing arrangements, the value of our assets and the housing market;
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▪
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the effects of changes in current interest rates on our business, the value of our mortgage servicing rights and our financing costs;
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▪
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the impact of changes in the U.S. financial condition and fiscal and monetary policies, or any actions taken or to be taken by the U.S. Department of the Treasury and the Board of Governors of the Federal Reserve System on the credit markets and the U.S. economy;
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▪
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the effects of any significant adverse changes in the underwriting criteria or the existence or programs of government-sponsored entities, such as Fannie Mae and Freddie Mac, including any changes caused by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other actions of the federal government;
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▪
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the ability to maintain our status as a government sponsored entity-approved seller and servicer, including the ability to continue to comply with the respective selling and servicing guides, and our ability to operationalize changes necessary to comply with updates to such guides and programs;
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the effects of changes in, or our failure to comply with, laws and regulations, including mortgage- and real estate-related laws and regulations and those that we are exposed to through our private label relationships;
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the effects of the outcome or resolutions of any inquiries, investigations or appeals related to our mortgage origination or servicing activities, any litigation related to our mortgage origination or servicing activities, or any related fines, penalties and increased costs, and the associated impact on our liquidity;
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the ability to maintain our relationships with our existing clients, including our ability to comply with the terms of our private label and subservicing client agreements and any related service level agreements;
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the inability or unwillingness of any of the counterparties to our significant customer contracts, hedging agreements, or financing arrangements to perform their respective obligations under such contracts, or to renew on terms favorable to us, if at all;
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the impacts of our credit ratings, including the impact on our cost of capital and ability to access the debt markets, as well as on our current or potential customers’ assessment of our long-term stability;
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the ability to obtain or renew financing on acceptable terms, if at all, to finance our mortgage loans held for sale and servicing advances;
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the ability to operate within the limitations imposed by our financing arrangements and to maintain or generate the amount of cash required to service our indebtedness and operate our business;
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any failure to comply with covenants or asset eligibility requirements under our financing arrangements; and
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the effects of any failure in or breach of our technology infrastructure, or those of our outsource providers, or any failure to implement changes to our information systems in a manner sufficient to comply with applicable laws, regulations and our contractual obligations.
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Item 1. Financial Statements
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Three Months Ended
March 31, |
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2017
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2016
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REVENUES
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Origination and other loan fees
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$
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44
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$
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61
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Gain on loans held for sale, net
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42
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48
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Net loan servicing income:
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Loan servicing income
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62
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91
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Change in fair value of mortgage servicing rights
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(29
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)
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(121
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)
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Net derivative gain related to mortgage servicing rights
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—
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85
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Net loan servicing income
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33
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55
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Net interest expense:
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Interest income
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9
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9
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Secured interest expense
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(6
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)
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(8
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)
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Unsecured interest expense
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(10
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)
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(10
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)
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Net interest expense
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(7
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)
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(9
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)
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Other income
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2
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2
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Net revenues
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114
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157
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EXPENSES
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Salaries and related expenses
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86
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90
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Commissions
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11
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12
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Loan origination expenses
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9
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16
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Foreclosure and repossession expenses
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7
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7
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Professional and third-party service fees
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37
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39
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Technology equipment and software expenses
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9
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10
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Occupancy and other office expenses
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9
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13
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Depreciation and amortization
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4
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4
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Exit and disposal costs
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25
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—
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Other operating expenses
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22
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15
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Total expenses
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219
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206
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Loss before income taxes
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(105
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)
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(49
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)
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Income tax benefit
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(34
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)
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(19
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)
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Net loss
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(71
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)
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(30
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)
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Less: net loss attributable to noncontrolling interest
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(4
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)
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—
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Net loss attributable to PHH Corporation
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$
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(67
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)
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$
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(30
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)
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Basic and Diluted loss per share attributable to PHH Corporation
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$
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(1.26
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)
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$
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(0.56
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)
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Three Months Ended
March 31, |
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2017
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2016
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Net loss
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$
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(71
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)
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$
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(30
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)
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Total comprehensive loss
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$
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(71
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)
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$
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(30
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)
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Less: comprehensive loss attributable to noncontrolling interest
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(4
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)
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—
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Comprehensive loss attributable to PHH Corporation
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$
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(67
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)
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$
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(30
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)
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March 31,
2017 |
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December 31,
2016 |
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ASSETS
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Cash and cash equivalents
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$
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936
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$
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906
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Restricted cash
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64
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57
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Mortgage loans held for sale
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471
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683
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Accounts receivable, net
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61
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66
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Servicing advances, net
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599
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628
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Mortgage servicing rights
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596
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690
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Property and equipment, net
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32
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36
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Other assets
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92
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109
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Total assets
(1)
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$
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2,851
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$
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3,175
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LIABILITIES
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Accounts payable and accrued expenses
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$
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185
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$
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193
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Subservicing advance liabilities
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271
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|
|
290
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Debt, net
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1,083
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1,262
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Deferred taxes, net
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69
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|
101
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Loan repurchase and indemnification liability
|
43
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|
49
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Other liabilities
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149
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|
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157
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Total liabilities
(1)
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1,800
|
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|
2,052
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Commitments and contingencies (Note 10)
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EQUITY
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Preferred stock, $0.01 par value; 1,090,000 shares authorized;
none issued or outstanding
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—
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—
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Common stock, $0.01 par value; 273,910,000 shares authorized;
53,612,801 shares issued and outstanding at March 31, 2017;
53,599,433 shares issued and outstanding at December 31, 2016
|
1
|
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|
1
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Additional paid-in capital
|
886
|
|
|
887
|
|
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Retained earnings
|
147
|
|
|
214
|
|
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Accumulated other comprehensive loss
(2)
|
(10
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)
|
|
(10
|
)
|
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Total PHH Corporation stockholders’ equity
|
1,024
|
|
|
1,092
|
|
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Noncontrolling interest
|
27
|
|
|
31
|
|
||
Total equity
|
1,051
|
|
|
1,123
|
|
||
Total liabilities and equity
|
$
|
2,851
|
|
|
$
|
3,175
|
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(1)
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The Condensed Consolidated Balance Sheets include assets and liabilities of variable interest entities which can be used only to settle the obligations and liabilities of the variable interest entities which creditors or beneficial interest holders do not have recourse to PHH Corporation and subsidiaries. These assets and liabilities are as follows:
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March 31,
2017 |
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December 31,
2016 |
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ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
70
|
|
|
$
|
67
|
|
Restricted cash
|
28
|
|
|
24
|
|
||
Mortgage loans held for sale
|
254
|
|
|
350
|
|
||
Accounts receivable, net
|
7
|
|
|
9
|
|
||
Servicing advances, net
|
140
|
|
|
150
|
|
||
Property and equipment, net
|
1
|
|
|
1
|
|
||
Other assets
|
13
|
|
|
12
|
|
||
Total assets
|
$
|
513
|
|
|
$
|
613
|
|
|
|
|
|
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LIABILITIES
|
|
|
|
|
|
||
Accounts payable and accrued expenses
|
$
|
13
|
|
|
$
|
11
|
|
Debt
|
316
|
|
|
399
|
|
||
Other liabilities
|
5
|
|
|
5
|
|
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Total liabilities
|
$
|
334
|
|
|
$
|
415
|
|
(2)
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Includes amounts recorded related to the Company’s defined benefit pension plan, net of income tax benefits of
$6 million
as of both
March 31, 2017
and
December 31, 2016
. During both the
three
months ended
March 31, 2017
and
March 31, 2016
, there were no amounts reclassified out of Accumulated other comprehensive loss.
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PHH Corporation Stockholders’ Equity
|
|
|
|
|
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Common Stock
|
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Additional
Paid-In
Capital
|
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Retained
Earnings
|
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Accumulated
Other
Comprehensive
Loss
|
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Noncontrolling
Interest
|
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Total
Equity
|
|||||||||||||||
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Shares
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Amount
|
|
|
|
|
|
||||||||||||||||||
Three Months Ended March 31, 2017
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Balance at December 31, 2016
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53,599,433
|
|
|
$
|
1
|
|
|
$
|
887
|
|
|
$
|
214
|
|
|
$
|
(10
|
)
|
|
$
|
31
|
|
|
$
|
1,123
|
|
Total comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(67
|
)
|
|
—
|
|
|
(4
|
)
|
|
(71
|
)
|
||||||
Stock compensation expense
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||||
Reclassification of stock awards
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
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Stock issued under share-based payment plans
|
13,368
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance at March 31, 2017
|
53,612,801
|
|
|
$
|
1
|
|
|
$
|
886
|
|
|
$
|
147
|
|
|
$
|
(10
|
)
|
|
$
|
27
|
|
|
$
|
1,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Three Months Ended March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance at December 31, 2015
|
55,007,983
|
|
|
$
|
1
|
|
|
$
|
911
|
|
|
$
|
416
|
|
|
$
|
(10
|
)
|
|
$
|
30
|
|
|
$
|
1,348
|
|
Total comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
||||||
Stock compensation expense
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Stock issued under share-based payment plans
|
18,580
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Repurchase of Common stock
|
(1,508,772
|
)
|
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
||||||
Balance at March 31, 2016
|
53,517,791
|
|
|
$
|
1
|
|
|
$
|
889
|
|
|
$
|
386
|
|
|
$
|
(10
|
)
|
|
$
|
30
|
|
|
$
|
1,296
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net loss
|
$
|
(71
|
)
|
|
$
|
(30
|
)
|
Adjustments to reconcile Net loss to net cash provided by operating activities:
|
|
|
|
|
|
||
Capitalization of originated mortgage servicing rights
|
(11
|
)
|
|
(13
|
)
|
||
Net loss on mortgage servicing rights and related derivatives
|
29
|
|
|
36
|
|
||
Origination of mortgage loans held for sale
|
(1,735
|
)
|
|
(2,150
|
)
|
||
Proceeds on sale of and payments from mortgage loans held for sale
|
2,009
|
|
|
2,221
|
|
||
Net gain on interest rate lock commitments, mortgage loans held for sale and related derivatives
|
(53
|
)
|
|
(53
|
)
|
||
Depreciation and amortization
|
4
|
|
|
4
|
|
||
Deferred income tax benefit
|
(32
|
)
|
|
(38
|
)
|
||
Other adjustments and changes in other assets and liabilities, net
|
52
|
|
|
44
|
|
||
Net cash provided by operating activities
|
192
|
|
|
21
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
||
Net cash (paid) received on derivatives related to mortgage servicing rights
|
(46
|
)
|
|
79
|
|
||
Proceeds on sale of mortgage servicing rights
|
71
|
|
|
2
|
|
||
Purchases of property and equipment
|
—
|
|
|
(7
|
)
|
||
Increase in restricted cash
|
(7
|
)
|
|
(6
|
)
|
||
Other, net
|
—
|
|
|
6
|
|
||
Net cash provided by investing activities
|
18
|
|
|
74
|
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from secured borrowings
|
1,907
|
|
|
2,570
|
|
||
Principal payments on secured borrowings
|
(2,087
|
)
|
|
(2,609
|
)
|
||
Repurchase of Common stock
|
—
|
|
|
(23
|
)
|
||
Cash paid for debt issuance costs
|
—
|
|
|
(2
|
)
|
||
Net cash used in financing activities
|
(180
|
)
|
|
(64
|
)
|
||
|
|
|
|
||||
Net increase in Cash and cash equivalents
|
30
|
|
|
31
|
|
||
Cash and cash equivalents at beginning of period
|
906
|
|
|
906
|
|
||
Cash and cash equivalents at end of period
|
$
|
936
|
|
|
$
|
937
|
|
1. Summary of Significant Accounting Policies
|
•
|
Accounting for income taxes.
The Company recognized all excess tax benefits and tax deficiencies as income tax expense or benefit in the statement of income and applied this provision prospectively. The tax effects were treated as
|
•
|
Forfeiture rates.
The Company elected to account for forfeitures as they occur and applied this provision using a modified retrospective approach. The impact to opening retained earnings was not significant.
|
•
|
Statement of Cash Flows.
The Company classified cash paid by an employer when directly withholding shares for tax withholding purposes as a financing activity and applied this provision using a retrospective approach. In addition, the Company will classify excess tax benefits as an operating activity and apply this provision using a prospective approach. The impact to the statement of cash flows from the adoption of these provisions was not significant.
|
•
|
In May 2014, the FASB issued ASU 2014-9, “Revenue from Contracts with Customers.” The core principle requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects consideration to which the company expects to be entitled in exchange for those goods or services. The FASB has issued several amendments to provide additional clarification and implementation instructions relating to (i) principal versus agent considerations, (ii) identifying performance obligations and licensing, (iii) narrow-scope improvements and practical expedients and (iv) technical corrections and improvements. These updates are to be applied retrospectively to all prior periods presented or through a cumulative adjustment in the year of adoption, and are effective for interim and annual periods beginning after December 15, 2017 with early adoption permitted.
|
•
|
In March 2017, the FASB issued ASU 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost". This update changes the income statement presentation of defined benefit plan expense by requiring the service cost component to be presented in the same line item as other compensation costs and all other components (including interest cost, amortization of prior service cost, settlements, etc.) to be presented separately from the service cost component. This update is effective for the first interim and annual periods beginning after December 15, 2017, with early adoption permitted. At adoption, this update will be applied retrospectively. The Company's defined benefit pension plan and the other post-employment benefits plan are frozen, wherein the plans only accrue additional benefits for a very limited number of employees. As a result, the Company does not expect the adoption to have significant impact on its financial statements.
|
2. Exit Costs
|
|
Three Months Ended March 31, 2017
|
||||||||||||||
|
Severance and Termination Benefits
|
|
Facility Exit Costs
|
|
Contract Termination & Other Costs
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Balance, beginning of period
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
25
|
|
Charges
|
21
|
|
|
4
|
|
|
—
|
|
|
25
|
|
||||
Paid
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
||||
Adjustments
(1)
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Balance, end of period
|
$
|
47
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
50
|
|
(1)
|
This adjustment represents previously accrued amounts of existing retention and incentive awards for exiting employees that will be paid out upon termination.
|
|
Three Months Ended March 31, 2017
|
||||||||||||||||||
|
Severance and Termination Benefits
|
|
Facility Exit Costs
|
|
Contract Termination & Other Costs
|
|
Asset Impairment
|
|
Total
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Costs incurred this period
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8
|
|
Cumulative costs recognized in prior periods
|
22
|
|
|
—
|
|
|
4
|
|
|
15
|
|
|
41
|
|
|||||
Estimate of remaining costs
(1)
|
9
|
|
|
21
|
|
|
26
|
|
|
—
|
|
|
56
|
|
|||||
Total
|
$
|
35
|
|
|
$
|
25
|
|
|
$
|
30
|
|
|
$
|
15
|
|
|
$
|
105
|
|
(1)
|
In May 2017, the Company incurred
$8 million
of contract termination costs related to a PLS client termination agreement.
|
|
|
Mortgage Production
|
|
Other
|
|
Total
|
||||||
|
|
(In millions)
|
||||||||||
Costs incurred this period
|
|
$
|
7
|
|
|
$
|
1
|
|
|
$
|
8
|
|
Cumulative costs recognized in prior periods
|
|
33
|
|
|
8
|
|
|
41
|
|
|||
Estimate of remaining costs
|
|
48
|
|
|
8
|
|
|
56
|
|
|||
Total
|
|
$
|
88
|
|
|
$
|
17
|
|
|
$
|
105
|
|
|
Three Months Ended March 31, 2017
|
||||||||||||||
|
Severance and Termination Benefits
|
|
Facility Exit Costs
|
|
Contract Termination & Other Costs
|
|
Total
(1)
|
||||||||
|
(In millions)
|
||||||||||||||
Costs incurred this period
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17
|
|
Cumulative costs recognized in prior periods
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Estimate of remaining costs
|
23
|
|
|
5
|
|
|
5
|
|
|
33
|
|
||||
Total
|
$
|
40
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
50
|
|
(1)
|
Exit Costs related to our Reorganization include amounts attributable to noncontrolling interest, representing
$1 million
of Costs incurred this period, and
$10 million
of Total program costs. Refer to
Note 12, 'Variable Interest Entities'
for further information regarding our agreements to sell certain assets of PHH Home Loans and its subsidiaries and exit the Real Estate channel.
|
|
Mortgage Production
|
|
Mortgage Servicing
|
|
Other
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Costs incurred this period
|
$
|
6
|
|
|
$
|
2
|
|
|
$
|
9
|
|
|
$
|
17
|
|
Cumulative costs recognized in prior periods
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Estimate of remaining costs
|
24
|
|
|
—
|
|
|
9
|
|
|
33
|
|
||||
Total
|
$
|
30
|
|
|
$
|
2
|
|
|
$
|
18
|
|
|
$
|
50
|
|
3. Earnings Per Share
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In millions, except share and per share data)
|
||||||
Net loss attributable to PHH Corporation
|
$
|
(67
|
)
|
|
$
|
(30
|
)
|
Weighted-average common shares outstanding — basic & diluted
|
53,682,514
|
|
|
53,703,229
|
|
||
Basic and Diluted loss per share attributable to PHH Corporation
|
$
|
(1.26
|
)
|
|
$
|
(0.56
|
)
|
|
Three Months Ended
March 31, |
||||
|
2017
|
|
2016
|
||
Outstanding stock-based compensation awards
(1)
|
973,788
|
|
|
1,316,861
|
|
(1)
|
For the
three
months ended
March 31, 2017
, excludes
297,523
shares that are contingently issuable for which the contingency has not been met.
|
4. Servicing Activities
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
(In millions)
|
||||||
Capitalized MSRs
|
$
|
71,808
|
|
|
$
|
84,657
|
|
Subserviced
|
91,123
|
|
|
89,170
|
|
||
Other owned servicing
|
695
|
|
|
815
|
|
||
Total
|
$
|
163,626
|
|
|
$
|
174,642
|
|
|
March 31, 2017
|
||||||
|
UPB
|
|
Fair Value
|
||||
|
(In millions)
|
||||||
MSR commitments:
|
|
|
|
||||
New Residential Investment Corp.
|
$
|
66,993
|
|
|
$
|
554
|
|
Lakeview Loan Servicing, LLC
|
2,707
|
|
|
18
|
|
||
Other counterparties
|
49
|
|
|
1
|
|
||
Non-committed
|
2,059
|
|
|
23
|
|
||
Total MSRs
|
$
|
71,808
|
|
|
$
|
596
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Balance, beginning of period
|
$
|
84,657
|
|
|
$
|
98,990
|
|
Additions
|
926
|
|
|
1,353
|
|
||
Payoffs and curtailments
|
(3,459
|
)
|
|
(3,955
|
)
|
||
Sales
|
(10,316
|
)
|
|
(272
|
)
|
||
Balance, end of period
|
$
|
71,808
|
|
|
$
|
96,116
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Balance, beginning of period
|
$
|
690
|
|
|
$
|
880
|
|
Additions
|
11
|
|
|
13
|
|
||
Sales
|
(76
|
)
|
|
(2
|
)
|
||
Changes in fair value due to:
|
|
|
|
|
|
||
Realization of expected cash flows
|
(27
|
)
|
|
(26
|
)
|
||
Changes in market inputs or assumptions used in the valuation model
|
(2
|
)
|
|
(95
|
)
|
||
Balance, end of period
|
$
|
596
|
|
|
$
|
770
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Servicing fees from capitalized portfolio
|
$
|
54
|
|
|
$
|
70
|
|
Late fees
|
4
|
|
|
3
|
|
||
Other ancillary servicing revenue
(1)
|
(4
|
)
|
|
3
|
|
(1)
|
For the
three
months ended
March 31, 2017
, Other ancillary servicing revenue includes transaction costs and other related expenses of the February 2017 Lakeview sale of GNMA MSRs.
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Proceeds from new loan sales or securitizations
|
$
|
950
|
|
|
$
|
1,396
|
|
Servicing fees from capitalized portfolio
(1)
|
54
|
|
|
70
|
|
||
Purchases of previously sold loans
(2)
|
(8
|
)
|
|
(128
|
)
|
||
Servicing advances
(3)
|
(389
|
)
|
|
(452
|
)
|
||
Repayment of servicing advances
(3)
|
418
|
|
|
478
|
|
(1)
|
Excludes late fees and other ancillary servicing revenue.
|
(2)
|
Includes purchases of repurchase eligible loans and excludes indemnification payments to investors and insurers of the related mortgage loans.
|
(3)
|
Outstanding servicing advance receivables are presented in Servicing advances, net in the
Condensed Consolidated Balance Sheets
, except for advances related to loans in foreclosure or real estate owned, which are included in Other assets. Repayment of servicing advances includes the
$11 million
received for advances from Lakeview as part of the February 2017 sale of GNMA MSRs.
|
5. Derivatives
|
▪
|
Forward delivery commitments
— Related to interest rate and price risk for mortgage loans held for sale and interest rate lock commitments
|
▪
|
Option contracts
— Related to interest rate and price risk for mortgage loans held for sale and interest rate lock commitments
|
▪
|
MSR-related agreements
— Related to interest rate risk for mortgage servicing rights
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
(In millions)
|
||||||
Interest rate lock commitments
|
$
|
799
|
|
|
$
|
862
|
|
Forward delivery commitments
|
1,357
|
|
|
2,104
|
|
||
Option contracts
|
54
|
|
|
120
|
|
||
MSR-related agreements
|
235
|
|
|
260
|
|
|
March 31, 2017
|
||||||||||||||
|
Gross Assets
|
|
Offsetting
Payables
|
|
Cash Collateral
|
|
Net Amount
|
||||||||
|
(In millions)
|
||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||
Subject to master netting arrangements:
|
|
|
|
|
|
|
|
|
|
|
|
||||
MSR-related agreements
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivative assets subject to netting
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Not subject to master netting arrangements:
|
|
|
|
|
|
|
|
||||||||
Interest rate lock commitments
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
||||
Derivative assets not subject to netting
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
||||
Total derivative assets
|
$
|
18
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
17
|
|
|
Gross Liabilities
|
|
Offsetting
Receivables
|
|
Cash Collateral
|
|
Net Amount
|
||||||||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
||||
Subject to master netting arrangements:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Forward delivery commitments
|
$
|
3
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
2
|
|
Total derivative liabilities
|
$
|
3
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
2
|
|
|
December 31, 2016
|
||||||||||||||
|
Gross Assets
|
|
Offsetting
Payables
|
|
Cash Collateral
Paid
|
|
Net Amount
|
||||||||
|
(In millions)
|
||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
||||||||
Subject to master netting arrangements:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Forward delivery commitments
|
$
|
13
|
|
|
$
|
(43
|
)
|
|
$
|
31
|
|
|
$
|
1
|
|
MSR-related agreements
|
19
|
|
|
(22
|
)
|
|
4
|
|
|
1
|
|
||||
Option contracts
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Derivative assets subject to netting
|
33
|
|
|
(66
|
)
|
|
35
|
|
|
2
|
|
||||
Not subject to master netting arrangements:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate lock commitments
|
18
|
|
|
—
|
|
|
—
|
|
|
18
|
|
||||
Forward delivery commitments
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Derivative assets not subject to netting
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
||||
Total derivative assets
|
$
|
52
|
|
|
$
|
(66
|
)
|
|
$
|
35
|
|
|
$
|
21
|
|
|
Gross Liabilities
|
|
Offsetting
Receivables |
|
Cash Collateral
Received |
|
Net Amount
|
||||||||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
||||
Subject to master netting arrangements:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Forward delivery commitments
|
$
|
4
|
|
|
$
|
(10
|
)
|
|
$
|
11
|
|
|
$
|
5
|
|
MSR-related agreements
|
65
|
|
|
(55
|
)
|
|
2
|
|
|
12
|
|
||||
Option Contracts
|
—
|
|
|
(1
|
)
|
|
2
|
|
|
1
|
|
||||
Derivative assets subject to netting
|
69
|
|
|
(66
|
)
|
|
15
|
|
|
18
|
|
||||
Total derivative liabilities
|
$
|
69
|
|
|
$
|
(66
|
)
|
|
$
|
15
|
|
|
$
|
18
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Gain on loans held for sale, net:
|
|
|
|
||||
Interest rate lock commitments
|
$
|
49
|
|
|
$
|
77
|
|
Forward delivery commitments
|
(2
|
)
|
|
(21
|
)
|
||
Option contracts
|
(1
|
)
|
|
—
|
|
||
Net derivative gain related to mortgage servicing rights:
|
|
|
|
|
|
||
MSR-related agreements
|
—
|
|
|
85
|
|
6. Other Assets
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
(In millions)
|
||||||
Mortgage loans in foreclosure, net
(1)
|
$
|
19
|
|
|
$
|
21
|
|
Derivatives
|
17
|
|
|
21
|
|
||
Real estate owned, net
(2)
|
15
|
|
|
16
|
|
||
Income taxes receivable
|
15
|
|
|
14
|
|
||
Prepaid expenses
|
11
|
|
|
11
|
|
||
Equity method investments
|
9
|
|
|
10
|
|
||
Repurchase eligible loans
(3)
|
4
|
|
|
13
|
|
||
Other
|
2
|
|
|
3
|
|
||
Total
|
$
|
92
|
|
|
$
|
109
|
|
(1)
|
As of
March 31, 2017
and
December 31, 2016
, Mortgage loans in foreclosure is net of Allowance for probable foreclosure losses of
$9 million
and
$10 million
, respectively.
|
(2)
|
As of
March 31, 2017
and
December 31, 2016
, Real estate owned is net of Adjustment to value for real estate owned of
$15 million
and
$14 million
, respectively.
|
(3)
|
Repurchase eligible loans represent certain mortgage loans sold pursuant to Government National Mortgage Association programs where the Company, as servicer, has the unilateral option to repurchase the loan if certain criteria are met, including if a loan is greater than
90
days delinquent and where it has been determined that there is more than a trivial benefit from exercising the repurchase option. Regardless of whether the repurchase option has been exercised, the Company must recognize eligible loans within Other assets and a corresponding repurchase liability within Accounts payable and accrued expenses in the
Condensed Consolidated Balance Sheets
.
|
7. Other Liabilities
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
(In millions)
|
||||||
Legal and regulatory matters (Note 10)
|
$
|
121
|
|
|
$
|
114
|
|
Pension and other post-employment benefits
|
11
|
|
|
11
|
|
||
Income tax contingencies
|
8
|
|
|
8
|
|
||
Derivatives
|
2
|
|
|
18
|
|
||
Other
|
7
|
|
|
6
|
|
||
Total
|
$
|
149
|
|
|
$
|
157
|
|
8. Debt and Borrowing Arrangements
|
|
March 31, 2017
|
|
December 31,
2016 |
|||||||||||
|
Balance
|
|
Interest
Rate (1) |
|
Available
Capacity
(2)
|
|
Balance
|
|||||||
|
(In millions)
|
|||||||||||||
Committed warehouse facilities
|
$
|
369
|
|
|
3.1
|
%
|
|
$
|
381
|
|
|
$
|
556
|
|
Uncommitted warehouse facilities
|
6
|
|
|
1.8
|
%
|
|
2,094
|
|
|
—
|
|
|||
Servicing advance facility
|
100
|
|
|
2.9
|
%
|
|
55
|
|
|
99
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Term notes due in 2019
|
275
|
|
|
7.375
|
%
|
|
n/a
|
|
|
275
|
|
|||
Term notes due in 2021
|
340
|
|
|
6.375
|
%
|
|
n/a
|
|
|
340
|
|
|||
Unsecured credit facilities
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|||
Unsecured debt, face value
|
615
|
|
|
|
|
|
|
|
|
615
|
|
|||
Debt issuance costs
|
(7
|
)
|
|
|
|
|
|
(8
|
)
|
|||||
Unsecured debt, net
|
608
|
|
|
|
|
|
|
607
|
|
|||||
Total
|
$
|
1,083
|
|
|
|
|
|
|
|
|
$
|
1,262
|
|
(1)
|
Interest rate shown represents the stated interest rate of outstanding borrowings, which may differ from the effective rate due to the amortization of premiums, discounts and issuance costs. Warehouse facilities and the servicing advance facility are variable-rate. Rate shown for warehouse facilities represents the weighted-average rate of current outstanding borrowings.
|
(2)
|
Capacity is dependent upon maintaining compliance with, or obtaining waivers of, the terms, conditions and covenants of the respective agreements, including asset-eligibility requirements.
|
|
Warehouse
Facilities
|
|
Servicing
Advance
Facility
|
||||
|
(In millions)
|
||||||
Restricted cash
|
$
|
9
|
|
|
$
|
22
|
|
Servicing advances
|
—
|
|
|
140
|
|
||
Mortgage loans held for sale (unpaid principal balance)
|
384
|
|
|
—
|
|
||
Total
|
$
|
393
|
|
|
$
|
162
|
|
|
Warehouse
Facilities
|
|
Servicing
Advance
Facility
(1)
|
|
Unsecured
Debt
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Within one year
|
$
|
375
|
|
|
$
|
100
|
|
|
$
|
—
|
|
|
$
|
475
|
|
Between one and two years
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Between two and three years
|
—
|
|
|
—
|
|
|
275
|
|
|
275
|
|
||||
Between three and four years
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Between four and five years
|
—
|
|
|
—
|
|
|
340
|
|
|
340
|
|
||||
Thereafter
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
375
|
|
|
$
|
100
|
|
|
$
|
615
|
|
|
$
|
1,090
|
|
(1)
|
Maturities of the servicing advance facility represent estimated payments based on the expected cash inflows of the receivables.
|
9. Income Taxes
|
(i)
|
state and local income taxes determined by the mix of income or loss from the operations by entity and state income tax jurisdiction;
|
(ii)
|
a net increase in the valuation allowance driven by federal and state tax losses generated and non net operating loss deferred tax assets for which state and federal valuation allowance is warranted; and
|
(iii)
|
tax benefits related to Net loss attributable to noncontrolling interests for which no taxes are provided.
|
10. Commitments and Contingencies
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Balance, beginning of period
|
$
|
73
|
|
|
$
|
89
|
|
Realized losses
|
(6
|
)
|
|
(6
|
)
|
||
(Decrease) increase in reserves due to:
|
|
|
|
|
|
||
Changes in assumptions
|
(1
|
)
|
|
(2
|
)
|
||
New loan sales
|
1
|
|
|
2
|
|
||
Balance, end of period
|
$
|
67
|
|
|
$
|
83
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
(In millions)
|
||||||
Loan repurchase and indemnification liability
|
$
|
43
|
|
|
$
|
49
|
|
Adjustment to value for real estate owned
|
15
|
|
|
14
|
|
||
Allowance for probable foreclosure losses
|
9
|
|
|
10
|
|
||
Total
|
$
|
67
|
|
|
$
|
73
|
|
11. Fair Value Measurements
|
|
March 31, 2017
|
||||||||||||||||||
|
Level
One
|
|
Level
Two
|
|
Level
Three
|
|
Cash
Collateral
and Netting
|
|
Total
|
||||||||||
|
(In millions)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Mortgage loans held for sale
|
$
|
—
|
|
|
$
|
439
|
|
|
$
|
32
|
|
|
$
|
—
|
|
|
$
|
471
|
|
Mortgage servicing rights
|
—
|
|
|
—
|
|
|
596
|
|
|
—
|
|
|
596
|
|
|||||
Other assets—Derivative assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest rate lock commitments
|
—
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
|||||
MSR-related agreements
|
—
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other liabilities—Derivative liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Forward delivery commitments
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
2
|
|
|
December 31, 2016
|
||||||||||||||||||
|
Level
One
|
|
Level
Two
|
|
Level
Three
|
|
Cash
Collateral
and Netting
|
|
Total
|
||||||||||
|
(In millions)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Mortgage loans held for sale
|
$
|
—
|
|
|
$
|
636
|
|
|
$
|
47
|
|
|
$
|
—
|
|
|
$
|
683
|
|
Mortgage servicing rights
|
—
|
|
|
—
|
|
|
690
|
|
|
—
|
|
|
690
|
|
|||||
Other assets—Derivative assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest rate lock commitments
|
—
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
18
|
|
|||||
Forward delivery commitments
|
—
|
|
|
14
|
|
|
—
|
|
|
(12
|
)
|
|
2
|
|
|||||
MSR-related agreements
|
—
|
|
|
19
|
|
|
—
|
|
|
(18
|
)
|
|
1
|
|
|||||
Option contracts
|
—
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other liabilities—Derivative liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Forward delivery commitments
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
5
|
|
MSR-related agreements
|
—
|
|
|
65
|
|
|
—
|
|
|
(53
|
)
|
|
12
|
|
|||||
Option contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
Total
|
|
Loans 90 days or
more past due and
on non-accrual
status
|
|
Total
|
|
Loans 90 days or
more past due and
on non-accrual
status
|
||||||||
|
(In millions)
|
||||||||||||||
Carrying amount
|
$
|
471
|
|
|
$
|
7
|
|
|
$
|
683
|
|
|
$
|
7
|
|
Aggregate unpaid principal balance
|
471
|
|
|
10
|
|
|
687
|
|
|
10
|
|
||||
Difference
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
(4
|
)
|
|
$
|
(3
|
)
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
(In millions)
|
||||||
First mortgages:
|
|
|
|
|
|
||
Conforming
|
$
|
383
|
|
|
$
|
531
|
|
Non-conforming
|
56
|
|
|
105
|
|
||
Total first mortgages
|
439
|
|
|
636
|
|
||
Second lien
|
3
|
|
|
3
|
|
||
Scratch and Dent
|
29
|
|
|
44
|
|
||
Total
|
$
|
471
|
|
|
$
|
683
|
|
|
Three Months Ended
March 31, |
||||
|
2017
|
|
2016
|
||
Initial capitalization rate of additions to MSRs
|
1.17
|
%
|
|
0.99
|
%
|
|
March 31,
2017 |
|
December 31,
2016 |
||
Capitalization servicing rate
|
0.83
|
%
|
|
0.82
|
%
|
Capitalization servicing multiple
|
3.0
|
|
|
2.9
|
|
Weighted-average servicing fee (in basis points)
|
28
|
|
|
28
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||
Weighted-average prepayment speed (CPR)
|
9.0
|
%
|
|
9.2
|
%
|
Option adjusted spread, in basis points (OAS)
|
1,215
|
|
|
1,430
|
|
Weighted-average delinquency rate
|
4.0
|
%
|
|
5.1
|
%
|
|
March 31, 2017
|
||||||||||
|
Weighted-
Average
Prepayment
Speed
|
|
Option
Adjusted
Spread
|
|
Weighted-
Average
Delinquency
Rate
|
||||||
|
(In millions)
|
||||||||||
Impact on fair value of 10% adverse change
|
$
|
(19
|
)
|
|
$
|
(28
|
)
|
|
$
|
(10
|
)
|
Impact on fair value of 20% adverse change
|
(36
|
)
|
|
(53
|
)
|
|
(21
|
)
|
|
Three Months Ended
March 31, 2017 |
|
Three Months Ended
March 31, 2016 |
||||||||||||||||||||
|
MLHS
|
|
MSRs
|
|
IRLCs,
net
|
|
MLHS
|
|
MSRs
|
|
IRLCs,
net
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Balance, beginning of period
|
$
|
47
|
|
|
$
|
690
|
|
|
$
|
18
|
|
|
$
|
39
|
|
|
$
|
880
|
|
|
$
|
21
|
|
Purchases, Issuances, Sales and Settlements:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchases
|
2
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
||||||
Issuances
|
1
|
|
|
11
|
|
|
—
|
|
|
1
|
|
|
13
|
|
|
—
|
|
||||||
Sales
|
(16
|
)
|
|
(76
|
)
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
||||||
Settlements
|
(3
|
)
|
|
—
|
|
|
(50
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
(70
|
)
|
||||||
|
(16
|
)
|
|
(65
|
)
|
|
(50
|
)
|
|
(3
|
)
|
|
11
|
|
|
(70
|
)
|
||||||
Realized and unrealized gains (losses) included in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gain on loans held for sale, net
|
—
|
|
|
—
|
|
|
49
|
|
|
—
|
|
|
—
|
|
|
77
|
|
||||||
Change in fair value of MSRs
|
—
|
|
|
(29
|
)
|
|
—
|
|
|
—
|
|
|
(121
|
)
|
|
—
|
|
||||||
Interest income
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||||
|
1
|
|
|
(29
|
)
|
|
49
|
|
|
1
|
|
|
(121
|
)
|
|
77
|
|
||||||
Transfers into Level Three
|
5
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
||||||
Transfers out of Level Three
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
||||||
Balance, end of period
|
$
|
32
|
|
|
$
|
596
|
|
|
$
|
17
|
|
|
$
|
41
|
|
|
$
|
770
|
|
|
$
|
28
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Gain on loans held for sale, net
|
$
|
15
|
|
|
$
|
25
|
|
Change in fair value of mortgage servicing rights
|
(2
|
)
|
|
(95
|
)
|
12. Variable Interest Entities
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
PHH Home
Loans
|
|
Servicing
Advance
Receivables
Trust
|
|
PHH Home
Loans
|
|
Servicing
Advance
Receivables
Trust
|
||||||||
|
(In millions)
|
||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash
|
$
|
70
|
|
|
$
|
—
|
|
|
$
|
67
|
|
|
$
|
—
|
|
Restricted cash
|
6
|
|
|
22
|
|
|
5
|
|
|
19
|
|
||||
Mortgage loans held for sale
|
254
|
|
|
—
|
|
|
350
|
|
|
—
|
|
||||
Accounts receivable, net
|
7
|
|
|
—
|
|
|
9
|
|
|
—
|
|
||||
Servicing advances, net
|
—
|
|
|
140
|
|
|
—
|
|
|
150
|
|
||||
Property and equipment, net
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Other assets
|
13
|
|
|
—
|
|
|
11
|
|
|
1
|
|
||||
Total assets
|
$
|
351
|
|
|
$
|
162
|
|
|
$
|
443
|
|
|
$
|
170
|
|
Assets held as collateral
|
$
|
228
|
|
|
$
|
162
|
|
|
$
|
320
|
|
|
$
|
169
|
|
|
|
|
|
|
|
|
|
||||||||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
—
|
|
Debt
|
216
|
|
|
100
|
|
|
300
|
|
|
99
|
|
||||
Other liabilities
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
||||
Total liabilities
(1)
|
$
|
234
|
|
|
$
|
100
|
|
|
$
|
316
|
|
|
$
|
99
|
|
(1)
|
Excludes intercompany payables.
|
13. Segment Information
|
▪
|
Mortgage Production
— provides mortgage loan origination services and sells mortgage loans.
|
▪
|
Mortgage Servicing
— performs servicing activities for loans originated by the Company and mortgage servicing rights purchased from others, and acts as a subservicer for certain clients that own the underlying mortgage servicing rights.
|
|
Total Assets
|
||||||
|
March 31,
2017 |
|
December 31, 2016
|
||||
|
(In millions)
|
||||||
Mortgage Production segment
|
$
|
701
|
|
|
$
|
913
|
|
Mortgage Servicing segment
|
1,283
|
|
|
1,428
|
|
||
Other
|
867
|
|
|
834
|
|
||
Total
|
$
|
2,851
|
|
|
$
|
3,175
|
|
|
Net Revenues
|
||||||
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Mortgage Production segment
|
$
|
87
|
|
|
$
|
113
|
|
Mortgage Servicing segment
|
27
|
|
|
44
|
|
||
Other
|
—
|
|
|
—
|
|
||
Total
|
$
|
114
|
|
|
$
|
157
|
|
|
Segment Loss
(2)
|
||||||
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Mortgage Production segment
|
$
|
(41
|
)
|
|
$
|
(26
|
)
|
Mortgage Servicing segment
|
(34
|
)
|
|
(21
|
)
|
||
Other
(1)
|
(26
|
)
|
|
(2
|
)
|
||
Total
|
$
|
(101
|
)
|
|
$
|
(49
|
)
|
(1)
|
For the
three
months ended March 31, 2017, the results for Other include both Exit and disposal costs related to the exit of the PLS business and reorganization of operations and Professional and third-party service fees related to the strategic review that are not allocated to the Production and Servicing segments.
|
(2)
|
The following is a reconciliation of Loss before income taxes to Segment loss:
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Loss before income taxes
|
$
|
(105
|
)
|
|
$
|
(49
|
)
|
Less: net loss attributable to noncontrolling interest
|
(4
|
)
|
|
—
|
|
||
Segment loss
|
$
|
(101
|
)
|
|
$
|
(49
|
)
|
14. Subsequent Event
|
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
▪
|
Executive Summary
|
▪
|
Results of Operations
|
▪
|
Risk Management
|
▪
|
Liquidity and Capital Resources
|
▪
|
Critical Accounting Policies and Estimates
|
▪
|
Recently Issued Accounting Pronouncements
|
EXECUTIVE SUMMARY
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
MSR Fair Value
|
|
UPB
|
|
MSR Fair Value
|
|
UPB
|
||||||||
|
(In millions)
|
||||||||||||||
MSR Commitments:
|
|
|
|
|
|
|
|
||||||||
New Residential Investment Corp.
|
$
|
554
|
|
|
$
|
66,993
|
|
|
$
|
579
|
|
|
$
|
69,937
|
|
Lakeview Loan Servicing, LLC
(1)
|
18
|
|
|
2,707
|
|
|
97
|
|
|
13,369
|
|
||||
Other counterparties
|
1
|
|
|
49
|
|
|
2
|
|
|
158
|
|
||||
Non-committed
|
23
|
|
|
2,059
|
|
|
12
|
|
|
1,193
|
|
||||
Total
|
$
|
596
|
|
|
$
|
71,808
|
|
|
$
|
690
|
|
|
$
|
84,657
|
|
(1)
|
On February 2, 2017, the initial sale of GNMA MSRs to Lakeview was completed, representing
$10.2 billion
unpaid principal balance,
$74 million
fair value, and
$11 million
of Servicing advances, with total expected proceeds of
$85 million
from the initial transfer.
|
|
Exit Program Costs
|
|
Cash Outflows
|
||||||||||||||||
|
PLS Exit
|
|
Re-organization
|
|
Total
|
|
Payments To Date
|
|
Future Outflows
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Exit Costs by Segment:
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage Production segment
|
$
|
7
|
|
|
$
|
6
|
|
|
$
|
13
|
|
|
|
|
|
||||
Mortgage Servicing segment
|
—
|
|
|
2
|
|
|
2
|
|
|
|
|
|
|||||||
Other
|
1
|
|
|
9
|
|
|
10
|
|
|
|
|
|
|||||||
Recognized in Q1 2017 - subtotal
|
$
|
8
|
|
|
$
|
17
|
|
|
$
|
25
|
|
|
|
|
|
||||
Recognized in prior periods (Q4 2016)
|
26
|
|
|
—
|
|
|
26
|
|
|
|
|
|
|||||||
Estimate of remaining costs
|
56
|
|
|
33
|
|
|
89
|
|
|
|
|
|
|||||||
Cash exit program expenditures
|
$
|
90
|
|
|
$
|
50
|
|
|
$
|
140
|
|
|
$
|
(5
|
)
|
|
$
|
135
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-cash charges and impairments
|
15
|
|
|
—
|
|
|
|
|
|
|
|
||||||||
Less: Exit costs attributed to Noncontrolling interest
|
—
|
|
|
(10
|
)
|
|
|
|
|
|
|
||||||||
Total
|
$
|
105
|
|
|
$
|
40
|
|
|
|
|
|
|
|
(1)
|
Cash outflows as presented above exclude the transfer of $7 million to Restricted cash related to a letter of credit posted in connection with the LenderLive transaction.
|
RESULTS OF OPERATIONS
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In millions, except per share data)
|
||||||
Net revenues
|
$
|
114
|
|
|
$
|
157
|
|
Total expenses
|
219
|
|
|
206
|
|
||
Loss before income taxes
|
(105
|
)
|
|
(49
|
)
|
||
Income tax benefit
|
(34
|
)
|
|
(19
|
)
|
||
Net loss
|
(71
|
)
|
|
(30
|
)
|
||
Less: net loss attributable to noncontrolling interest
|
(4
|
)
|
|
—
|
|
||
Net loss attributable to PHH Corporation
|
$
|
(67
|
)
|
|
$
|
(30
|
)
|
|
|
|
|
||||
Basic and Diluted loss per share attributable to PHH Corporation
|
$
|
(1.26
|
)
|
|
$
|
(0.56
|
)
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Origination and other loan fees
|
$
|
44
|
|
|
$
|
61
|
|
Gain on loans held for sale, net
|
42
|
|
|
48
|
|
||
Loan servicing income
|
62
|
|
|
91
|
|
||
Change in fair value of mortgage servicing rights, net of related derivatives
|
(29
|
)
|
|
(36
|
)
|
||
Net interest expense
|
(7
|
)
|
|
(9
|
)
|
||
Other income
|
2
|
|
|
2
|
|
||
Net revenues
|
$
|
114
|
|
|
$
|
157
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Salaries and related expenses
|
$
|
86
|
|
|
$
|
90
|
|
Commissions
|
11
|
|
|
12
|
|
||
Loan origination expenses
|
9
|
|
|
16
|
|
||
Foreclosure and repossession expenses
|
7
|
|
|
7
|
|
||
Professional and third-party service fees
|
37
|
|
|
39
|
|
||
Technology equipment and software expenses
|
9
|
|
|
10
|
|
||
Occupancy and other office expenses
|
9
|
|
|
13
|
|
||
Depreciation and amortization
|
4
|
|
|
4
|
|
||
Exit and disposal costs
|
25
|
|
|
—
|
|
||
Other operating expenses:
|
|
|
|
||||
Legal and regulatory reserves
|
9
|
|
|
5
|
|
||
Other
|
13
|
|
|
10
|
|
||
Total expenses
|
$
|
219
|
|
|
$
|
206
|
|
Mortgage Production Segment
|
|
Three Months Ended March 31, 2017
|
||||||||||||||
|
PLS
(1)
|
|
Real Estate
|
|
Portfolio Retention
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Origination and other loan fees
|
$
|
37
|
|
|
$
|
6
|
|
|
$
|
1
|
|
|
$
|
44
|
|
Gain on loans held for sale, net
|
(1
|
)
|
|
31
|
|
|
12
|
|
|
42
|
|
||||
Net interest income
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Net revenues
|
$
|
36
|
|
|
$
|
38
|
|
|
$
|
13
|
|
|
$
|
87
|
|
|
|
|
|
|
|
|
|
||||||||
Total Closings
|
$
|
4,233
|
|
|
$
|
1,197
|
|
|
$
|
439
|
|
|
$
|
5,869
|
|
|
Three Months Ended March 31, 2016
|
||||||||||||||
|
PLS & Wholesale
(1)
|
|
Real Estate
|
|
Portfolio Retention
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Origination and other loan fees
|
$
|
53
|
|
|
$
|
7
|
|
|
$
|
1
|
|
|
$
|
61
|
|
Gain on loans held for sale, net
|
5
|
|
|
38
|
|
|
5
|
|
|
48
|
|
||||
Net interest income
|
1
|
|
|
1
|
|
|
—
|
|
|
2
|
|
||||
Other income
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Net revenues
|
$
|
61
|
|
|
$
|
46
|
|
|
$
|
6
|
|
|
$
|
113
|
|
|
|
|
|
|
|
|
|
||||||||
Total Closings
|
$
|
6,486
|
|
|
$
|
1,341
|
|
|
$
|
128
|
|
|
$
|
7,955
|
|
(1)
|
These amounts exclude Portfolio Retention which has historically been included in our disclosed PLS channel data.
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
($ In millions)
|
||||||
Closings:
|
|
|
|
|
|
||
Saleable to investors
|
$
|
1,708
|
|
|
$
|
1,988
|
|
Fee-based
|
4,161
|
|
|
5,967
|
|
||
Total
|
$
|
5,869
|
|
|
$
|
7,955
|
|
|
|
|
|
||||
Purchase
|
$
|
2,664
|
|
|
$
|
3,374
|
|
Refinance
|
3,205
|
|
|
4,581
|
|
||
Total
|
$
|
5,869
|
|
|
$
|
7,955
|
|
|
|
|
|
||||
Retail - PLS
|
$
|
4,672
|
|
|
$
|
6,353
|
|
Retail - Real Estate
|
1,197
|
|
|
1,341
|
|
||
Total retail
|
5,869
|
|
|
7,694
|
|
||
Wholesale/correspondent
|
—
|
|
|
261
|
|
||
Total
|
$
|
5,869
|
|
|
$
|
7,955
|
|
|
|
|
|
||||
Retail - PLS (units)
|
8,279
|
|
|
11,689
|
|
||
Retail - Real Estate (units)
|
4,208
|
|
|
4,968
|
|
||
Total retail (units)
|
12,487
|
|
|
16,657
|
|
||
Wholesale/correspondent (units)
|
—
|
|
|
1,011
|
|
||
Total (units)
|
12,487
|
|
|
17,668
|
|
||
|
|
|
|
||||
Applications:
|
|
|
|
|
|
||
Saleable to investors
|
$
|
2,539
|
|
|
$
|
3,312
|
|
Fee-based
|
4,341
|
|
|
8,991
|
|
||
Total
|
$
|
6,880
|
|
|
$
|
12,303
|
|
|
|
|
|
||||
Other:
|
|
|
|
|
|
||
IRLCs expected to close
|
$
|
495
|
|
|
$
|
1,168
|
|
Total loan margin on IRLCs (in basis points)
|
356
|
|
|
295
|
|
||
Loans sold
|
$
|
1,943
|
|
|
$
|
2,163
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Origination and other loan fees
|
$
|
44
|
|
|
$
|
61
|
|
Gain on loans held for sale, net
|
42
|
|
|
48
|
|
||
Net interest income:
|
|
|
|
|
|||
Interest income
|
5
|
|
|
7
|
|
||
Secured interest expense
|
(4
|
)
|
|
(5
|
)
|
||
Net interest income
|
1
|
|
|
2
|
|
||
Other income
|
—
|
|
|
2
|
|
||
Net revenues
|
87
|
|
|
113
|
|
||
|
|
|
|
||||
Salaries and related expenses
|
53
|
|
|
57
|
|
||
Commissions
|
11
|
|
|
12
|
|
||
Loan origination expenses
|
9
|
|
|
16
|
|
||
Professional and third-party service fees
|
4
|
|
|
5
|
|
||
Technology equipment and software expenses
|
1
|
|
|
1
|
|
||
Occupancy and other office expenses
|
6
|
|
|
7
|
|
||
Depreciation and amortization
|
2
|
|
|
2
|
|
||
Exit and disposal costs
|
13
|
|
|
—
|
|
||
Other operating expenses
|
33
|
|
|
39
|
|
||
Total expenses
|
132
|
|
|
139
|
|
||
|
|
|
|
||||
Loss before income taxes
|
(45
|
)
|
|
(26
|
)
|
||
Less: net loss attributable to noncontrolling interest
|
(4
|
)
|
|
—
|
|
||
Segment loss
|
$
|
(41
|
)
|
|
$
|
(26
|
)
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Gain on loans held for sale, net:
|
|
|
|
|
|
||
Gain on loans
|
$
|
41
|
|
|
$
|
40
|
|
Change in fair value of Scratch and Dent and certain non-conforming mortgage loans
|
(1
|
)
|
|
(2
|
)
|
||
Economic hedge results
|
2
|
|
|
10
|
|
||
Total change in fair value of mortgage loans and related derivatives
|
1
|
|
|
8
|
|
||
Total
|
$
|
42
|
|
|
$
|
48
|
|
|
|
|
|
||||
Salaries and related expenses:
|
|
|
|
|
|
||
Salaries, benefits and incentives
|
$
|
51
|
|
|
$
|
53
|
|
Contract labor and overtime
|
2
|
|
|
4
|
|
||
Total
|
$
|
53
|
|
|
$
|
57
|
|
|
|
|
|
||||
Other operating expenses:
|
|
|
|
|
|
||
Corporate overhead allocation
|
$
|
25
|
|
|
$
|
34
|
|
Other expenses
|
8
|
|
|
5
|
|
||
Total
|
$
|
33
|
|
|
$
|
39
|
|
Mortgage Servicing Segment
|
|
March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
($ In millions)
|
||||||
Total Loan Servicing Portfolio:
|
|
|
|
||||
Conventional loans
|
$
|
150,022
|
|
|
$
|
205,305
|
|
Government loans
|
11,833
|
|
|
23,919
|
|
||
Home equity lines of credit
|
1,771
|
|
|
4,116
|
|
||
Total Unpaid Principal Balance
|
$
|
163,626
|
|
|
$
|
233,340
|
|
|
|
|
|
||||
Number of loans in owned portfolio (units)
|
486,706
|
|
|
628,104
|
|
||
Number of subserviced loans (units)
|
267,949
|
|
|
486,549
|
|
||
Total number of loans serviced (units)
|
754,655
|
|
|
1,114,653
|
|
||
|
|
|
|
||||
Weighted-average interest rate
|
3.8
|
%
|
|
3.8
|
%
|
||
Portfolio delinquency (% of UPB)
(1)
|
1.94
|
%
|
|
2.09
|
%
|
||
|
|
|
|
||||
Capitalized Servicing Portfolio:
|
|
|
|
||||
Unpaid Principal Balance
|
$
|
71,808
|
|
|
$
|
96,116
|
|
Capitalized servicing rate
|
0.83
|
%
|
|
0.80
|
%
|
||
Capitalized servicing multiple
|
3.0
|
|
|
2.8
|
|
||
Weighted-average servicing fee (in basis points)
|
28
|
|
|
29
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Total Loan Servicing Portfolio:
|
|
|
|
||||
Average Portfolio UPB
|
$
|
169,152
|
|
|
$
|
229,970
|
|
|
|
|
|
||||
Capitalized Servicing Portfolio:
|
|
|
|
||||
Average Portfolio UPB
|
$
|
78,155
|
|
|
$
|
97,647
|
|
Payoffs and principal curtailments
|
3,459
|
|
|
3,955
|
|
||
Sales
|
10,316
|
|
|
272
|
|
(1)
|
Portfolio delinquencies are loans 30 days or more past due and are represented as a percentage of the unpaid principal balance of the Total loan servicing portfolio.
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Net loan servicing income:
|
|
|
|
|
|
||
Loan servicing income
|
$
|
62
|
|
|
$
|
91
|
|
Change in fair value of mortgage servicing rights
|
(29
|
)
|
|
(121
|
)
|
||
Net derivative gain related to MSRs
|
—
|
|
|
85
|
|
||
Net loan servicing income
|
33
|
|
|
55
|
|
||
Net interest expense:
|
|
|
|
|
|||
Interest income
|
4
|
|
|
2
|
|
||
Secured interest expense
|
(2
|
)
|
|
(3
|
)
|
||
Unsecured interest expense
|
(10
|
)
|
|
(10
|
)
|
||
Net interest expense
|
(8
|
)
|
|
(11
|
)
|
||
Other income
|
2
|
|
|
—
|
|
||
Net revenues
|
27
|
|
|
44
|
|
||
|
|
|
|
||||
Salaries and related expenses
|
17
|
|
|
18
|
|
||
Foreclosure and repossession expenses
|
7
|
|
|
7
|
|
||
Professional and third-party service fees
|
7
|
|
|
9
|
|
||
Technology equipment and software expenses
|
3
|
|
|
4
|
|
||
Occupancy and other office expenses
|
3
|
|
|
5
|
|
||
Depreciation and amortization
|
1
|
|
|
1
|
|
||
Exit and disposal costs
|
2
|
|
|
—
|
|
||
Other operating expenses
|
21
|
|
|
21
|
|
||
Total expenses
|
61
|
|
|
65
|
|
||
Segment loss
|
$
|
(34
|
)
|
|
$
|
(21
|
)
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Loan servicing income:
|
|
|
|
|
|
||
Servicing fees from capitalized portfolio
|
$
|
54
|
|
|
$
|
70
|
|
Subservicing fees
|
11
|
|
|
18
|
|
||
Late fees and other ancillary servicing revenue
|
—
|
|
|
6
|
|
||
Curtailment interest paid to investors
|
(3
|
)
|
|
(3
|
)
|
||
Total
|
$
|
62
|
|
|
$
|
91
|
|
|
|
|
|
||||
Changes in fair value of mortgage servicing rights:
|
|
|
|
|
|||
Actual prepayments of the underlying mortgage loans
|
$
|
(19
|
)
|
|
$
|
(21
|
)
|
Actual receipts of recurring cash flows
|
(8
|
)
|
|
(5
|
)
|
||
Market-related fair value adjustments
|
(2
|
)
|
|
(95
|
)
|
||
Total
|
$
|
(29
|
)
|
|
$
|
(121
|
)
|
|
|
|
|
||||
Other operating expenses:
|
|
|
|
|
|||
Corporate overhead allocation
|
$
|
9
|
|
|
$
|
14
|
|
Repurchase and foreclosure-related charges
|
(1
|
)
|
|
(2
|
)
|
||
Legal and regulatory reserves
|
9
|
|
|
5
|
|
||
Other expenses
|
4
|
|
|
4
|
|
||
Total
|
$
|
21
|
|
|
$
|
21
|
|
Other
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Net revenues
|
$
|
—
|
|
|
$
|
—
|
|
Salaries and related expenses
|
16
|
|
|
15
|
|
||
Professional and third-party service fees
|
26
|
|
|
25
|
|
||
Technology equipment and software expenses
|
5
|
|
|
5
|
|
||
Occupancy and other office expenses
|
—
|
|
|
1
|
|
||
Depreciation and amortization
|
1
|
|
|
1
|
|
||
Exit and disposal costs
|
10
|
|
|
—
|
|
||
Other
|
2
|
|
|
3
|
|
||
Total expenses before allocation
|
60
|
|
|
50
|
|
||
Corporate overhead allocation:
|
|
|
|
|
|
||
Mortgage Production segment
|
(25
|
)
|
|
(34
|
)
|
||
Mortgage Servicing segment
|
(9
|
)
|
|
(14
|
)
|
||
Total expenses
|
26
|
|
|
2
|
|
||
Net loss before income taxes
|
$
|
(26
|
)
|
|
$
|
(2
|
)
|
RISK MANAGEMENT
|
Interest Rate Risk
|
Consumer Credit Risk
|
Counterparty and Concentration Risk
|
•
|
25%
through our PLS relationship with Morgan Stanley Private Bank, N.A. ("Morgan Stanley");
|
•
|
20%
through the Real Estate channel, from our relationships with Realogy and its affiliates;
|
•
|
13%
through our PLS relationship with Merrill Lynch; and
|
•
|
12%
through our PLS relationship with HSBC.
|
LIQUIDITY AND CAPITAL RESOURCES
|
•
|
$175 million related to the exit of the PLS business, including expected operating losses and costs to complete the exit;
|
•
|
$40 million for costs associated with re-engineering and transitioning our business; and
|
•
|
$50 million for payment of MSR transaction costs and strategic review advisory, legal and professional fees.
|
Cash Flows
|
|
Three Months Ended
March 31, |
|
|
||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
|
(In millions)
|
||||||||||
Cash provided by (used in):
|
|
|
|
|
|
|
|
|
|||
Operating activities
|
$
|
192
|
|
|
$
|
21
|
|
|
$
|
171
|
|
Investing activities
|
18
|
|
|
74
|
|
|
(56
|
)
|
|||
Financing activities
|
(180
|
)
|
|
(64
|
)
|
|
(116
|
)
|
|||
Net increase in Cash and cash equivalents
|
$
|
30
|
|
|
$
|
31
|
|
|
$
|
(1
|
)
|
Debt
|
|
Outstanding Balance
|
|
Collateral
(1)
|
||||
|
(In millions)
|
||||||
Warehouse facilities
|
$
|
375
|
|
|
$
|
393
|
|
Servicing advance facility
|
100
|
|
|
162
|
|
||
Unsecured debt, net
|
608
|
|
|
—
|
|
||
Total
|
$
|
1,083
|
|
|
$
|
555
|
|
(1)
|
Assets held as collateral are not available to pay our general obligations.
|
|
Total
Capacity
|
|
Outstanding Balance
|
|
Available
Capacity
(1)
|
|
Maturity
Date
|
||||||
|
(In millions)
|
|
|
||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
|
|||
Committed facilities:
|
|
|
|
|
|
|
|
|
|
|
|||
Wells Fargo Bank, N.A.
|
$
|
450
|
|
|
$
|
210
|
|
|
$
|
240
|
|
|
6/30/2017
|
Bank of America, N.A.
|
200
|
|
|
97
|
|
|
103
|
|
|
6/30/2017
|
|||
Barclays Bank PLC
|
100
|
|
|
62
|
|
|
38
|
|
|
7/31/2017
|
|||
Committed warehouse facilities
|
750
|
|
|
369
|
|
|
381
|
|
|
|
|||
Uncommitted facilities:
|
|
|
|
|
|
|
|
|
|
|
|||
Fannie Mae
(2)
|
2,000
|
|
|
6
|
|
|
1,994
|
|
|
n/a
|
|||
Barclays Bank PLC
|
100
|
|
|
—
|
|
|
100
|
|
|
n/a
|
|||
Total
|
$
|
2,850
|
|
|
$
|
375
|
|
|
$
|
2,475
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Off-Balance Sheet Gestation Facilities:
|
|
|
|
|
|
|
|
|
|
|
|||
Uncommitted facilities:
|
|
|
|
|
|
|
|
|
|
|
|||
JP Morgan Chase Bank, N.A.
|
$
|
150
|
|
|
$
|
—
|
|
|
$
|
150
|
|
|
n/a
|
(1)
|
Capacity is dependent upon maintaining compliance with the terms, conditions and covenants of the respective agreements and may be further limited by asset eligibility requirements.
|
(2)
|
On April 30, 2017, Fannie Mae reduced the capacity of the uncommitted facility to $200 million, at our request.
|
|
Total
Capacity
|
|
Outstanding Balance
|
|
Available
Capacity
(1)
|
|
Maturity
Date
|
|||||||
|
(In millions)
|
|
|
|
||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|||
Servicing Advance Receivables Trust
|
$
|
155
|
|
|
$
|
100
|
|
|
$
|
55
|
|
|
6/15/2018
|
(2)
|
Subservicing advance liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|||
Client-funded amounts
|
n/a
|
|
|
271
|
|
|
n/a
|
|
|
n/a
|
|
|||
Total
|
|
|
|
$
|
371
|
|
|
|
|
|
|
|
(1)
|
Capacity is dependent upon maintaining compliance with the terms, conditions and covenants of the respective agreements and may be further limited by asset eligibility requirements.
|
(2)
|
The facility has a revolving period through June 15, 2017, after which the facility goes into amortization. The maturity date of June 15, 2018 presented above represents the final repayment date of the amortizing notes.
|
|
Balance
at Maturity |
|
Outstanding Balance
|
|
Maturity
Date
|
|||||
|
(In millions)
|
|
|
|
||||||
7.375% Term notes due in 2019
|
$
|
275
|
|
|
$
|
273
|
|
|
9/1/2019
|
|
6.375% Term notes due in 2021
|
340
|
|
|
335
|
|
|
8/15/2021
|
|
||
Total
|
$
|
615
|
|
|
$
|
608
|
|
|
0
|
|
|
Senior
Debt
|
|
Short-Term
Debt
|
Moody’s Investors Service
|
B1
|
|
NP
|
Standard & Poor's Rating Services
|
B-
|
|
N/A
|
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
|
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
|
Item 3. Quantitative and Qualitative Disclosures About Market Risk
|
Interest Rate Risk
|
|
Change in Fair Value
|
||||||||||||||||||||||
|
Down
100 bps
|
|
Down
50 bps
|
|
Down
25 bps
|
|
Up
25 bps
|
|
Up
50 bps
|
|
Up
100 bps
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Mortgage pipeline
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage loans held for sale
|
$
|
6
|
|
|
$
|
4
|
|
|
$
|
2
|
|
|
$
|
(2
|
)
|
|
$
|
(5
|
)
|
|
$
|
(11
|
)
|
Interest rate lock commitments
(1)
|
5
|
|
|
3
|
|
|
2
|
|
|
(3
|
)
|
|
(5
|
)
|
|
(12
|
)
|
||||||
Forward delivery commitments
(1)
|
(12
|
)
|
|
(8
|
)
|
|
(4
|
)
|
|
5
|
|
|
10
|
|
|
22
|
|
||||||
Option contracts
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
3
|
|
||||||
Total Mortgage pipeline
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
1
|
|
|
2
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
MSRs and related derivatives
(2)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage servicing rights
|
(144
|
)
|
|
(67
|
)
|
|
(32
|
)
|
|
29
|
|
|
56
|
|
|
99
|
|
||||||
Derivatives related to MSRs
(1)
|
3
|
|
|
2
|
|
|
1
|
|
|
(1
|
)
|
|
(2
|
)
|
|
(4
|
)
|
||||||
Total MSRs and related derivatives
|
(141
|
)
|
|
(65
|
)
|
|
(31
|
)
|
|
28
|
|
|
54
|
|
|
95
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unsecured term debt
|
(20
|
)
|
|
(10
|
)
|
|
(5
|
)
|
|
5
|
|
|
10
|
|
|
19
|
|
||||||
Total, net
|
$
|
(162
|
)
|
|
$
|
(76
|
)
|
|
$
|
(36
|
)
|
|
$
|
33
|
|
|
$
|
65
|
|
|
$
|
116
|
|
(1)
|
Included in Other assets or Other liabilities in the
Condensed Consolidated Balance Sheets
.
|
(2)
|
In the fourth quarter of 2016, we significantly reduced our MSR-related derivative hedge coverage as a result of our sale agreement with New Residential that fixes the prices we expect to realize at future transfer dates. For further discussion of those agreements, and discussions of required shareholder approvals and other requirements that must be met to complete such sales, see
Note 4, 'Servicing Activities' in the accompanying Notes to Condensed Consolidated Financial Statements
.
|
Item 4. Controls and Procedures
|
DISCLOSURE CONTROLS AND PROCEDURES
|
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
|
Item 1. Legal Proceedings
|
Item 1A. Risk Factors
|
Risks Related to our Common Stock
|
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3. Defaults Upon Senior Securities
|
Item 4. Mine Safety Disclosures
|
Item 5. Other Information
|
Item 6. Exhibits
|
|
PHH CORPORATION
|
|
|
|
|
|
By:
|
/s/ Glen A. Messina
|
|
|
Glen A. Messina
|
|
|
President and Chief Executive Officer
|
|
|
|
|
By:
|
/s/ Michael R. Bogansky
|
|
|
Michael R. Bogansky
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
Exhibit No.
|
|
Description
|
|
Incorporation by Reference
|
|
|
|
|
|
2.1
|
|
Asset Purchase Agreement, dated February 15, 2017, by and among Guaranteed Rate Affinity, LLC, PHH Home Loans, LLC, RMR Financial, LLC and PHH Corporation. (Certain of the schedules and similar attachments have been omitted pursuant to Item 601(b)(2) of Regulation S-K, but the Company undertakes to furnish a copy of the schedules or similar attachments to the Securities and Exchange Commission upon request.)
|
|
Incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K filed on January 30, 2017.
|
|
|
|
|
|
2.2
|
|
JV Interests Purchase Agreement, dated February 15, 2017, by and between Realogy Services Venture Partner LLC and PHH Corporation. (Certain of the schedules and similar attachments have been omitted pursuant to Item 601(b)(2) of Regulation S-K, but the Company undertakes to furnish a copy of the schedules or similar attachments to the Securities and Exchange Commission upon request.)
|
|
Incorporated by reference to Exhibit 2.2 to our Current Report on Form 8-K filed on January 30, 2017.
|
|
|
|
|
|
10.1
|
|
Support Agreement, dated February 15, 2017, by and among Guaranteed Rate, Inc., Realogy Holdings Corp. and PHH Corporation.
|
|
Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on January 30, 2017.
|
|
|
|
|
|
10.2†
|
|
First Amendment To The PHH Corporation Equity Compensation Program For Non-Employee Directors (Under the PHH Corporation 2014 Equity and Incentive Plan)
|
|
Filed herewith.
|
|
|
|
|
|
10.3†
|
|
Severance Letter Agreement dated March 29, 2017 to Glen Messina from PHH Corporation.
|
|
Filed herewith.
|
|
|
|
|
|
10.4†
|
|
Severance Letter Agreement dated March 29, 2017 to Kathryn Ruggieri from PHH Corporation.
|
|
Filed herewith.
|
|
|
|
|
|
10.5†
|
|
Severance Letter Agreement dated March 29, 2017 to William F. Brown from PHH Corporation.
|
|
Filed herewith.
|
|
|
|
|
|
10.6†
|
|
Severance Letter Agreement dated March 29, 2017 to Leith Kaplan from PHH Corporation.
|
|
Filed herewith.
|
|
|
|
|
|
10.7†
|
|
Employment Agreement effective as of March 30, 2017 between PHH Corporation and Rob Crowl.
|
|
Filed herewith.
|
|
|
|
|
|
10.8†
|
|
Employment Agreement effective as of March 30, 2017 between PHH Corporation and Michael Bogansky.
|
|
Filed herewith.
|
|
|
|
|
|
10.9†, **
|
|
Form of 2017 Cash Performance Incentive Award Pursuant to the PHH Corporation 2014 Equity And Incentive Plan
|
|
Filed herewith.
|
|
|
|
|
|
10.10†, **
|
|
Form of PHH Corporation Management Incentive Plan 2017 Award Notice
|
|
Filed herewith.
|
|
|
|
|
|
10.11†
|
|
Form of 2016 Performance Restricted Stock Unit Award Notice and Agreement
|
|
Filed herewith.
|
|
|
|
|
|
10.12†
|
|
Form of May 2016 Performance Restricted Stock Unit Award Notice and Agreement
|
|
Filed herewith.
|
|
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Filed herewith.
|
|
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Filed herewith.
|
|
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Furnished herewith.
|
|
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Furnished herewith.
|
|
|
|
|
|
Exhibit No.
|
|
Description
|
|
Incorporation by Reference
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
Filed herewith.
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
Filed herewith.
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
Filed herewith.
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Labels Linkbase Document.
|
|
Filed herewith.
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
Filed herewith.
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
Filed herewith.
|
†
|
Management or compensatory plan or arrangement required to be filed pursuant to Item 601(b)(10) of Regulation S-K.
|
**
|
Confidential treatment has been granted for certain portions of this Exhibit pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, which portions are omitted and filed separately with the SEC.
|
(a)
|
Each Non-Employee Director may elect to have all or a portion of his Director Fees in excess of the Minimum Equity Fees treated as Equity Compensation Fees. Failure to timely make such an election will result in only the Minimum Equity Fees established by the Board of Directors being treated as Equity Compensation Fees.
|
(b)
|
Notwithstanding subsection (a), a newly elected or appointed Non-Employee Director may elect to have all or a portion of his Director Fees in excess of the Minimum Equity Fees treated as Equity Compensation Fees and may also elect to receive payment of his Equity Compensation Fees in the form of Restricted Stock or Restricted Stock Units, or partially in the form of Restricted Stock and partially in the form of Restricted Stock Units. Such election must be made by filing an election with the Administrator, in such form as the Administrator may permit, no later than thirty (30) days following the date of the Non-Employee Director’s election or appointment to the Board of Directors (provided that the Non-Employee Director has not been eligible to participate in this Program or any plan that would be aggregated with this Program under Code Section 409A (other than the accrual of earnings) at any time during the twenty-four (24)-month period ending on the date the new Non-Employee Director becomes eligible to participate in this Program). Such election shall be effective for Director Fees earned for services beginning with the calendar quarter next following when the election is filed with the Administrator until the end of the calendar quarter in which the next Annual Meeting occurs (the “
Fee Deferral Period
”). If the new Non-Employee Director does not make an election described in this subsection (b), only the Minimum Equity Fees will be treated as Equity Compensation Fees. Each new non-Employee Director may specify the form of payment. If the new Non-Employee Director does not specify the form of payment, payment will be made in the form of Restricted Stock. The number of shares of Restricted Stock granted or Restricted Stock Units to be credited to the newly appointed or elected Non-Employee Director’s Deferred Fees Account as of the first trading day of the first calendar quarter following the date of the Non-Employee Director’s appointment or election (that Non-Employee Directors “
Grant Date
”), as applicable, shall be calculated by dividing: (1) the amount of Equity Compensation Fees payable to such Non-Employee Director; by (2) the Fair Market Value of a share of Stock on the Grant Date. Subject to accelerated vesting on the events described in Section 5.3(i) or (ii), the Restricted Stock or Restricted Stock Units, as applicable, will vest ratably over the Fee Deferral Period based on the number of calendar quarters in the Fee Deferral Period on the last date of each such calendar quarter, provided however, that the last one quarter increment will become vested on the date immediately prior to the Annual Meeting next following the Grant Date.”
|
6.
|
By replacing “dated” with “date” in Section 6.2(a).
|
I.
|
Last Day of Employment
|
II.
|
Consideration and Acknowledgement of Certain Obligations
|
(a)
|
Employee is bound by the provisions of the Restrictive Covenant Agreement attached hereto as
Exhibit A
.
|
(b)
|
Consistent with the Letter, Company shall pay Employee in an amount equal to the cost of premiums for COBRA coverage upon loss of coverage under the Company’s group health plan due to his termination on the Termination Date for a period of [12 or 24 months] from the Termination Date. The Company will impute the amount of this payment as taxable income to Employee.
|
(c)
|
Consistent with the Letter, Company shall pay Employee severance in an amount equal to [12 or 24 months] of Employee’s annual base salary as of the effective date of the Letter [BASE SALARY])). Such severance payments shall be subject to applicable withholding taxes. Employee’s severance shall be payable in bi-weekly installments in accordance with the Company’s normal payroll practices, with the first payment commencing the first payroll period after the date on which the Release becomes irrevocable following the Termination Date.
|
(d)
|
Consistent with the Letter, Company shall pay Employee one hundred percent (100%) of the target amount of Employee’s 2017 Management Incentive Plan Award in substantially equal installments no less frequently than monthly during the [12 or 24] month period following Employee’s termination from employment.
|
(e)
|
The Company shall provide Employee with certain payments, if any, in accordance with outstanding long term incentive and other awards, as listed on
Exhibit C
, subject to all terms and conditions of the applicable awards and plans, consistent with a termination without cause and the Letter Agreement, effective on the Termination Date;
|
(f)
|
Consistent with the Letter, Company shall provide Employee with up to $18,000 in reasonable outplacement services by a provider selected by the Company to be used within 24 months of the Termination Date;
|
(g)
|
None of the foregoing payments or benefits will be made or provided if this Agreement and the Release have not been signed by Employee, and the Release has not become irrevocable, on or before [DEADLINE DATE]. Payment and provision of the foregoing benefits are conditioned on Employee’s continued compliance with the restrictive covenants in this Agreement, and other post-employment obligations that survive Employee’s termination.
|
III.
|
General Release of Claims
|
(a)
|
Employee without limitation hereby irrevocably and unconditionally releases and forever discharges the Company, its subsidiaries, divisions, affiliates, related entities, officers, agents, directors, supervisors, employees, representatives, successors and assigns, and all persons acting by, through, under, or in concert with any of them (collectively, “Released Parties”) from any and all charges, complaints, claims, causes of action, demands, controversies, agreements, promises, damages and liabilities of any kind or nature whatsoever, both at law and equity, known or unknown, suspected or unsuspected, anticipated or unanticipated (hereinafter referred to as “claim” or “claims”), arising from conduct occurring on or before the effective date of this Agreement and General Release, including without limitation any claims incidental to or arising out of Employee’s employment with the Company or the termination thereof with respect to all applicable federal, state or local fair employment practices laws, 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 et seq. (“ADEA “),the New Jersey Law Against Discrimination, N.J. Stat. Ann. § 10:5-1 et seq., and the New Jersey Equal Pay Act, N.J. Stat. Ann. § 34:11-56.1 et seq., the New Jersey Family Leave Act, N.J. Stat. Ann. § 34:11B-1 et seq., the New Jersey Conscientious Employee Protection Act, N.J. Stat. Ann. § 34:19-1 et seq., the Millville Dallas Airmotive Plant Job Loss Notification Act, P.L. 2007, c.212, C.34:21-2, the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §2101
et seq
. (“WARN”), all as amended, any other alleged violation of any local, state or federal law, regulation, ordinance, public policy, and/or any contract, tort, or fraud related claim arising under common law. This provision is intended by the parties to be all encompassing and to act as a full and total release of any claim, that Employee might have or has had, that exists or ever has existed on or to the effective date of this Agreement and General Release. In this regard, Employee agrees that by signing this Agreement and General Release and by acceptance of the payment described above, Employee gives up any and all rights EMPLOYEE may have to file any claim or action which Employee may now have, has ever had, or may in the future have, with respect to any matter pertaining to or arising from Employee’s employment with the Company. In this regard, Employee agrees that this Agreement and General Release covers both known and unknown claims and actions.
|
(b)
|
The parties hereby acknowledge and agree that nothing in the Agreement and General Release shall be construed as a release of Employee’s non-waivable statutory rights under applicable federal and state law or rights to seek the enforcement of the Company’s obligations under this Agreement and General Release.
|
(c)
|
Older Worker Benefit Protection Act
. As may be applicable to Employee under the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621,
et
seq
.), (“ADEA”), Employee understands and agrees that:
|
i.
|
Rights or claims under the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621,
et
seq
.) are being waived, except as provided herein.
|
ii.
|
He has had the opportunity of a full 21 days within which to consider this Agreement and release provided herein before signing it, and if he has not taken the full time period, he has done so knowingly and voluntarily, thereby expressly waiving this time period and agreeing not to assert the invalidity of this Agreement and the general release provided herein or any portion thereof on this basis.
|
iii.
|
He has carefully read and fully understands all of the provisions of this Agreement and general release provided herein and is knowingly and voluntarily agreeing to be legally bound by all of the terms set forth in this Agreement.
|
iv.
|
He is, through this Agreement and the general release provided herein, releasing the Released Parties from any and all claims he may have against the Company or such individuals.
|
v.
|
He is hereby advised in writing to consider the terms of this Agreement and the general release provided herein and consult with an attorney of his choice prior to signing this Agreement.
|
vi.
|
He has a full 7 days following the execution of this Agreement to revoke this Agreement and the general release provided herein, and has been and hereby is advised in writing that this Agreement and general release shall not become effective or enforceable until the revocation period has expired. Revocation of this Agreement and the general release provided herein must be made in writing and must be received by the Vice President, Assistant General Counsel of PHH Corporation, 3000 Leadenhall Road, Mail Stop LGL, Mt. Laurel, NJ 08054 no later than close of business on the seventh full day after the execution of this Agreement and General Release.
|
vii.
|
He understands that rights or claims under the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621,
et
seq
.) that may arise after the date this Agreement and General Release is signed are not waived.
|
(d)
|
Employee, for himself, his heirs, administrators, representatives, executors, successors and to the maximum extent permitted by law, agrees that he has not filed, nor will file, a lawsuit asserting any claims which are released by this general 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. Employee understands that nothing in this Agreement and General Release (including but not limited to the release of claims, promise not to sue, and confidentiality, cooperation, non-disparagement, and return of property provisions) (a) limits or affects his right to challenge the validity of this Release under the ADEA or the Older Worker Protection Act (“OWBPA”) or (b) prevents Employee from filing a charge or complaint with or from participating in an investigation or proceeding conducted by the Equal Employment Opportunity Commission (“EEOC”), the National Labor Relations Board (“NLRB”), the Securities and Exchange Commission (“SEC”), or any other federal, state or local agency charged with the enforcement of any laws, including providing documents or other information, or (c) prevents Employee from exercising his rights under Section 7 of the National Labor Relations Act (“NLRA”) to engage in protected, concerted activity with other employees, although by signing this Agreement and General Release Employee is waiving his right to recover any individual relief (including backpay, frontpay, reinstatement or other legal or equitable relief) in any charge, complaint, or lawsuit or other proceeding brought by Employee or on his behalf by any third party, except for any right Employee may have to receive a payment from a government agency (and not the Company) for information provided to the government agency.
|
(e)
|
This General Release specifically excludes Employee’s indemnification as an officer and employee of the Company or any affiliate thereof, coverage under any officers’ and directors’ liability insurance policies, and rights of defense (or the cost thereof) or indemnification under the Company’s bylaws or charter or resolution of the Company’s Board of Directors. This General Release also specifically excludes Employee’s rights to his vested employee benefits. Nothing contained in this Release shall release Employee from his obligations, including any obligations to abide by the restrictive covenants in the Restrictive Covenant Agreement that continue or are to be performed following termination of employment.
|
(f)
|
Nothing contained in this Agreement is intended to restrict Employee’s right and responsibility to give truthful testimony under oath or precludes Employee from participating in an investigation, filing a charge, or otherwise communicating with the EEOC, the SEC, the NLRB, or other federal, state or local government agency.
|
(g)
|
The provisions of this general release of claims 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 general release shall become effective and enforceable on the eighth day following execution by Employee, provided he does not exercise his right of revocation as described above. If Employee fails to sign this Agreement or revokes his signature, this Agreement will be without force or effect.
|
(h)
|
, Nothing in this Agreement prohibits Employee from reporting an event that Employee reasonably and in good faith believes is a violation of law to the relevant law-enforcement agency (such as the SEC, EEOC, NLRB or Department of Labor), or from cooperating in an investigation conducted by such a government agency. This may include disclosure of
|
IV.
|
Non-Disparagement
|
V.
|
Cooperation
|
(a)
|
Employee further agrees that, subject to reimbursement of reasonable expenses, he will cooperate fully with the Company and its counsel with respect to any matter (including any pending or future litigation, investigations, or governmental proceedings) which relates to matters with which Employee was involved during his employment with the Company. Employee will render such cooperation in a timely manner upon reasonable notice from the Company.
|
(b)
|
Employee further agrees that within five (5) business days after the Termination Date, Employee will update his professional profiles on any social media or other social networking sites to delete any references to his status as an officer of the Company and remove PHH Corporation as his current employer.
|
VI.
|
Return of Company Property
.
|
VII.
|
Arbitration
|
VIII.
|
Miscellaneous
|
(a)
|
No Admission of Liability
. This Agreement is not to be construed as an admission of any violation of any federal, state or local statute, ordinance or regulation or of any duty owed by the Company or any other person to Employee, or by Employee or any other person to the Company.
|
(b)
|
Absence of Reliance
. Employee acknowledges that in agreeing to this Agreement, she has not relied in any way upon representations or statements of the Company other than those representations or statements set forth in this Agreement.
|
(c)
|
No Reinstatement
. Employee agrees that he will not apply for reinstatement with the Company or any other member of the Company or seek in any way to be reinstated, re-employed or hired by the Company or any other member of the Company in the future.
|
(d)
|
Section Headings
. The section headings are solely for convenience of reference and shall not in any way affect the interpretation of this Agreement.
|
(e)
|
409A Compliance
. With the exception of the terms of any outstanding long term incentive awards, the parties agree that the payments and benefits under Section II of this Agreement will, to the maximum extent possible, not be subject to the 6 month delay in payment described in Section 409A of the Internal Revenue Code and the Treasury Regulations thereunder (“
Section 409A
”) due to application of exemptions under Section 409A, including without limitation Treasury Regulations Section 1.409A-1(b)(9)(iii) (the “two times, two year rule”). However, Employee agrees that if Employee is a “specified employee” under Section 409A, then any amounts that are considered deferred compensation subject to Section 409A will, to the extent necessary to comply with Section 409A, be subject to a 6-month delay provided in Section 409A. For purposes of Section 409Athe right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments. With respect to any reimbursement of expenses of, or any provision of in-kind benefits to, Employee, as specified under this Agreement, that are not exempt from Section 409A, such reimbursement of expenses or provision of in-kind benefits shall be subject to the following conditions: (1) the expenses eligible for reimbursement or the amount of in-kind benefits provided in one taxable year shall not affect the expenses eligible for reimbursement or the amount of in-kind benefits provided in any other taxable year; (2) the reimbursement of an eligible expense shall be made no later than the end of the year after the year in which such expense was incurred; and (3) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.
|
(f)
|
Notice
. Notices and all other communications provided for in this Agreement 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, to the Company at its corporate headquarters address, to the attention of the Secretary of the Company, or to Employee at the home address most recently communicated by Employee to the Company in writing.
|
(g)
|
Successors and Assigns
. This Agreement will inure to the benefit of and be binding upon the Company and Employee and their respective successors, executors, administrators and heirs. Employee may not make any assignment of this Agreement or any interest herein, by operation of law or otherwise. The Company may assign this Agreement to any successor and business by means of liquidation, dissolution, merger, consolidation, transfer of assets, or otherwise, without the written consent of Employee.
|
(h)
|
Severability
. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law. However, if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other provision, and this Agreement will be reformed, construed and enforced as though the invalid, illegal or unenforceable provision had never been herein contained.
|
(i)
|
Entire Agreement; Amendments
. Except as otherwise expressly provided herein and in the Agreements attached hereto as
Exhibits A and B,
this Agreement contains the entire agreement and understanding of the Parties hereto relating to the subject matter hereof, and merges and supersedes all prior and contemporaneous discussions, agreements and understandings of every nature relating to the subject matter hereof. Except as otherwise expressly provided herein and in the Agreement attached hereto as
Exhibits A and B
and in outstanding long term and other incentive award agreements listed on
Exhibit C,
this Agreement shall control in the event of a conflict with any other agreement or document. This Agreement may not be changed or modified, except by an agreement in writing signed by each of the Parties hereto.
|
(j)
|
Governing Law
. This Agreement will be governed by, and enforced in accordance with, the laws of the State of New Jersey without regard to the application of the principles of conflicts of laws.
|
(k)
|
Counterparts and Facsimiles
. This Agreement may be executed, including execution by facsimile signature, in multiple counterparts, each of which will be deemed an original, and all of which together will be deemed to be one and the same instrument.
|
I.
|
Last Day of Employment
|
II.
|
Consideration and Acknowledgement of Certain Obligations
|
(a)
|
Employee is bound by the provisions of the Restrictive Covenant Agreement attached hereto as
Exhibit A
.
|
(b)
|
Consistent with the Letter, Company shall pay Employee in an amount equal to the cost of premiums for COBRA coverage upon loss of coverage under the Company’s group health plan due to his termination on the Termination Date for a period of [12 or 24 months] from the Termination Date. The Company will impute the amount of this payment as taxable income to Employee.
|
(c)
|
Consistent with the Letter, Company shall pay Employee severance in an amount equal to [12 or 24 months] of Employee’s annual base salary as of the effective date of the Letter [BASE SALARY])). Such severance payments shall be subject to applicable withholding taxes. Employee’s severance shall be payable in bi-weekly installments in accordance with the Company’s normal payroll practices, with the first payment commencing the first payroll period after the date on which the Release becomes irrevocable following the Termination Date.
|
(d)
|
Consistent with the Letter, Company shall pay Employee one hundred percent (100%) of the target amount of Employee’s 2017 Management Incentive Plan Award in substantially equal installments no less frequently than monthly during the [12 or 24] month period following Employee’s termination from employment.
|
(e)
|
The Company shall provide Employee with certain payments, if any, in accordance with outstanding long term incentive and other awards, as listed on
Exhibit C
, subject to all terms and conditions of the applicable awards and plans, consistent with a termination without cause and the Letter Agreement, effective on the Termination Date;
|
(f)
|
Consistent with the Letter, Company shall provide Employee with up to $18,000 in reasonable outplacement services by a provider selected by the Company to be used within 24 months of the Termination Date;
|
(g)
|
None of the foregoing payments or benefits will be made or provided if this Agreement and the Release have not been signed by Employee, and the Release has not become irrevocable, on or before [DEADLINE DATE]. Payment and provision of the foregoing benefits are conditioned on Employee’s continued compliance with the restrictive covenants in this Agreement, and other post-employment obligations that survive Employee’s termination.
|
III.
|
General Release of Claims
|
(a)
|
Employee without limitation hereby irrevocably and unconditionally releases and forever discharges the Company, its subsidiaries, divisions, affiliates, related entities, officers, agents, directors, supervisors, employees, representatives, successors and assigns, and all persons acting by, through, under, or in concert with any of them (collectively, “Released Parties”) from any and all charges, complaints, claims, causes of action, demands, controversies, agreements, promises, damages and liabilities of any kind or nature whatsoever, both at law and equity, known or unknown, suspected or unsuspected, anticipated or unanticipated (hereinafter referred to as “claim” or “claims”), arising from conduct occurring on or before the effective date of this Agreement and General Release, including without limitation any claims incidental to or arising out of Employee’s employment with the Company or the termination thereof with respect to all applicable federal, state or local fair employment practices laws, 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 et seq. (“ADEA “),the New Jersey Law Against Discrimination, N.J. Stat. Ann. § 10:5-1 et seq., and the New Jersey Equal Pay Act, N.J. Stat. Ann. § 34:11-56.1 et seq., the New Jersey Family Leave Act, N.J. Stat. Ann. § 34:11B-1 et seq., the New Jersey Conscientious Employee Protection Act, N.J. Stat. Ann. § 34:19-1 et seq., the Millville Dallas Airmotive Plant Job Loss Notification Act, P.L. 2007, c.212, C.34:21-2, the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §2101
et seq
. (“WARN”), all as amended, any other alleged violation of any local, state or federal law, regulation, ordinance, public policy, and/or any contract, tort, or fraud related claim arising under common law. This provision is intended by the parties to be all encompassing and to act as a full and total release of any claim, that Employee might have or has had, that exists or ever has existed on or to the effective date of this Agreement and General Release. In this regard, Employee agrees that by signing this Agreement and General Release and by acceptance of the payment described above, Employee gives up any and all rights EMPLOYEE may have to file any claim or action which Employee may now have, has ever had, or may in the future have, with respect to any matter pertaining to or arising from Employee’s employment with the Company. In this regard, Employee agrees that this Agreement and General Release covers both known and unknown claims and actions.
|
(b)
|
The parties hereby acknowledge and agree that nothing in the Agreement and General Release shall be construed as a release of Employee’s non-waivable statutory rights under applicable federal and state law or rights to seek the enforcement of the Company’s obligations under this Agreement and General Release.
|
(c)
|
Older Worker Benefit Protection Act
. As may be applicable to Employee under the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621,
et
seq
.), (“ADEA”), Employee understands and agrees that:
|
i.
|
Rights or claims under the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621,
et
seq
.) are being waived, except as provided herein.
|
ii.
|
He has had the opportunity of a full 21 days within which to consider this Agreement and release provided herein before signing it, and if he has not taken the full time period, he has done so knowingly and voluntarily, thereby expressly waiving this time period and agreeing not to assert the invalidity of this Agreement and the general release provided herein or any portion thereof on this basis.
|
iii.
|
He has carefully read and fully understands all of the provisions of this Agreement and general release provided herein and is knowingly and voluntarily agreeing to be legally bound by all of the terms set forth in this Agreement.
|
iv.
|
He is, through this Agreement and the general release provided herein, releasing the Released Parties from any and all claims he may have against the Company or such individuals.
|
v.
|
He is hereby advised in writing to consider the terms of this Agreement and the general release provided herein and consult with an attorney of his choice prior to signing this Agreement.
|
vi.
|
He has a full 7 days following the execution of this Agreement to revoke this Agreement and the general release provided herein, and has been and hereby is advised in writing that this Agreement and general release shall not become effective or enforceable until the revocation period has expired. Revocation of this Agreement and the general release provided herein must be made in writing and must be received by the Vice President, Assistant General Counsel of PHH Corporation, 3000 Leadenhall Road, Mail Stop LGL, Mt. Laurel, NJ 08054 no later than close of business on the seventh full day after the execution of this Agreement and General Release.
|
vii.
|
He understands that rights or claims under the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621,
et
seq
.) that may arise after the date this Agreement and General Release is signed are not waived.
|
(d)
|
Employee, for himself, his heirs, administrators, representatives, executors, successors and to the maximum extent permitted by law, agrees that he has not filed, nor will file, a lawsuit asserting any claims which are released by this general 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. Employee understands that nothing in this Agreement and General Release (including but not limited to the release of claims, promise not to sue, and confidentiality, cooperation, non-disparagement, and return of property provisions) (a) limits or affects his right to challenge the validity of this Release under the ADEA or the Older Worker Protection Act (“OWBPA”) or (b) prevents Employee from filing a charge or complaint with or from participating in an investigation or proceeding conducted by the Equal Employment Opportunity Commission (“EEOC”), the National Labor Relations Board (“NLRB”), the Securities and Exchange Commission (“SEC”), or any other federal, state or local agency charged with the enforcement of any laws, including providing documents or other information, or (c) prevents Employee from exercising his rights under Section 7 of the National Labor Relations Act (“NLRA”) to engage in protected, concerted activity with other employees, although by signing this Agreement and General Release Employee is waiving his right to recover any individual relief (including backpay, frontpay, reinstatement or other legal or equitable relief) in any charge, complaint, or lawsuit or other proceeding brought by Employee or on his behalf by any third party, except for any right Employee may have to receive a payment from a government agency (and not the Company) for information provided to the government agency.
|
(e)
|
This General Release specifically excludes Employee’s indemnification as an officer and employee of the Company or any affiliate thereof, coverage under any officers’ and directors’ liability insurance policies, and rights of defense (or the cost thereof) or indemnification under the Company’s bylaws or charter or resolution of the Company’s Board of Directors. This General Release also specifically excludes Employee’s rights to his vested employee benefits. Nothing contained in this Release shall release Employee from his obligations, including any obligations to abide by the restrictive covenants in the Restrictive Covenant Agreement that continue or are to be performed following termination of employment.
|
(f)
|
Nothing contained in this Agreement is intended to restrict Employee’s right and responsibility to give truthful testimony under oath or precludes Employee from participating in an investigation, filing a charge, or otherwise communicating with the EEOC, the SEC, the NLRB, or other federal, state or local government agency.
|
(g)
|
The provisions of this general release of claims 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 general release shall become effective and enforceable on the eighth day following execution by Employee, provided he does not exercise his right of revocation as described above. If Employee fails to sign this Agreement or revokes his signature, this Agreement will be without force or effect.
|
(h)
|
, Nothing in this Agreement prohibits Employee from reporting an event that Employee reasonably and in good faith believes is a violation of law to the relevant law-enforcement agency (such as the SEC, EEOC, NLRB or Department of Labor), or from cooperating in an investigation conducted by such a government agency. This may include disclosure of
|
IV.
|
Non-Disparagement
|
V.
|
Cooperation
|
(a)
|
Employee further agrees that, subject to reimbursement of reasonable expenses, he will cooperate fully with the Company and its counsel with respect to any matter (including any pending or future litigation, investigations, or governmental proceedings) which relates to matters with which Employee was involved during his employment with the Company. Employee will render such cooperation in a timely manner upon reasonable notice from the Company.
|
(b)
|
Employee further agrees that within five (5) business days after the Termination Date, Employee will update his professional profiles on any social media or other social networking sites to delete any references to his status as an officer of the Company and remove PHH Corporation as his current employer.
|
VI.
|
Return of Company Property
.
|
VII.
|
Arbitration
|
VIII.
|
Miscellaneous
|
(a)
|
No Admission of Liability
. This Agreement is not to be construed as an admission of any violation of any federal, state or local statute, ordinance or regulation or of any duty owed by the Company or any other person to Employee, or by Employee or any other person to the Company.
|
(b)
|
Absence of Reliance
. Employee acknowledges that in agreeing to this Agreement, she has not relied in any way upon representations or statements of the Company other than those representations or statements set forth in this Agreement.
|
(c)
|
No Reinstatement
. Employee agrees that he will not apply for reinstatement with the Company or any other member of the Company or seek in any way to be reinstated, re-employed or hired by the Company or any other member of the Company in the future.
|
(d)
|
Section Headings
. The section headings are solely for convenience of reference and shall not in any way affect the interpretation of this Agreement.
|
(e)
|
409A Compliance
. With the exception of the terms of any outstanding long term incentive awards, the parties agree that the payments and benefits under Section II of this Agreement will, to the maximum extent possible, not be subject to the 6 month delay in payment described in Section 409A of the Internal Revenue Code and the Treasury Regulations thereunder (“
Section 409A
”) due to application of exemptions under Section 409A, including without limitation Treasury Regulations Section 1.409A-1(b)(9)(iii) (the “two times, two year rule”). However, Employee agrees that if Employee is a “specified employee” under Section 409A, then any amounts that are considered deferred compensation subject to Section 409A will, to the extent necessary to comply with Section 409A, be subject to a 6-month delay provided in Section 409A. For purposes of Section 409Athe right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments. With respect to any reimbursement of expenses of, or any provision of in-kind benefits to, Employee, as specified under this Agreement, that are not exempt from Section 409A, such reimbursement of expenses or provision of in-kind benefits shall be subject to the following conditions: (1) the expenses eligible for reimbursement or the amount of in-kind benefits provided in one taxable year shall not affect the expenses eligible for reimbursement or the amount of in-kind benefits provided in any other taxable year; (2) the reimbursement of an eligible expense shall be made no later than the end of the year after the year in which such expense was incurred; and (3) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.
|
(f)
|
Notice
. Notices and all other communications provided for in this Agreement 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, to the Company at its corporate headquarters address, to the attention of the Secretary of the Company, or to Employee at the home address most recently communicated by Employee to the Company in writing.
|
(g)
|
Successors and Assigns
. This Agreement will inure to the benefit of and be binding upon the Company and Employee and their respective successors, executors, administrators and heirs. Employee may not make any assignment of this Agreement or any interest herein, by operation of law or otherwise. The Company may assign this Agreement to any successor and business by means of liquidation, dissolution, merger, consolidation, transfer of assets, or otherwise, without the written consent of Employee.
|
(h)
|
Severability
. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law. However, if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other provision, and this Agreement will be reformed, construed and enforced as though the invalid, illegal or unenforceable provision had never been herein contained.
|
(i)
|
Entire Agreement; Amendments
. Except as otherwise expressly provided herein and in the Agreements attached hereto as
Exhibits A and B,
this Agreement contains the entire agreement and understanding of the Parties hereto relating to the subject matter hereof, and merges and supersedes all prior and contemporaneous discussions, agreements and understandings of every nature relating to the subject matter hereof. Except as otherwise expressly provided herein and in the Agreement attached hereto as
Exhibits A and B
and in outstanding long term and other incentive award agreements listed on
Exhibit C,
this Agreement shall control in the event of a conflict with any other agreement or document. This Agreement may not be changed or modified, except by an agreement in writing signed by each of the Parties hereto.
|
(j)
|
Governing Law
. This Agreement will be governed by, and enforced in accordance with, the laws of the State of New Jersey without regard to the application of the principles of conflicts of laws.
|
(k)
|
Counterparts and Facsimiles
. This Agreement may be executed, including execution by facsimile signature, in multiple counterparts, each of which will be deemed an original, and all of which together will be deemed to be one and the same instrument.
|
I.
|
Last Day of Employment
|
II.
|
Consideration and Acknowledgement of Certain Obligations
|
(a)
|
Employee is bound by the provisions of the Restrictive Covenant Agreement attached hereto as
Exhibit A
.
|
(b)
|
Consistent with the Letter, Company shall pay Employee in an amount equal to the cost of premiums for COBRA coverage upon loss of coverage under the Company’s group health plan due to his termination on the Termination Date for a period of [12 or 24 months] from the Termination Date. The Company will impute the amount of this payment as taxable income to Employee.
|
(c)
|
Consistent with the Letter, Company shall pay Employee severance in an amount equal to [12 or 24 months] of Employee’s annual base salary as of the effective date of the Letter [BASE SALARY])). Such severance payments shall be subject to applicable withholding taxes. Employee’s severance shall be payable in bi-weekly installments in accordance with the Company’s normal payroll practices, with the first payment commencing the first payroll period after the date on which the Release becomes irrevocable following the Termination Date.
|
(d)
|
Consistent with the Letter, Company shall pay Employee one hundred percent (100%) of the target amount of Employee’s 2017 Management Incentive Plan Award in substantially equal installments no less frequently than monthly during the [12 or 24] month period following Employee’s termination from employment.
|
(e)
|
The Company shall provide Employee with certain payments, if any, in accordance with outstanding long term incentive and other awards, as listed on
Exhibit C
, subject to all terms and conditions of the applicable awards and plans, consistent with a termination without cause and the Letter Agreement, effective on the Termination Date;
|
(f)
|
Consistent with the Letter, Company shall provide Employee with up to $18,000 in reasonable outplacement services by a provider selected by the Company to be used within 24 months of the Termination Date;
|
(g)
|
None of the foregoing payments or benefits will be made or provided if this Agreement and the Release have not been signed by Employee, and the Release has not become irrevocable, on or before [DEADLINE DATE]. Payment and provision of the foregoing benefits are conditioned on Employee’s continued compliance with the restrictive covenants in this Agreement, and other post-employment obligations that survive Employee’s termination.
|
III.
|
General Release of Claims
|
(a)
|
Employee without limitation hereby irrevocably and unconditionally releases and forever discharges the Company, its subsidiaries, divisions, affiliates, related entities, officers, agents, directors, supervisors, employees, representatives, successors and assigns, and all persons acting by, through, under, or in concert with any of them (collectively, “Released Parties”) from any and all charges, complaints, claims, causes of action, demands, controversies, agreements, promises, damages and liabilities of any kind or nature whatsoever, both at law and equity, known or unknown, suspected or unsuspected, anticipated or unanticipated (hereinafter referred to as “claim” or “claims”), arising from conduct occurring on or before the effective date of this Agreement and General Release, including without limitation any claims incidental to or arising out of Employee’s employment with the Company or the termination thereof with respect to all applicable federal, state or local fair employment practices laws, 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 et seq. (“ADEA “),the New Jersey Law Against Discrimination, N.J. Stat. Ann. § 10:5-1 et seq., and the New Jersey Equal Pay Act, N.J. Stat. Ann. § 34:11-56.1 et seq., the New Jersey Family Leave Act, N.J. Stat. Ann. § 34:11B-1 et seq., the New Jersey Conscientious Employee Protection Act, N.J. Stat. Ann. § 34:19-1 et seq., the Millville Dallas Airmotive Plant Job Loss Notification Act, P.L. 2007, c.212, C.34:21-2, the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §2101
et seq
. (“WARN”), all as amended, any other alleged violation of any local, state or federal law, regulation, ordinance, public policy, and/or any contract, tort, or fraud related claim arising under common law. This provision is intended by the parties to be all encompassing and to act as a full and total release of any claim, that Employee might have or has had, that exists or ever has existed on or to the effective date of this Agreement and General Release. In this regard, Employee agrees that by signing this Agreement and General Release and by acceptance of the payment described above, Employee gives up any and all rights EMPLOYEE may have to file any claim or action which Employee may now have, has ever had, or may in the future have, with respect to any matter pertaining to or arising from Employee’s employment with the Company. In this regard, Employee agrees that this Agreement and General Release covers both known and unknown claims and actions.
|
(b)
|
The parties hereby acknowledge and agree that nothing in the Agreement and General Release shall be construed as a release of Employee’s non-waivable statutory rights under applicable federal and state law or rights to seek the enforcement of the Company’s obligations under this Agreement and General Release.
|
(c)
|
Older Worker Benefit Protection Act
. As may be applicable to Employee under the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621,
et
seq
.), (“ADEA”), Employee understands and agrees that:
|
i.
|
Rights or claims under the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621,
et
seq
.) are being waived, except as provided herein.
|
ii.
|
He has had the opportunity of a full 21 days within which to consider this Agreement and release provided herein before signing it, and if he has not taken the full time period, he has done so knowingly and voluntarily, thereby expressly waiving this time period and agreeing not to assert the invalidity of this Agreement and the general release provided herein or any portion thereof on this basis.
|
iii.
|
He has carefully read and fully understands all of the provisions of this Agreement and general release provided herein and is knowingly and voluntarily agreeing to be legally bound by all of the terms set forth in this Agreement.
|
iv.
|
He is, through this Agreement and the general release provided herein, releasing the Released Parties from any and all claims he may have against the Company or such individuals.
|
v.
|
He is hereby advised in writing to consider the terms of this Agreement and the general release provided herein and consult with an attorney of his choice prior to signing this Agreement.
|
vi.
|
He has a full 7 days following the execution of this Agreement to revoke this Agreement and the general release provided herein, and has been and hereby is advised in writing that this Agreement and general release shall not become effective or enforceable until the revocation period has expired. Revocation of this Agreement and the general release provided herein must be made in writing and must be received by the Vice President, Assistant General Counsel of PHH Corporation, 3000 Leadenhall Road, Mail Stop LGL, Mt. Laurel, NJ 08054 no later than close of business on the seventh full day after the execution of this Agreement and General Release.
|
vii.
|
He understands that rights or claims under the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621,
et
seq
.) that may arise after the date this Agreement and General Release is signed are not waived.
|
(d)
|
Employee, for himself, his heirs, administrators, representatives, executors, successors and to the maximum extent permitted by law, agrees that he has not filed, nor will file, a lawsuit asserting any claims which are released by this general 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. Employee understands that nothing in this Agreement and General Release (including but not limited to the release of claims, promise not to sue, and confidentiality, cooperation, non-disparagement, and return of property provisions) (a) limits or affects his right to challenge the validity of this Release under the ADEA or the Older Worker Protection Act (“OWBPA”) or (b) prevents Employee from filing a charge or complaint with or from participating in an investigation or proceeding conducted by the Equal Employment Opportunity Commission (“EEOC”), the National Labor Relations Board (“NLRB”), the Securities and Exchange Commission (“SEC”), or any other federal, state or local agency charged with the enforcement of any laws, including providing documents or other information, or (c) prevents Employee from exercising his rights under Section 7 of the National Labor Relations Act (“NLRA”) to engage in protected, concerted activity with other employees, although by signing this Agreement and General Release Employee is waiving his right to recover any individual relief (including backpay, frontpay, reinstatement or other legal or equitable relief) in any charge, complaint, or lawsuit or other proceeding brought by Employee or on his behalf by any third party, except for any right Employee may have to receive a payment from a government agency (and not the Company) for information provided to the government agency.
|
(e)
|
This General Release specifically excludes Employee’s indemnification as an officer and employee of the Company or any affiliate thereof, coverage under any officers’ and directors’ liability insurance policies, and rights of defense (or the cost thereof) or indemnification under the Company’s bylaws or charter or resolution of the Company’s Board of Directors. This General Release also specifically excludes Employee’s rights to his vested employee benefits. Nothing contained in this Release shall release Employee from his obligations, including any obligations to abide by the restrictive covenants in the Restrictive Covenant Agreement that continue or are to be performed following termination of employment.
|
(f)
|
Nothing contained in this Agreement is intended to restrict Employee’s right and responsibility to give truthful testimony under oath or precludes Employee from participating in an investigation, filing a charge, or otherwise communicating with the EEOC, the SEC, the NLRB, or other federal, state or local government agency.
|
(g)
|
The provisions of this general release of claims 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 general release shall become effective and enforceable on the eighth day following execution by Employee, provided he does not exercise his right of revocation as described above. If Employee fails to sign this Agreement or revokes his signature, this Agreement will be without force or effect.
|
(h)
|
, Nothing in this Agreement prohibits Employee from reporting an event that Employee reasonably and in good faith believes is a violation of law to the relevant law-enforcement agency (such as the SEC, EEOC, NLRB or Department of Labor), or from cooperating in an investigation conducted by such a government agency. This may include disclosure of
|
IV.
|
Non-Disparagement
|
V.
|
Cooperation
|
(a)
|
Employee further agrees that, subject to reimbursement of reasonable expenses, he will cooperate fully with the Company and its counsel with respect to any matter (including any pending or future litigation, investigations, or governmental proceedings) which relates to matters with which Employee was involved during his employment with the Company. Employee will render such cooperation in a timely manner upon reasonable notice from the Company.
|
(b)
|
Employee further agrees that within five (5) business days after the Termination Date, Employee will update his professional profiles on any social media or other social networking sites to delete any references to his status as an officer of the Company and remove PHH Corporation as his current employer.
|
VI.
|
Return of Company Property
.
|
VII.
|
Arbitration
|
VIII.
|
Miscellaneous
|
(a)
|
No Admission of Liability
. This Agreement is not to be construed as an admission of any violation of any federal, state or local statute, ordinance or regulation or of any duty owed by the Company or any other person to Employee, or by Employee or any other person to the Company.
|
(b)
|
Absence of Reliance
. Employee acknowledges that in agreeing to this Agreement, she has not relied in any way upon representations or statements of the Company other than those representations or statements set forth in this Agreement.
|
(c)
|
No Reinstatement
. Employee agrees that he will not apply for reinstatement with the Company or any other member of the Company or seek in any way to be reinstated, re-employed or hired by the Company or any other member of the Company in the future.
|
(d)
|
Section Headings
. The section headings are solely for convenience of reference and shall not in any way affect the interpretation of this Agreement.
|
(e)
|
409A Compliance
. With the exception of the terms of any outstanding long term incentive awards, the parties agree that the payments and benefits under Section II of this Agreement will, to the maximum extent possible, not be subject to the 6 month delay in payment described in Section 409A of the Internal Revenue Code and the Treasury Regulations thereunder (“
Section 409A
”) due to application of exemptions under Section 409A, including without limitation Treasury Regulations Section 1.409A-1(b)(9)(iii) (the “two times, two year rule”). However, Employee agrees that if Employee is a “specified employee” under Section 409A, then any amounts that are considered deferred compensation subject to Section 409A will, to the extent necessary to comply with Section 409A, be subject to a 6-month delay provided in Section 409A. For purposes of Section 409Athe right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments. With respect to any reimbursement of expenses of, or any provision of in-kind benefits to, Employee, as specified under this Agreement, that are not exempt from Section 409A, such reimbursement of expenses or provision of in-kind benefits shall be subject to the following conditions: (1) the expenses eligible for reimbursement or the amount of in-kind benefits provided in one taxable year shall not affect the expenses eligible for reimbursement or the amount of in-kind benefits provided in any other taxable year; (2) the reimbursement of an eligible expense shall be made no later than the end of the year after the year in which such expense was incurred; and (3) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.
|
(f)
|
Notice
. Notices and all other communications provided for in this Agreement 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, to the Company at its corporate headquarters address, to the attention of the Secretary of the Company, or to Employee at the home address most recently communicated by Employee to the Company in writing.
|
(g)
|
Successors and Assigns
. This Agreement will inure to the benefit of and be binding upon the Company and Employee and their respective successors, executors, administrators and heirs. Employee may not make any assignment of this Agreement or any interest herein, by operation of law or otherwise. The Company may assign this Agreement to any successor and business by means of liquidation, dissolution, merger, consolidation, transfer of assets, or otherwise, without the written consent of Employee.
|
(h)
|
Severability
. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law. However, if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other provision, and this Agreement will be reformed, construed and enforced as though the invalid, illegal or unenforceable provision had never been herein contained.
|
(i)
|
Entire Agreement; Amendments
. Except as otherwise expressly provided herein and in the Agreements attached hereto as
Exhibits A and B,
this Agreement contains the entire agreement and understanding of the Parties hereto relating to the subject matter hereof, and merges and supersedes all prior and contemporaneous discussions, agreements and understandings of every nature relating to the subject matter hereof. Except as otherwise expressly provided herein and in the Agreement attached hereto as
Exhibits A and B
and in outstanding long term and other incentive award agreements listed on
Exhibit C,
this Agreement shall control in the event of a conflict with any other agreement or document. This Agreement may not be changed or modified, except by an agreement in writing signed by each of the Parties hereto.
|
(j)
|
Governing Law
. This Agreement will be governed by, and enforced in accordance with, the laws of the State of New Jersey without regard to the application of the principles of conflicts of laws.
|
(k)
|
Counterparts and Facsimiles
. This Agreement may be executed, including execution by facsimile signature, in multiple counterparts, each of which will be deemed an original, and all of which together will be deemed to be one and the same instrument.
|
I.
|
Last Day of Employment
|
II.
|
Consideration and Acknowledgement of Certain Obligations
|
(a)
|
Employee is bound by the provisions of the Restrictive Covenant Agreement attached hereto as
Exhibit A
.
|
(b)
|
Consistent with the Letter, Company shall pay Employee in an amount equal to the cost of premiums for COBRA coverage upon loss of coverage under the Company’s group health plan due to his termination on the Termination Date for a period of [12 or 24 months] from the Termination Date. The Company will impute the amount of this payment as taxable income to Employee.
|
(c)
|
Consistent with the Letter, Company shall pay Employee severance in an amount equal to [12 or 24 months] of Employee’s annual base salary as of the effective date of the Letter [BASE SALARY])). Such severance payments shall be subject to applicable withholding taxes. Employee’s severance shall be payable in bi-weekly installments in accordance with the Company’s normal payroll practices, with the first payment commencing the first payroll period after the date on which the Release becomes irrevocable following the Termination Date.
|
(d)
|
Consistent with the Letter, Company shall pay Employee one hundred percent (100%) of the target amount of Employee’s 2017 Management Incentive Plan Award in substantially equal installments no less frequently than monthly during the [12 or 24] month period following Employee’s termination from employment.
|
(e)
|
The Company shall provide Employee with certain payments, if any, in accordance with outstanding long term incentive and other awards, as listed on
Exhibit C
, subject to all terms and conditions of the applicable awards and plans, consistent with a termination without cause and the Letter Agreement, effective on the Termination Date;
|
(f)
|
Consistent with the Letter, Company shall provide Employee with up to $18,000 in reasonable outplacement services by a provider selected by the Company to be used within 24 months of the Termination Date;
|
(g)
|
None of the foregoing payments or benefits will be made or provided if this Agreement and the Release have not been signed by Employee, and the Release has not become irrevocable, on or before [DEADLINE DATE]. Payment and provision of the foregoing benefits are conditioned on Employee’s continued compliance with the restrictive covenants in this Agreement, and other post-employment obligations that survive Employee’s termination.
|
III.
|
General Release of Claims
|
(a)
|
Employee without limitation hereby irrevocably and unconditionally releases and forever discharges the Company, its subsidiaries, divisions, affiliates, related entities, officers, agents, directors, supervisors, employees, representatives, successors and assigns, and all persons acting by, through, under, or in concert with any of them (collectively, “Released Parties”) from any and all charges, complaints, claims, causes of action, demands, controversies, agreements, promises, damages and liabilities of any kind or nature whatsoever, both at law and equity, known or unknown, suspected or unsuspected, anticipated or unanticipated (hereinafter referred to as “claim” or “claims”), arising from conduct occurring on or before the effective date of this Agreement and General Release, including without limitation any claims incidental to or arising out of Employee’s employment with the Company or the termination thereof with respect to all applicable federal, state or local fair employment practices laws, 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 et seq. (“ADEA “),the New Jersey Law Against Discrimination, N.J. Stat. Ann. § 10:5-1 et seq., and the New Jersey Equal Pay Act, N.J. Stat. Ann. § 34:11-56.1 et seq., the New Jersey Family Leave Act, N.J. Stat. Ann. § 34:11B-1 et seq., the New Jersey Conscientious Employee Protection Act, N.J. Stat. Ann. § 34:19-1 et seq., the Millville Dallas Airmotive Plant Job Loss Notification Act, P.L. 2007, c.212, C.34:21-2, the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §2101
et seq
. (“WARN”), all as amended, any other alleged violation of any local, state or federal law, regulation, ordinance, public policy, and/or any contract, tort, or fraud related claim arising under common law. This provision is intended by the parties to be all encompassing and to act as a full and total release of any claim, that Employee might have or has had, that exists or ever has existed on or to the effective date of this Agreement and General Release. In this regard, Employee agrees that by signing this Agreement and General Release and by acceptance of the payment described above, Employee gives up any and all rights EMPLOYEE may have to file any claim or action which Employee may now have, has ever had, or may in the future have, with respect to any matter pertaining to or arising from Employee’s employment with the Company. In this regard, Employee agrees that this Agreement and General Release covers both known and unknown claims and actions.
|
(b)
|
The parties hereby acknowledge and agree that nothing in the Agreement and General Release shall be construed as a release of Employee’s non-waivable statutory rights under applicable federal and state law or rights to seek the enforcement of the Company’s obligations under this Agreement and General Release.
|
(c)
|
Older Worker Benefit Protection Act
. As may be applicable to Employee under the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621,
et
seq
.), (“ADEA”), Employee understands and agrees that:
|
i.
|
Rights or claims under the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621,
et
seq
.) are being waived, except as provided herein.
|
ii.
|
He has had the opportunity of a full 21 days within which to consider this Agreement and release provided herein before signing it, and if he has not taken the full time period, he has done so knowingly and voluntarily, thereby expressly waiving this time period and agreeing not to assert the invalidity of this Agreement and the general release provided herein or any portion thereof on this basis.
|
iii.
|
He has carefully read and fully understands all of the provisions of this Agreement and general release provided herein and is knowingly and voluntarily agreeing to be legally bound by all of the terms set forth in this Agreement.
|
iv.
|
He is, through this Agreement and the general release provided herein, releasing the Released Parties from any and all claims he may have against the Company or such individuals.
|
v.
|
He is hereby advised in writing to consider the terms of this Agreement and the general release provided herein and consult with an attorney of his choice prior to signing this Agreement.
|
vi.
|
He has a full 7 days following the execution of this Agreement to revoke this Agreement and the general release provided herein, and has been and hereby is advised in writing that this Agreement and general release shall not become effective or enforceable until the revocation period has expired. Revocation of this Agreement and the general release provided herein must be made in writing and must be received by the Vice President, Assistant General Counsel of PHH Corporation, 3000 Leadenhall Road, Mail Stop LGL, Mt. Laurel, NJ 08054 no later than close of business on the seventh full day after the execution of this Agreement and General Release.
|
vii.
|
He understands that rights or claims under the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621,
et
seq
.) that may arise after the date this Agreement and General Release is signed are not waived.
|
(d)
|
Employee, for himself, his heirs, administrators, representatives, executors, successors and to the maximum extent permitted by law, agrees that he has not filed, nor will file, a lawsuit asserting any claims which are released by this general 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. Employee understands that nothing in this Agreement and General Release (including but not limited to the release of claims, promise not to sue, and confidentiality, cooperation, non-disparagement, and return of property provisions) (a) limits or affects his right to challenge the validity of this Release under the ADEA or the Older Worker Protection Act (“OWBPA”) or (b) prevents Employee from filing a charge or complaint with or from participating in an investigation or proceeding conducted by the Equal Employment Opportunity Commission (“EEOC”), the National Labor Relations Board (“NLRB”), the Securities and Exchange Commission (“SEC”), or any other federal, state or local agency charged with the enforcement of any laws, including providing documents or other information, or (c) prevents Employee from exercising his rights under Section 7 of the National Labor Relations Act (“NLRA”) to engage in protected, concerted activity with other employees, although by signing this Agreement and General Release Employee is waiving his right to recover any individual relief (including backpay, frontpay, reinstatement or other legal or equitable relief) in any charge, complaint, or lawsuit or other proceeding brought by Employee or on his behalf by any third party, except for any right Employee may have to receive a payment from a government agency (and not the Company) for information provided to the government agency.
|
(e)
|
This General Release specifically excludes Employee’s indemnification as an officer and employee of the Company or any affiliate thereof, coverage under any officers’ and directors’ liability insurance policies, and rights of defense (or the cost thereof) or indemnification under the Company’s bylaws or charter or resolution of the Company’s Board of Directors. This General Release also specifically excludes Employee’s rights to his vested employee benefits. Nothing contained in this Release shall release Employee from his obligations, including any obligations to abide by the restrictive covenants in the Restrictive Covenant Agreement that continue or are to be performed following termination of employment.
|
(f)
|
Nothing contained in this Agreement is intended to restrict Employee’s right and responsibility to give truthful testimony under oath or precludes Employee from participating in an investigation, filing a charge, or otherwise communicating with the EEOC, the SEC, the NLRB, or other federal, state or local government agency.
|
(g)
|
The provisions of this general release of claims 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 general release shall become effective and enforceable on the eighth day following execution by Employee, provided he does not exercise his right of revocation as described above. If Employee fails to sign this Agreement or revokes his signature, this Agreement will be without force or effect.
|
(h)
|
, Nothing in this Agreement prohibits Employee from reporting an event that Employee reasonably and in good faith believes is a violation of law to the relevant law-enforcement agency (such as the SEC, EEOC, NLRB or Department of Labor), or from cooperating in an investigation conducted by such a government agency. This may include disclosure of
|
IV.
|
Non-Disparagement
|
V.
|
Cooperation
|
(a)
|
Employee further agrees that, subject to reimbursement of reasonable expenses, he will cooperate fully with the Company and its counsel with respect to any matter (including any pending or future litigation, investigations, or governmental proceedings) which relates to matters with which Employee was involved during his employment with the Company. Employee will render such cooperation in a timely manner upon reasonable notice from the Company.
|
(b)
|
Employee further agrees that within five (5) business days after the Termination Date, Employee will update his professional profiles on any social media or other social networking sites to delete any references to his status as an officer of the Company and remove PHH Corporation as his current employer.
|
VI.
|
Return of Company Property
.
|
VII.
|
Arbitration
|
VIII.
|
Miscellaneous
|
(a)
|
No Admission of Liability
. This Agreement is not to be construed as an admission of any violation of any federal, state or local statute, ordinance or regulation or of any duty owed by the Company or any other person to Employee, or by Employee or any other person to the Company.
|
(b)
|
Absence of Reliance
. Employee acknowledges that in agreeing to this Agreement, she has not relied in any way upon representations or statements of the Company other than those representations or statements set forth in this Agreement.
|
(c)
|
No Reinstatement
. Employee agrees that he will not apply for reinstatement with the Company or any other member of the Company or seek in any way to be reinstated, re-employed or hired by the Company or any other member of the Company in the future.
|
(d)
|
Section Headings
. The section headings are solely for convenience of reference and shall not in any way affect the interpretation of this Agreement.
|
(e)
|
409A Compliance
. With the exception of the terms of any outstanding long term incentive awards, the parties agree that the payments and benefits under Section II of this Agreement will, to the maximum extent possible, not be subject to the 6 month delay in payment described in Section 409A of the Internal Revenue Code and the Treasury Regulations thereunder (“
Section 409A
”) due to application of exemptions under Section 409A, including without limitation Treasury Regulations Section 1.409A-1(b)(9)(iii) (the “two times, two year rule”). However, Employee agrees that if Employee is a “specified employee” under Section 409A, then any amounts that are considered deferred compensation subject to Section 409A will, to the extent necessary to comply with Section 409A, be subject to a 6-month delay provided in Section 409A. For purposes of Section 409Athe right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments. With respect to any reimbursement of expenses of, or any provision of in-kind benefits to, Employee, as specified under this Agreement, that are not exempt from Section 409A, such reimbursement of expenses or provision of in-kind benefits shall be subject to the following conditions: (1) the expenses eligible for reimbursement or the amount of in-kind benefits provided in one taxable year shall not affect the expenses eligible for reimbursement or the amount of in-kind benefits provided in any other taxable year; (2) the reimbursement of an eligible expense shall be made no later than the end of the year after the year in which such expense was incurred; and (3) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.
|
(f)
|
Notice
. Notices and all other communications provided for in this Agreement 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, to the Company at its corporate headquarters address, to the attention of the Secretary of the Company, or to Employee at the home address most recently communicated by Employee to the Company in writing.
|
(g)
|
Successors and Assigns
. This Agreement will inure to the benefit of and be binding upon the Company and Employee and their respective successors, executors, administrators and heirs. Employee may not make any assignment of this Agreement or any interest herein, by operation of law or otherwise. The Company may assign this Agreement to any successor and business by means of liquidation, dissolution, merger, consolidation, transfer of assets, or otherwise, without the written consent of Employee.
|
(h)
|
Severability
. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law. However, if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other provision, and this Agreement will be reformed, construed and enforced as though the invalid, illegal or unenforceable provision had never been herein contained.
|
(i)
|
Entire Agreement; Amendments
. Except as otherwise expressly provided herein and in the Agreements attached hereto as
Exhibits A and B,
this Agreement contains the entire agreement and understanding of the Parties hereto relating to the subject matter hereof, and merges and supersedes all prior and contemporaneous discussions, agreements and understandings of every nature relating to the subject matter hereof. Except as otherwise expressly provided herein and in the Agreement attached hereto as
Exhibits A and B
and in outstanding long term and other incentive award agreements listed on
Exhibit C,
this Agreement shall control in the event of a conflict with any other agreement or document. This Agreement may not be changed or modified, except by an agreement in writing signed by each of the Parties hereto.
|
(j)
|
Governing Law
. This Agreement will be governed by, and enforced in accordance with, the laws of the State of New Jersey without regard to the application of the principles of conflicts of laws.
|
(k)
|
Counterparts and Facsimiles
. This Agreement may be executed, including execution by facsimile signature, in multiple counterparts, each of which will be deemed an original, and all of which together will be deemed to be one and the same instrument.
|
1.
|
Terms and Conditions of Employment
.
|
4.
|
Ownership and Protection of Proprietary Information
.
|
6.
|
Remedies and Enforceability
.
|
7.
|
Contracts or Other Agreements with Former Business
.
|
8.
|
Notice
.
|
If to the Company:
|
PHH Corporation
|
9.
|
Miscellaneous
.
|
|
|
|
|
I.
|
a. The Plan must provide an objectively determinable nondiscretionary definition of expenses eligible for reimbursement or the in-kind benefits to be provided.
|
II.
|
A taxable reimbursement or in-kind benefit otherwise will be made in a manner intended to avoid the imposition of tax under Section 409A.
|
I.
|
Last Day of Employment
|
II.
|
Consideration and Acknowledgement of Certain Obligations
|
(a)
|
In connection with Executive’s termination of employment, in order to clarify the rights and obligations of the Parties to this Agreement, Executive and the Company agree that Executive shall receive termination benefits as set forth in Section 3(c)(i) of Executive’s Employment Agreement, consistent with a termination without “Cause” / resignation for “Good Reason” as defined in the Employment Agreement and vesting and settlement of all outstanding long-term and other incentive compensation awards, as set forth on
Exhibit B
of this Agreement, consistent with the terms set forth therein or as consistent with any modifications to those awards and award agreements as may be made by the Human Capital and Compensation Committee of the PHH Corporation Board of Directors.
|
(b)
|
None of the foregoing payments or benefits will be made or provided if this Agreement have not been signed by Executive, and the Release has not become irrevocable, on or before [DEADLINE DATE]. Payment and provision of the foregoing benefits are conditioned on Executive’s continued compliance with the restrictive covenants in this Agreement, and other post-employment obligations that survive Executive’s termination.
|
(c )
|
Executive acknowledges that: (A) the payments and benefits set forth in this Agreement constitute full settlement of all his rights arising out of his employment and the termination of his employment with the Company, (B) he has no entitlement under any other severance or similar arrangement maintained by the Company, and (C) except as otherwise provided specifically in this Agreement, the Company does not and will not have any other liability or obligation to Executive. Executive further acknowledges that, in the absence of his execution of this Agreement and the Release, benefits and payments specified in the “Consideration” section of the Agreement would not otherwise be due to Executive.
|
III.
|
General Release of Claims
|
(a)
|
Executive without limitation hereby irrevocably and unconditionally releases and forever discharges the Company, its subsidiaries, divisions, affiliates, related entities, officers, agents, directors, supervisors, employees, representatives, successors and assigns, and all persons acting by, through, under, or in concert with any of them (collectively, “Released Parties”) from any and all charges, complaints, claims, causes of action, demands, controversies, agreements, promises, damages and liabilities of any kind or nature whatsoever, both at law and equity, known or unknown, suspected or unsuspected, anticipated or unanticipated (hereinafter referred to as “claim” or “claims”), arising from conduct occurring on or before the effective date of this Agreement and General Release, including without limitation any claims incidental to or arising out of Employee’s employment with the Company or the termination thereof with respect to all applicable federal, state or local fair employment practices laws, 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 et seq. (“ADEA “),the New Jersey Law Against Discrimination, N.J. Stat. Ann. § 10:5-1 et seq., and the New Jersey Equal Pay Act, N.J. Stat. Ann. § 34:11-56.1 et seq., the New Jersey Family Leave Act, N.J. Stat. Ann. § 34:11B-1 et seq., the New Jersey Conscientious Employee Protection Act, N.J. Stat. Ann. § 34:19-1 et seq., the Millville Dallas Airmotive Plant Job Loss Notification Act, P.L. 2007, c.212, C.34:21-2, the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §2101
et seq
. (“WARN”), all as amended, any other alleged violation of any local, state or federal law, regulation, ordinance, public policy, and/or any contract, tort, or fraud related claim arising under common law. This provision is intended by the parties to be all encompassing and to act as a full and total release of any claim, that Executive might have or has had, that exists or ever has existed on or to the effective date of this Agreement and General Release. In this regard, Executive agrees that by signing this Agreement and General Release and by acceptance of the payment described above, Executive gives up any and all rights Executive may have to file any claim or action which Executive may now have, has ever had, or may in the future have, with respect to any matter pertaining to or arising from Executive’s employment with the Company. In this regard, Executive agrees that this Agreement and General Release covers both known and unknown claims and actions.
|
(b)
|
The parties hereby acknowledge and agree that nothing in the Agreement and General Release shall be construed as a release of Executive’s non-waivable statutory rights under applicable federal and state law or rights to seek the enforcement of the Company’s obligations under this Agreement and General Release.
|
(c)
|
Older Worker Benefit Protection Act
. As may be applicable to Executive under the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621,
et
seq
.), (“ADEA”), Executive understands and agrees that:
|
i.
|
Rights or claims under the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621,
et
seq
.) are being waived, except as provided herein.
|
ii.
|
He has had the opportunity of a full 45 days within which to consider this Agreement and release provided herein before signing it, and if he has not taken the full time period, he has done so knowingly and voluntarily, thereby expressly waiving this time period and agreeing not to assert the invalidity of this Agreement and the general release provided herein or any portion thereof on this basis.
|
iii.
|
He has carefully read and fully understands all of the provisions of this Agreement and general release provided herein and is knowingly and voluntarily agreeing to be legally bound by all of the terms set forth in this Agreement.
|
iv.
|
He is, through this Agreement and the general release provided herein, releasing the Released Parties from any and all claims he may have against the Company or such individuals.
|
v.
|
He is hereby advised in writing to consider the terms of this Agreement and the general release provided herein and consult with an attorney of his choice prior to signing this Agreement.
|
vi.
|
He has a full 7 days following the execution of this Agreement to revoke this Agreement and the general release provided herein, and has been and hereby is advised in writing that this Agreement and general release shall not become effective or enforceable until the revocation period has expired. Revocation of this Agreement and the general release provided herein must be made in writing and must be received by the Vice President, Assistant General Counsel
|
vii.
|
He understands that rights or claims under the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621,
et
seq
.) that may arise after the date this Agreement and General Release is signed are not waived.
|
(d)
|
Executive, for himself, his heirs, administrators, representatives, executors, successors and to the maximum extent permitted by law, agrees that he has not filed, nor will file, a lawsuit asserting any claims which are released by this general 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. Executive understands that nothing in this Agreement and General Release (including but not limited to the release of claims, promise not to sue, and confidentiality, cooperation, non-disparagement, and return of property provisions) (a) limits or affects his right to challenge the validity of this Release under the ADEA or the Older Worker Protection Act (“OWBPA”) or (b) prevents Executive from filing a charge or complaint with or from participating in an investigation or proceeding conducted by the Equal Employment Opportunity Commission (“EEOC”), the National Labor Relations Board (“NLRB”), the Securities and Exchange Commission (“SEC”), or any other federal, state or local agency charged with the enforcement of any laws, including providing documents or other information, or (c) prevents Executive from exercising his rights under Section 7 of the National Labor Relations Act (“NLRA”) to engage in protected, concerted activity with other Executives, although by signing this Agreement and General Release Executive is waiving his right to recover any individual relief (including backpay, frontpay, reinstatement or other legal or equitable relief) in any charge, complaint, or lawsuit or other proceeding brought by Executive or on his behalf by any third party, except for any right Executive may have to receive a payment from a government agency (and not the Company) for information provided to the government agency.
|
(e)
|
This General Release specifically excludes Executive’s indemnification as an officer and Executive of the Company or any affiliate thereof, coverage under any officers’ and directors’ liability insurance policies, and rights of defense (or the cost thereof) or indemnification under the Company’s bylaws or charter or resolution of the Company’s Board of Directors. This General Release also specifically excludes Executive’s rights to his vested Executive benefits. Nothing contained in this Release shall release Executive from his obligations, including any obligations to abide by the restrictive covenants in the Restrictive Covenant Agreement that continue or are to be performed following termination of employment.
|
(f)
|
Nothing contained in this Agreement is intended to restrict Executive’s right and responsibility to give truthful testimony under oath or precludes Executive from participating in an investigation, filing a charge, or otherwise communicating with the EEOC, the SEC, the NLRB, or other federal, state or local government agency.
|
(g)
|
The provisions of this general release of claims 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 general release shall become effective and enforceable on the eighth day following execution by Executive, provided he does not exercise his right of revocation as described above. If Executive fails to sign this Agreement or revokes his signature, this Agreement will be without force or effect.
|
(h)
|
Nothing in this Agreement prohibits Executive from reporting an event that Executive reasonably and in good faith believes is a violation of law to the relevant law-enforcement agency (such as the SEC, EEOC, NLRB or Department of Labor), or from cooperating in an investigation conducted by such a government agency. This may include disclosure of trade secret or confidential information within the limitations permitted by the 2016 Defend Trade Secrets Act (DTSA). Executive is hereby provided notice that under the DTSA, (1) no individual will be held criminally or civilly liable under Federal or State trade secret law for the disclosure of a trade secret (as defined in the Economic Espionage Act) that (A) is made in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and made solely for the purpose of reporting or investigating a suspected violation of law; or, (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal so that it is not made public; and, (2) an individual who pursues a lawsuit for retaliation by an employer for reporting a suspected violation of the law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade secret, except as permitted by court order.
|
IV.
|
Non-Disparagement
|
V.
|
Cooperation
|
(a)
|
Executive further agrees that, subject to reimbursement of reasonable expenses, he will cooperate fully with the Company and its counsel with respect to any matter (including any pending or future litigation, investigations, or governmental proceedings) which relates to matters with which Executive was involved during his employment with the Company. Executive will render such cooperation in a timely manner upon reasonable notice from the Company.
|
(b)
|
Executive further agrees that within five (5) business days after the Termination Date, Executive will update his professional profiles on any social media or other social networking sites to delete any references to his status as an officer of the Company and remove PHH Corporation as his current employer.
|
VI.
|
Return of Company Property
.
|
VII.
|
Arbitration
|
VIII.
|
Miscellaneous
|
(a)
|
No Admission of Liability
. This Agreement is not to be construed as an admission of any violation of any federal, state or local statute, ordinance or regulation or of any duty owed by the Company or any other person to Executive, or by Executive or any other person to the Company.
|
(b)
|
Absence of Reliance
. Executive acknowledges that in agreeing to this Agreement, she has not relied in any way upon representations or statements of the Company other than those representations or statements set forth in this Agreement.
|
(c)
|
No Right to Reinstatement
. Executive agrees that should he apply for reinstatement with the Company or any other member of the Company or seek in any way to be reinstated, re-employed or hired by the Company or any other member of the Company in the future, Company is under no obligation to hire Executive.
|
(d)
|
Section Headings
. The section headings are solely for convenience of reference and shall not in any way affect the interpretation of this Agreement.
|
(e)
|
409A Compliance
. With the exception of the terms of any outstanding long term incentive awards, the parties agree that the payments and benefits under Section II of this Agreement will, to the maximum extent possible, not be subject to the 6 month delay in payment described in Section 409A of the Internal Revenue Code and the Treasury Regulations thereunder (“
Section 409A
”) due to application of exemptions under Section 409A,
|
(f)
|
Notice
. Notices and all other communications provided for in this Agreement 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, to the Company at its corporate headquarters address, to the attention of the Secretary of the Company, or to Executive at the home address most recently communicated by Executive to the Company in writing.
|
(g)
|
Successors and Assigns
. This Agreement will inure to the benefit of and be binding upon the Company and Executive and their respective successors, executors, administrators and heirs. Executive may not make any assignment of this Agreement or any interest herein, by operation of law or otherwise. The Company may assign this Agreement to any successor and business by means of liquidation, dissolution, merger, consolidation, transfer of assets, or otherwise, without the written consent of Executive.
|
(h)
|
Severability
. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law. However, if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other provision, and this Agreement will be reformed, construed and enforced as though the invalid, illegal or unenforceable provision had never been herein contained.
|
(i)
|
Entire Agreement; Amendments
. Except as otherwise expressly provided herein and in the Agreement and documents attached hereto as
Exhibits A and B,
this Agreement contains the entire agreement and understanding of the Parties hereto relating to the subject matter hereof, and merges and supersedes all prior and contemporaneous discussions, agreements and understandings of every nature relating to the subject matter hereof. Except as otherwise expressly provided herein and in the Agreement and Documents attached hereto as
Exhibits A and B
and in any outstanding incentive or other compensation award agreements, this Agreement shall control in the event of a conflict with any other agreement or document. This Agreement may not be changed or modified, except by an agreement in writing signed by each of the Parties hereto.
|
(j)
|
Governing Law
. This Agreement will be governed by, and enforced in accordance with, the laws of the State of New Jersey without regard to the application of the principles of conflicts of laws.
|
(k)
|
Counterparts and Facsimiles
. This Agreement may be executed, including execution by facsimile signature, in multiple counterparts, each of which will be deemed an original, and all of which together will be deemed to be one and the same instrument.
|
1.
|
Terms and Conditions of Employment
.
|
4.
|
Ownership and Protection of Proprietary Information
.
|
6.
|
Remedies and Enforceability
.
|
7.
|
Contracts or Other Agreements with Former Business
.
|
8.
|
Notice
.
|
If to the Company:
|
PHH Corporation
|
9.
|
Miscellaneous
.
|
|
|
|
|
I.
|
a. The Plan must provide an objectively determinable nondiscretionary definition of expenses eligible for reimbursement or the in-kind benefits to be provided.
|
II.
|
A taxable reimbursement or in-kind benefit otherwise will be made in a manner intended to avoid the imposition of tax under Section 409A.
|
I.
|
Last Day of Employment
|
II.
|
Consideration and Acknowledgement of Certain Obligations
|
(a)
|
In connection with Executive’s termination of employment, in order to clarify the rights and obligations of the Parties to this Agreement, Executive and the Company agree that Executive shall receive termination benefits as set forth in Section 3(c)(i) of Executive’s Employment Agreement, consistent with a termination without “Cause” / resignation for “Good Reason” as defined in the Employment Agreement and vesting and settlement of all outstanding long-term and other incentive compensation awards, as set forth on
Exhibit B
of this Agreement, consistent with the terms set forth therein or as consistent with any modifications to those awards and award agreements as may be made by the Human Capital and Compensation Committee of the PHH Corporation Board of Directors.
|
(b)
|
None of the foregoing payments or benefits will be made or provided if this Agreement have not been signed by Executive, and the Release has not become irrevocable, on or before [DEADLINE DATE]. Payment and provision of the foregoing benefits are conditioned on Executive’s continued compliance with the restrictive covenants in this Agreement, and other post-employment obligations that survive Executive’s termination.
|
(c )
|
Executive acknowledges that: (A) the payments and benefits set forth in this Agreement constitute full settlement of all his rights arising out of his employment and the termination of his employment with the Company, (B) he has no entitlement under any other severance or similar arrangement maintained by the Company, and (C) except as otherwise provided specifically in this Agreement, the Company does not and will not have any other liability or obligation to Executive. Executive further acknowledges that, in the absence of his execution of this Agreement and the Release, benefits and payments specified in the “Consideration” section of the Agreement would not otherwise be due to Executive.
|
III.
|
General Release of Claims
|
(a)
|
Executive without limitation hereby irrevocably and unconditionally releases and forever discharges the Company, its subsidiaries, divisions, affiliates, related entities, officers, agents, directors, supervisors, employees, representatives, successors and assigns, and all persons acting by, through, under, or in concert with any of them (collectively, “Released Parties”) from any and all charges, complaints, claims, causes of action, demands, controversies, agreements, promises, damages and liabilities of any kind or nature whatsoever, both at law and equity, known or unknown, suspected or unsuspected, anticipated or unanticipated (hereinafter referred to as “claim” or “claims”), arising from conduct occurring on or before the effective date of this Agreement and General Release, including without limitation any claims incidental to or arising out of Employee’s employment with the Company or the termination thereof with respect to all applicable federal, state or local fair employment practices laws, 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 et seq. (“ADEA “),the New Jersey Law Against Discrimination, N.J. Stat. Ann. § 10:5-1 et seq., and the New Jersey Equal Pay Act, N.J. Stat. Ann. § 34:11-56.1 et seq., the New Jersey Family Leave Act, N.J. Stat. Ann. § 34:11B-1 et seq., the New Jersey Conscientious Employee Protection Act, N.J. Stat. Ann. § 34:19-1 et seq., the Millville Dallas Airmotive Plant Job Loss Notification Act, P.L. 2007, c.212, C.34:21-2, the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §2101
et seq
. (“WARN”), all as amended, any other alleged violation of any local, state or federal law, regulation, ordinance, public policy, and/or any contract, tort, or fraud related claim arising under common law. This provision is intended by the parties to be all encompassing and to act as a full and total release of any claim, that Executive might have or has had, that exists or ever has existed on or to the effective date of this Agreement and General Release. In this regard, Executive agrees that by signing this Agreement and General Release and by acceptance of the payment described above, Executive gives up any and all rights Executive may have to file any claim or action which Executive may now have, has ever had, or may in the future have, with respect to any matter pertaining to or arising from Executive’s employment with the Company. In this regard, Executive agrees that this Agreement and General Release covers both known and unknown claims and actions.
|
(b)
|
The parties hereby acknowledge and agree that nothing in the Agreement and General Release shall be construed as a release of Executive’s non-waivable statutory rights under applicable federal and state law or rights to seek the enforcement of the Company’s obligations under this Agreement and General Release.
|
(c)
|
Older Worker Benefit Protection Act
. As may be applicable to Executive under the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621,
et
seq
.), (“ADEA”), Executive understands and agrees that:
|
i.
|
Rights or claims under the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621,
et
seq
.) are being waived, except as provided herein.
|
ii.
|
He has had the opportunity of a full 45 days within which to consider this Agreement and release provided herein before signing it, and if he has not taken the full time period, he has done so knowingly and voluntarily, thereby expressly waiving this time period and agreeing not to assert the invalidity of this Agreement and the general release provided herein or any portion thereof on this basis.
|
iii.
|
He has carefully read and fully understands all of the provisions of this Agreement and general release provided herein and is knowingly and voluntarily agreeing to be legally bound by all of the terms set forth in this Agreement.
|
iv.
|
He is, through this Agreement and the general release provided herein, releasing the Released Parties from any and all claims he may have against the Company or such individuals.
|
v.
|
He is hereby advised in writing to consider the terms of this Agreement and the general release provided herein and consult with an attorney of his choice prior to signing this Agreement.
|
vi.
|
He has a full 7 days following the execution of this Agreement to revoke this Agreement and the general release provided herein, and has been and hereby is advised in writing that this Agreement and general release shall not become effective or enforceable until the revocation period has expired. Revocation of this Agreement and the general release provided herein must be made in writing and must be received by the Vice President, Assistant General Counsel
|
vii.
|
He understands that rights or claims under the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621,
et
seq
.) that may arise after the date this Agreement and General Release is signed are not waived.
|
(d)
|
Executive, for himself, his heirs, administrators, representatives, executors, successors and to the maximum extent permitted by law, agrees that he has not filed, nor will file, a lawsuit asserting any claims which are released by this general 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. Executive understands that nothing in this Agreement and General Release (including but not limited to the release of claims, promise not to sue, and confidentiality, cooperation, non-disparagement, and return of property provisions) (a) limits or affects his right to challenge the validity of this Release under the ADEA or the Older Worker Protection Act (“OWBPA”) or (b) prevents Executive from filing a charge or complaint with or from participating in an investigation or proceeding conducted by the Equal Employment Opportunity Commission (“EEOC”), the National Labor Relations Board (“NLRB”), the Securities and Exchange Commission (“SEC”), or any other federal, state or local agency charged with the enforcement of any laws, including providing documents or other information, or (c) prevents Executive from exercising his rights under Section 7 of the National Labor Relations Act (“NLRA”) to engage in protected, concerted activity with other Executives, although by signing this Agreement and General Release Executive is waiving his right to recover any individual relief (including backpay, frontpay, reinstatement or other legal or equitable relief) in any charge, complaint, or lawsuit or other proceeding brought by Executive or on his behalf by any third party, except for any right Executive may have to receive a payment from a government agency (and not the Company) for information provided to the government agency.
|
(e)
|
This General Release specifically excludes Executive’s indemnification as an officer and Executive of the Company or any affiliate thereof, coverage under any officers’ and directors’ liability insurance policies, and rights of defense (or the cost thereof) or indemnification under the Company’s bylaws or charter or resolution of the Company’s Board of Directors. This General Release also specifically excludes Executive’s rights to his vested Executive benefits. Nothing contained in this Release shall release Executive from his obligations, including any obligations to abide by the restrictive covenants in the Restrictive Covenant Agreement that continue or are to be performed following termination of employment.
|
(f)
|
Nothing contained in this Agreement is intended to restrict Executive’s right and responsibility to give truthful testimony under oath or precludes Executive from participating in an investigation, filing a charge, or otherwise communicating with the EEOC, the SEC, the NLRB, or other federal, state or local government agency.
|
(g)
|
The provisions of this general release of claims 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 general release shall become effective and enforceable on the eighth day following execution by Executive, provided he does not exercise his right of revocation as described above. If Executive fails to sign this Agreement or revokes his signature, this Agreement will be without force or effect.
|
(h)
|
Nothing in this Agreement prohibits Executive from reporting an event that Executive reasonably and in good faith believes is a violation of law to the relevant law-enforcement agency (such as the SEC, EEOC, NLRB or Department of Labor), or from cooperating in an investigation conducted by such a government agency. This may include disclosure of trade secret or confidential information within the limitations permitted by the 2016 Defend Trade Secrets Act (DTSA). Executive is hereby provided notice that under the DTSA, (1) no individual will be held criminally or civilly liable under Federal or State trade secret law for the disclosure of a trade secret (as defined in the Economic Espionage Act) that (A) is made in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and made solely for the purpose of reporting or investigating a suspected violation of law; or, (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal so that it is not made public; and, (2) an individual who pursues a lawsuit for retaliation by an employer for reporting a suspected violation of the law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade secret, except as permitted by court order.
|
IV.
|
Non-Disparagement
|
V.
|
Cooperation
|
(a)
|
Executive further agrees that, subject to reimbursement of reasonable expenses, he will cooperate fully with the Company and its counsel with respect to any matter (including any pending or future litigation, investigations, or governmental proceedings) which relates to matters with which Executive was involved during his employment with the Company. Executive will render such cooperation in a timely manner upon reasonable notice from the Company.
|
(b)
|
Executive further agrees that within five (5) business days after the Termination Date, Executive will update his professional profiles on any social media or other social networking sites to delete any references to his status as an officer of the Company and remove PHH Corporation as his current employer.
|
VI.
|
Return of Company Property
.
|
VII.
|
Arbitration
|
VIII.
|
Miscellaneous
|
(a)
|
No Admission of Liability
. This Agreement is not to be construed as an admission of any violation of any federal, state or local statute, ordinance or regulation or of any duty owed by the Company or any other person to Executive, or by Executive or any other person to the Company.
|
(b)
|
Absence of Reliance
. Executive acknowledges that in agreeing to this Agreement, she has not relied in any way upon representations or statements of the Company other than those representations or statements set forth in this Agreement.
|
(c)
|
No Right to Reinstatement
. Executive agrees that should he apply for reinstatement with the Company or any other member of the Company or seek in any way to be reinstated, re-employed or hired by the Company or any other member of the Company in the future, Company is under no obligation to hire Executive.
|
(d)
|
Section Headings
. The section headings are solely for convenience of reference and shall not in any way affect the interpretation of this Agreement.
|
(e)
|
409A Compliance
. With the exception of the terms of any outstanding long term incentive awards, the parties agree that the payments and benefits under Section II of this Agreement will, to the maximum extent possible, not be subject to the 6 month delay in payment described in Section 409A of the Internal Revenue Code and the Treasury Regulations thereunder (“
Section 409A
”) due to application of exemptions under Section 409A,
|
(f)
|
Notice
. Notices and all other communications provided for in this Agreement 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, to the Company at its corporate headquarters address, to the attention of the Secretary of the Company, or to Executive at the home address most recently communicated by Executive to the Company in writing.
|
(g)
|
Successors and Assigns
. This Agreement will inure to the benefit of and be binding upon the Company and Executive and their respective successors, executors, administrators and heirs. Executive may not make any assignment of this Agreement or any interest herein, by operation of law or otherwise. The Company may assign this Agreement to any successor and business by means of liquidation, dissolution, merger, consolidation, transfer of assets, or otherwise, without the written consent of Executive.
|
(h)
|
Severability
. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law. However, if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other provision, and this Agreement will be reformed, construed and enforced as though the invalid, illegal or unenforceable provision had never been herein contained.
|
(i)
|
Entire Agreement; Amendments
. Except as otherwise expressly provided herein and in the Agreement and documents attached hereto as
Exhibits A and B,
this Agreement contains the entire agreement and understanding of the Parties hereto relating to the subject matter hereof, and merges and supersedes all prior and contemporaneous discussions, agreements and understandings of every nature relating to the subject matter hereof. Except as otherwise expressly provided herein and in the Agreement and Documents attached hereto as
Exhibits A and B
and in any outstanding incentive or other compensation award agreements, this Agreement shall control in the event of a conflict with any other agreement or document. This Agreement may not be changed or modified, except by an agreement in writing signed by each of the Parties hereto.
|
(j)
|
Governing Law
. This Agreement will be governed by, and enforced in accordance with, the laws of the State of New Jersey without regard to the application of the principles of conflicts of laws.
|
(k)
|
Counterparts and Facsimiles
. This Agreement may be executed, including execution by facsimile signature, in multiple counterparts, each of which will be deemed an original, and all of which together will be deemed to be one and the same instrument.
|
A.
|
Grant Date
: ______________, 2017.
|
B.
|
Plan Under Which Granted
: PHH Corporation 2014 Equity and Incentive Plan (the “
Plan
”).
|
C.
|
Performance Based Cash
: The target amount of Performance Based Cash subject to the Award shall be __________________ Dollars ($_____) (“
Target Cash
”), with a maximum amount of Performance Based Cash equal to 150% of the Target Cash available under this Award, subject to the terms hereof.
|
D.
|
Vesting Schedule
: The Performance Based Cash shall vest, if at all, in accordance with
Schedule 1
attached hereto. Performance Based Cash that becomes vested in accordance with
Schedule 1
is “
Vested Cash
.”
|
E.
|
Payment of Vested Cash
: Subject to the attached Terms and Conditions, cash payments of the applicable Vested Cash are to be made on a date selected by the Company that is no later than sixty (60) days following the date specified in
Schedule 1
(each a “
Distribution Date
”).
|
Performance Criteria
|
Weight
|
Performance Levels ($ in Millions)
|
|||
|
|
|
Threshold
|
Target
|
Maximum
|
Excess Cash Available for Distribution by 12/31/17
|
100%
|
Performance =>
|
$[ * * *]
|
$[ * * *]
|
$[ * * *]
|
% Vesting
|
75%
|
100%
|
150%
|
II.
|
Notwithstanding Part I, subject to the other terms of this Award, upon (A) the Participant’s Separation from Service due to a termination of employment by the Company and its Affiliates without Cause
prior to the last day of the Employment Period or (B) the Participant’s death or Disability during the Participant’s service with the Company and its Affiliates, the Participant will remain entitled to receive the full amount of the Performance Based Cash that becomes Vested Cash based on achievement of the Performance Criteria for the Employment Period. Such Vested Cash will be paid on the Distribution Date following the last day of the Employment Period.
|
III.
|
Except as otherwise provided in this Vesting Schedule, any Performance Based Cash shall be forfeited at the time the Participant’s service with the Company and its Affiliates ceases, regardless of the reason and there shall be no proration for partial service.
|
IV.
|
Notwithstanding anything in this Award to the contrary, if the Participant has not signed a restrictive covenant agreement in a form acceptable to the Company by no later than thirty (30) days after the Grant Date, the Award shall be forfeited. Furthermore, if the Company determines that the Participant has violated the restrictive covenant agreement, any portion of the Award which has not been paid will be forfeited.
|
A.
|
Plan Year
(to which the Award relates) means: January 1, 2017 through December 31, 2017.
|
B.
|
Target Amount, Targets, and Performance Criteria
: In calculating the final amount available for payment under this Award for 2017, the Committee will take into account the results achieved by the Company and its Affiliates against the performance criteria as described in
Appendix A
(the “Performance Criteria”). The Grantee’s individual 2017 MIP goal of $
________
(the “Target Amount”) will be adjusted based on performance against the Performance Criteria for the Plan Year as approved by the Committee in the manner which is shown in
Appendix A
. The Grantee’s final MIP award, if any, is subject to Company and individual performance as well as Committee discretion.
|
C.
|
Impact of Performance on MIP
: Subject to the MIP, the 2014 EIP, and the other terms of this Award, the Committee will assess the level of attainment of the Plan Year Performance Criteria set forth in
Appendix A
based on the Threshold, Target, and Maximum goals provided on
Appendix A
, as certified by the Committee.
|
D.
|
Vesting and Payment
: Unless contrary to applicable law and except as provided in this Paragraph D or the MIP, the Grantee will only become vested in the Award if the Grantee is employed by the Company or an Affiliate on the date the Committee (or its designee) certifies the level of achievement of all the Plan Year Performance Criteria. Except as provided in in this Paragraph D or the MIP, if the Committee (or its designee) does not certify the level of achievement of all the Plan Year Performance Criteria, or if the Grantee is not an employee of the Company or an Affiliate on the date, if any, that such certification occurs, no amount will be payable pursuant to this Award. If Grantee is terminated without Cause, the Grantee will be entitled to a pro-rata portion of the final Award based on the number of days worked by the Grantee in the Plan Year over the total number of days in the Plan Year with performance against the Performance Criteria (other than MBOs) determined by the Committee for the entire Plan Year and with MBO performance determined through the date of termination. The Change in Control provisions of the MIP, including, without limitation, Section 5.5 thereof, do not apply. Any vested Award amount will be paid within thirty (30) days following certification by the Committee (or its designee) of all the Plan Year Performance Criteria, but no later than March 15 of the year immediately following the Plan Year.
|
E.
|
Committee Discretion
: The Committee (or its designee) may exercise discretion to reduce or increase the amount payable under this Award prior to payment of the Award. Such discretion may be exercised based on the factors the Committee (or its designee) deems necessary or appropriate in its sole and absolute discretion.
|
F.
|
Code Section 162(m) Condition
. Notwithstanding anything in this Award to the contrary, if the Grantee is a Covered Employee, no amount will be payable under this Award unless the Company achieves the applicable Performance Goal established by the Committee for the MIP for 2017 of tangible book value of $[* * *] per share, excluding impact of shareholder distributions, and no payment under this Award shall exceed the maximum amount that the Committee establishes for achievement of such Performance Goal with respect to the Grantee or any applicable limit set forth in the 2014 EIP or the MIP.
|
A.
|
Grant Date
: ______________, 2016.
|
B.
|
Plan Under Which Granted
: PHH Corporation 2014 Equity and Incentive Plan (the “
Plan
”).
|
C.
|
Performance Restricted Stock Units
: The target number of Performance Restricted Stock Units subject to the Award shall be __________________ (_____) (“
Target Stock Units
”), with a maximum amount of Performance Restricted Stock Units equal to 150% of the Target Stock Units available under this Award, subject to the terms hereof. Each Performance Restricted Stock Unit represents the Company’s unfunded and unsecured obligation to issue one share of the Company’s common stock (“
Stock
”) in accordance with this Award, subject to the terms of this Award and the Plan.
|
D.
|
Dividend Equivalents
: Each Performance Restricted Stock Unit shall accrue Dividend Equivalents equal to the dividends per share paid on one share of Stock to a shareholder of record on or after the Grant Date. Dividend Equivalents will vest and be settled as provided in
Schedule 1
attached hereto.
|
E.
|
Vesting Schedule
: The Performance Restricted Stock Units shall vest, if at all, in accordance with
Schedule 1
attached hereto. Performance Restricted Stock Units that become vested in accordance with
Schedule 1
are “
Vested Stock Units
.”
|
F.
|
Settlement of Vested Stock Units
: Subject to the attached Terms and Conditions, shares of Stock or cash, as applicable, attributable to the applicable Vested Stock Units are to be settled on a date selected by the Company that is no later than sixty (60) days following the date specified in
Schedule 1
(each a “
Distribution Date
”)
|
II.
|
Notwithstanding Part I:
|
(A)
|
Upon the Participant’s Separation from Service due to a termination of employment by the Company and its Affiliates without Cause
prior to the last day of the Vesting Period, the Participant will remain entitled to receive the full number of Performance Restricted Stock Units that become Vested Stock Units based on the Achieved Percentage based on TSR calculated as of the last day of the Measurement Period with such Vested Stock Units settled as soon as practicable following the end of the Vesting Period. Notwithstanding the foregoing, in the event the Participant violates any non-competition, non-solicitation, non-disclosure, or other restrictive covenant agreement with the Company or its Affiliates prior to the Distribution Date, then the Participant shall not be vested in any portion of the Performance Restricted Stock Units under this Award and the entire Award will be forfeited.
|
(B)
|
Notwithstanding (A), above, subject to the other terms of this Award, upon the Participant’s death or Disability during the Participant’s service with the Company and its Affiliates and prior to the end of the Vesting Period, the Performance Restricted Stock Units will become Vested Stock Units and will be settled as soon as practicable following the date of the Participant’s death or Disability. For purposes of determining the number of Vested Stock Units under this Part II(B), the Achieved Percentage for the Measurement Period shall be the percentage based on actual performance through the date of the Participant’s death or Disability (or the end of the Measurement Period, if earlier).
|
III.
|
Unless the Participant has experienced a Separation from Service in accordance with II(A), the Participant must be employed by the Company or an Affiliate and must not have incurred a Separation from Service on the date an applicable dividend is paid to be entitled to Dividend Equivalents in respect of that dividend. Dividend Equivalents accrued with respect to a Performance Restricted Stock Unit will be paid to the Participant on the Distribution Date for such Performance Restricted Stock Unit.
|
IV.
|
Except as otherwise provided in this Vesting Schedule, any Performance Restricted Stock Units, and all Dividend Equivalents with respect to such Performance Restricted Stock Units, shall be forfeited at the time the Participant’s service with the Company and its Affiliates ceases, regardless of the reason and there shall be no proration for partial service.
|
V.
|
Notwithstanding anything in this Award to the contrary, if the Participant has not signed a restrictive covenant agreement in a form acceptable to the Company by no later than thirty (30) days after the Grant Date, the Award shall be forfeited. Furthermore, if the Company determines that the Participant has violated the restrictive covenant agreement, any portion of the Award which has not been settled or paid will be forfeited.
|
A.
|
Grant Date
: ______________, 2016.
|
B.
|
Plan Under Which Granted
: PHH Corporation 2014 Equity and Incentive Plan (the “
Plan
”).
|
C.
|
Performance Restricted Stock Units
: The target number of Performance Restricted Stock Units subject to the Award shall be __________________ (_____) (“
Target Stock Units
”), with a maximum amount of Performance Restricted Stock Units equal to 200% of the Target Stock Units available under this Award, subject to the terms hereof. Each Performance Restricted Stock Unit represents the Company’s unfunded and unsecured obligation to issue one share of the Company’s common stock (“
Stock
”) in accordance with this Award, subject to the terms of this Award and the Plan.
|
D.
|
Dividend Equivalents
: Each Performance Restricted Stock Unit shall accrue Dividend Equivalents equal to the dividends per share paid on one share of Stock to a shareholder of record on or after the Grant Date. Dividend Equivalents will vest and be settled as provided in
Schedule 1
attached hereto.
|
E.
|
Vesting Schedule
: The Performance Restricted Stock Units shall vest, if at all, in accordance with
Schedule 1
attached hereto. Performance Restricted Stock Units that become vested in accordance with
Schedule 1
are “
Vested Stock Units
.”
|
F.
|
Settlement of Vested Stock Units
: Subject to the attached Terms and Conditions, shares of Stock or cash, as applicable, attributable to the applicable Vested Stock Units are to be settled on a date selected by the Company that is no later than sixty (60) days following the date specified in
Schedule 1
(each a “
Distribution Date
”)
|
II.
|
Notwithstanding Part I:
|
(A)
|
Upon the Participant’s Separation from Service due to a termination of employment by the Company and its Affiliates without Cause
prior to the last day of the Vesting Period, the Participant will remain entitled to receive the full number of Performance Restricted Stock Units that become Vested Stock Units based on the Achieved Percentage based on TSR calculated as of the last day of the Measurement Period with such Vested Stock Units settled as soon as practicable following the end of the Vesting Period. Notwithstanding the foregoing, in the event the Participant violates any non-competition, non-solicitation, non-disclosure, or other restrictive covenant agreement with the Company or its Affiliates prior to the Distribution Date, then the Participant shall not be vested in any portion of the Performance Restricted Stock Units under this Award and the entire Award will be forfeited.
|
(B)
|
Notwithstanding (A), above, subject to the other terms of this Award, upon the Participant’s death or Disability during the Participant’s service with the Company and its Affiliates and prior to the end of the Vesting Period, the Performance Restricted Stock Units will become Vested Stock Units and will be settled as soon as practicable following the date of the Participant’s death or Disability. For purposes of determining the number of Vested Stock Units under this Part II(B), the Achieved Percentage for the Measurement Period shall be the percentage based on actual performance through the date of the Participant’s death or Disability (or the end of the Measurement Period, if earlier).
|
III.
|
Unless the Participant has experienced a Separation from Service in accordance with II(A), the Participant must be employed by the Company or an Affiliate and must not have incurred a Separation from Service on the date an applicable dividend is paid to be entitled to Dividend Equivalents in respect of that dividend. Dividend Equivalents accrued with respect to a Performance Restricted Stock Unit will be paid to the Participant on the Distribution Date for such Performance Restricted Stock Unit.
|
IV.
|
Except as otherwise provided in this Vesting Schedule, any Performance Restricted Stock Units, and all Dividend Equivalents with respect to such Performance Restricted Stock Units, shall be forfeited at the time the Participant’s service with the Company and its Affiliates ceases, regardless of the reason and there shall be no proration for partial service.
|
V.
|
Notwithstanding anything in this Award to the contrary, if the Participant has not signed a restrictive covenant agreement in a form acceptable to the Company by no later than thirty (30) days after the Grant Date, the Award shall be forfeited. Furthermore, if the Company determines that the Participant has violated the restrictive covenant agreement, any portion of the Award which has not been settled or paid will be forfeited.
|
|
By:
|
/s/ Glen A. Messina
|
|
|
Glen A. Messina
|
|
|
President and Chief Executive Officer
|
|
By:
|
/s/ Michael R. Bogansky
|
|
|
Michael R. Bogansky
|
|
|
Senior Vice President and Chief Financial Officer
|
|
By:
|
/s/ Glen A. Messina
|
|
|
Glen A. Messina
|
|
|
President and Chief Executive Officer
|
|
By:
|
/s/ Michael R. Bogansky
|
|
|
Michael R. Bogansky
|
|
|
Senior Vice President and Chief Financial Officer
|