SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Form 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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May 14, 1997 (April 30, 1997)
(Date of Report (date of earliest event reported))
PHH Corporation
(Exact name of Registrant as specified in its charter)
Maryland 1-7797 52-0551284
(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation or organization) Identification Number)
11333 McCormick Road
Hunt Valley, Maryland 21031
(Address of principal executive office) (Zip Code)
(410) 771-3600
(Registrant's telephone number, including area code)
Former Fiscal Year End: April 30
(Former name, former address and former fiscal year, if applicable)
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Item 1. Changes in Control of Registrant
Pursuant to a merger agreement (the "Merger Agreement") by and among PHH
Corporation (the "Corporation"), HFS Incorporated ("HFS") and Mercury Acq. Corp.
("Mercury"), a wholly owned subsidiary of HFS, effective April 30, 1997, Mercury
was merged into the Corporation, with the Corporation being the surviving
corporation, and the Corporation became a wholly owned subsidiary of HFS (the
"Merger"). The Merger was completed upon receiving stockholder approval from the
respective stockholders of the Corporation and HFS at meetings of stockholders
held on April 30, 1997. In connection with the Merger, all outstanding shares of
the Corporation's common stock, including shares issued to holders of the
Corporation's employee stock options, were exchanged for approximately 30.3
million shares of HFS common stock, valued at approximately $1.8 billion.
Pursuant to the Merger Agreement, the number of HFS shares issued to complete
the Merger was determined by multiplying the outstanding shares of the
Corporation as of April 30, 1997 by the conversion number of .825, calculated in
accordance with the terms of the Merger Agreement plus, .7 million shares of HFS
common stock issued in exchange for outstanding options to purchase shares of
the Corporation's common stock. The 30.3 million shares of HFS common stock
issued to shareholders and option holders of the Corporation represent 19.2% of
the total outstanding shares of HFS.
In connection with the Merger, the HFS Board of Directors elected Robert D.
Kunisch, Chairman and CEO of the Corporation, as a member of the HFS Board of
Directors. In addition, Mr. Kunisch was named a Vice Chairman of HFS.
Pursuant to the Merger Agreement, all of the directors of the Corporation
resigned on April 30, 1997. In addition, James E. Buckman, senior executive vice
president and general counsel of HFS and Stephen P. Holmes, vice chairman of HFS
who were both the directors of Mercury, became the members of the Board of
Directors of the Corporation in accordance with the Merger Agreement.
The description contained herein of the Merger Agreement is qualified in its
entirety by reference to the Agreement and Plan of Merger dated as of November
10, 1996, by and among the Corporation, Mercury and HFS, a copy of which is
attached as Exhibit 2 to a Current Report on Form 8-K previously filed by the
Corporation with the Securities and Exchange Commission on November 14, 1996.
Item 4. Changes in Registrant's Certifying Accountant
a) The Board of Directors of the Corporation engaged the accounting firm of
Deloitte and Touche LLP, as independent accountants for the Corporation,
effective as of May 12, 1997 and accordingly dismissed KPMG Peat Marwick
LLP in such capacity effective with the completion of their report on the
financial statements of PHH Corporation to be included in the
Corporation's transition report on Form 10-K for the period ended
December 31, 1996.
b) During the two most recent fiscal years ended April 30, 1996 and 1995,
and the subsequent interim period through May 12, 1997, there have
been no disagreements with KPMG Peat Marwick LLP on any matter of
accounting principles or practices, financial statement disclosure or
auditing scope or procedure or any reportable events.
c) The report of KPMG Peat Marwick LLP on the financial statements for the
past two years contained no adverse opinion or disclaimer of opinion and
was not qualified or modified as to uncertainty, audit scope or accounting
principles.
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d) As the Corporation has no Audit Committee, the Board of Directors approved
the dismissal of KPMG Peat Marwick LLP and the engagement of Deloitte &
Touche, LLP.
e) The Corporation has requested that KPMG Peat Marwick LLP furnish it with a
letter addressed to the United States Securities and Exchange Commission
(the "SEC") stating whether it agrees with the above statements. A copy of
the KPMG Peat Marwick LLP letter to the SEC, dated May 14, 1997 is filed
as Exhibit 16 to this Current Report on Form 8-K.
Item 7. Financial Statements and Exhibits
c) Exhibits
Exhibit
No. Description
16 Letter from KPMG Peat Marwick LLP to the SEC dated May 14, 1997.
Item 8. Change in Fiscal Year
On April 30, 1997, the Corporation's fiscal year was changed from a year ending
on April 30, to a year ending December 31. As a result, the Corporation will
file a Form 10-K for the transition period from May 1, 1996 to December 31,
1996. The Corporation's next full year will be for the period January 1, 1997 to
December 31, 1997. The Corporation will also file a Form 10-Q for the quarter
ending March 31, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Corporation has duly caused this report to be on its behalf by the undersigned
hereto duly authorized.
PHH CORPORATION
By: /s/: James E. Buckman
James E. Buckman
Executive Vice President
Date: May 14, 1997
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PHH INCORPORATED
CURRENT REPORT ON FORM 8-K
Report Dated May 14, 1997 (April 30, 1997)
EXHIBIT INDEX
Exhibit No. Description Page No.
16 Letter from KPMG Peat Marwick LLP to the Securities and Exchange
Commission dated May 14, 1997.
EXHIBIT 16
May 14, 1997
Securities and Exchange Commission
Washington, DC 20549
Ladies and Gentlemen:
We were previously principal accountants for PHH Corporation and, under the
date of May 17, 1996, except for the note on capital stock as to which the date
is June 24, 1996, we reported on the consolidated financial statements of PHH
Corporation and subsidiaries as of and for the year ended April 30, 1996 and
1995. On May 12, 1997, our appointment as principal accountants was terminated
effective upon the completion of our report on the financial statements of PHH
Corporation to be included in its transition report on Form 10-K for the period
ended December 31, 1996. We have read PHH Corporation's statements included
under Item 4 of its Form 8-K dated May 14, 1997, and we agree with such
statements.
Very truly yours,
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
