AMENDMENT NO. 1 TO THE

                      PHH CORPORATION EXCESS BENEFIT PLAN

         This Amendment No. 1 to the PHH  Corporation  Excess  Benefit Plan,  as
amended  and  restated  effective  May  1,  1994  (the  "Plan"),   made  by  PHH
Corporation, a Maryland corporation (the "Corporation"),

                              W I T N E S S E T H:


         WHEREAS,  the Corporation wishes to amend the Plan to clarify that Plan
participants  entitled to  deferred or early  deferred  pension  benefits  under
Article VI of the PHH  Corporation  Pension Plan are entitled to benefits  under
the Plan, and to make certain other clarifying changes;


         NOW,  THEREFORE,  the Plan is amended,  effective February 26, 1996, as
follows:

         1.       Section 3.1 is amended to read as follows (revised language is
underlined):

                  3.1 ELIGIBILITY OF BENEFITS DURING LIFE. An Eligible  Employee
         who retires under the Early  Retirement,  Normal Retirement or Deferred
         Retirement  provision of the Basic Plan, or who  terminates  employment
         and is  entitled  to  receive a  deferred  pension  benefit or an early
         deferred  pension  benefit  pursuant  to Article VI of the Basic  Plan,
         shall be entitled  to receive  compensation  under this Plan,  from the
         Company,  equal to the  difference  between the benefit  payable to the
         Eligible Employee under the Basic Plan and the benefit which would have
         been  payable  to the  Eligible  Employee  under the Basic  Plan if the
         dollar and percentage  limits on benefits imposed by section  415(b)(1)
         of the Code did not apply, and if the limit on compensation  imposed by
         section  401(a)(17) of the Code were increased to one hundred sixty six
         and two-thirds  percent (166 2/3%) of the actual  401(a)(17)  limit. If
         benefits  payable  to an  Eligible  Employee  under the Basic  Plan are
         increased after the Eligible Employee's participation in the Basic Plan
         terminates, whether due to cost of living increases in the said section
         415(b)(1)  or  401(a)(17)  limits  or  otherwise,   then  the  Eligible
         Employee's benefits under this Plan shall be decreased accordingly.


         2.       The  first  sentence  of  Section  6.4 is  amended  to read as
follows (revised language is underlined):

         The Board may amend the Plan from time to time in any respect,  and may
         at any time  terminate the Plan in its entirety or as it applies to any
         Employer;  provided,  however,  that, except as provided in Section 3.1
         and Section 4.1, an Eligible Employee's  entitlement to benefits earned
         under this Plan as of the date of amendment or  termination  may not be
         terminated or reduced.





         3.       The  first  paragraph  of  Section  6.8 is  amended to read as
follows (revised language is underlined):

                  6.8  FORFEITURE OF RIGHT TO FUTURE  BENEFITS.  Notwithstanding
         any  other  provision  of this  Plan,  an  Eligible  Employee  (or such
         Eligible Employee's surviving spouse or other beneficiary) will forfeit
         all rights with respect to Plan  benefits on account of which  payments
         remain to be made and will be  immediately  obligated  to return to the
         Company the amount of any Plan benefits  previously  distributed to the
         Eligible Employee and the Eligible Employee's surviving spouse or other
         beneficiary if (a) such Eligible Employee, within a period of two years
         from the date his or her employment with the Employer or its affiliates
         terminates,  directly or indirectly,  either  individually or as owner,
         partner,  agent,  employee,  consultant  or  otherwise,  except for the
         account  of and  on  behalf  of the  Employer  or an  affiliate  of the
         Employer,  engages in any activity competitive with the business of the
         Employer or an affiliate of the Employer,  or in  competition  with the
         Employer or one of its  affiliates,  solicits or otherwise  attempts to
         establish  for  himself  or herself  or for any other  person,  firm or
         entity, any business relationships with any person, firm or corporation
         which was, at the time the Eligible Employee's employment terminates or
         within one year prior thereto, a customer of the Employer or one of its
         affiliates  or (b) an  Eligible  Employee's  employment  is  terminated
         because of willful misconduct or gross negligence in the performance of
         his or her duties,  as determined  by the  Employer,  and the Committee
         determines in its sole and absolute discretion that Plan benefits shall
         be forfeited.


         IN WITNESS WHEREOF,  the Corporation has caused this Amendment No. 1 to
be executed by its duly authorized  officer,  effective as of the date specified
above.

WITNESS:                                    PHH CORPORATION


                                    By:     /s/ Robert D. Kunisch
______________________________         _________________________________
                                            Robert D. Kunisch
Print Name:_____________________            Chief Executive Officer
                                            and President

Date:__________________________     Date:_______________________________