EX-10.38: RESOLUTION OF COMPENSATION COMMITTEE

 

 

 

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

PHH ARVAL
Incentive Plan Guidelines

Effective January 1, 2005

The information contained in this document is proprietary. Sharing this information with anyone who is not an employee of PHH Arval violates the PHH Code of Ethics.
This document provides general guidelines for participants in:

Senior Leadership Results Plan (“SLRP”)
Leadership Results Plan (“LRP”)
Business Development incentive plans
Customer & Vehicle Services incentive plans
Vehicle Accident Services incentive plans
Any other plans not excluded below.

It is not applicable to Share the Results Plan participants, OOS Associates or Consultants, UVS Associates or Supervisors, Subrogation Sr. Claims Negotiators or Claims Negotiators.

Introduction

PHH Vehicle Management Services, LLC, doing business as PHH Arval, (hereafter “PHH”) provides a Leadership Results Plan that enhances company unity as it gives participants the opportunity to earn incentive compensation contingent on:

•		Achievement of the FY 2005 strategic plan, growth strategy and financial objectives.
•		Successful achievement of key initiatives as identified by senior leadership.

Plan Period

The “Plan Year” corresponds to the fiscal year of January 1, 2005 to December 31, 2005.

Plan Participation

Participation is limited to regular employees whose positions and responsibilities significantly impact financial performance and the achievement of strategic business initiatives. Eligible participants are identified at the beginning of the Plan Year, or at the time of promotion, transfer, or new hire to an eligible position. Participants who are hired or transferred during the Plan Year are eligible for a prorated award, provided they participate for more than three months. Individuals hired or transferred to eligible positions between October 1 and December 31 are not eligible to participate. Participants who experience a job change during the year that impacts their level of participation will have their incentive calculation prorated. Participation in any given year does not ensure participation in subsequent years. An equity review of participation occurs each year and is approved by the Senior Leadership Team.

      

      

Payout Targets

The payout target is expressed as a percentage of Plan Year earnings. A participant’s payout target is determined based on three criteria: total compensation as determined by the competitive marketplace, the appropriate mix of base pay and the “at risk” component of incentive pay, and internal equity. The payout target is fixed at the level of company, financial and other performance that constitutes 100% achievement; the actual payout percentage, and the percentage of earnings it represents, will be dependent on the actual company results achieved.

Plan Design

Plan elements and their weighting are reviewed each year. Elements of the Plan may include PHH financial performance, other total company performance measures, team results and individual results.

Financial Schedules

A financial schedule is developed for each financial element of the Plan. The schedule sets forth the percent of goal that must be achieved for the corresponding payout percentage. The financial schedule may be included on the Annual Plan Insert or provided as a separate document.

Payouts

Payouts at yearend are based on eligible earnings for the period January 1 to December 31. Earnings while on short-term disability and other leaves of absence including Workers’ Compensation are not included. To receive payouts, participants must be actively employed by PHH through the end of the Plan period (year, quarter, or month). Termination of employment prior to that date for any reason other than death, disability, or retirement will lead to forfeiture of payment and/or repayment of any incentives paid, but not earned. In the event of termination of employment for: death, long-term disability, a leave of absence that results in an administrative separation due to the length of the leave or business need, or retirement, prorated payments may be made, with the review of case-by-case circumstances and the specific approval of the SVP Human Resources. Participants with documented performance issues or on a Performance Improvement Plan at any time during the Plan period may jeopardize their eligibility to receive a payout.

Payouts to participants with unresolved PHH debt will be held until the debt is paid or, at PHH’s discretion, until an agreed-upon payment plan has been established. PHH has the right to deduct any unresolved debt from incentive plan payouts.

Other Provisions

As a condition of Plan participation and eligibility for any payout, the participant agrees to comply with the rules, regulations, policies and standards of business conduct of PHH, as well as the directions, assignments and instructions provided by PHH’s leadership.

      

      

      

      

PHH has the authority at its discretion to withhold payment in the case of violations of rules, regulations, policies and standards of the business including misconduct.

This Plan is subject to approval by the President and Chief Executive Officer, the Executive Vice President & Chief Operating Officer, the Senior Vice President, Human Resources and our parent company, Cendant Corporation. The Plan is administered by the Director, Compensation.

These leaders have the sole authority to interpret and execute the provisions of the Plan. All decisions, actions or interpretations are final, conclusive and binding to all parties.

PHH reserves the right to terminate, amend, modify and/or restate this Program (in whole or in part) at any time and without advance notice.

This Plan, or any action taken in connection with it, does not give the participant the right to be retained as an employee with PHH. No person eligible to receive payouts shall have any rights to pledge, assign, or otherwise dispose of any unpaid or anticipated Plan payments.

This Plan document is the exclusive property of PHH and must be surrendered to PHH in the event of termination of employment.