EXHIBIT (e)(17)
TRAVELOCITY HOLDINGS, INC.
EXECUTIVE TERMINATION BENEFITS AGREEMENT
This Executive Termination Benefits Agreement ("Agreement") dated as of
August 2, 2000("Effective Date"), is among Travelocity Holdings, Inc., a
Delaware corporation (the "Company") and XXXXX XxXXXXXXX (the "Executive").
WHEREAS, the Board of Directors recognizes that the possibility of a Change
in Control affecting the Company, and the uncertainty which it may raise among
management personnel, may result in the departure or distraction of management
personnel to the detriment of the Company and its stockholders;
WHEREAS, the Board of Directors considers it essential to the best
interests of the Company and its stockholders that its key executives be
incentivized to remain with the Company, and to continue to devote their full
attention and dedication to the Company's business and their assigned duties, in
the event of an actual or likely Change in Control;
WHEREAS, the Board of Directors believes the Executive is a key executive
of the Company and, in the event of an actual or likely Change in Control, the
Board of Directors wants the Executive to continue performing his or her duties,
to assess the impact of the potential Change in Control, to advise the Company
whether the potential Change in Control is in the best interests of the Company
and its shareholders, to assist in implementing the Change in Control, and to
take such other actions as the Board might determine to be appropriate under the
circumstances, all without the Executive being distracted by personal concerns
about the impact of the potential Change in Control on the Executive;
NOW, THEREFORE, in consideration of the mutual covenants below and other
good and valuable consideration, and in order to incentivize the Executive to
remain in the employ of the Company in the event of an actual or likely Change
in Control, the Company and the Executive agree as follows:
1. DEFINED TERMS. For purposes of this Agreement, the following terms
have the meanings ascribed to them below:
(a) "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of
the Company.
(b) "CAUSE" shall mean the Executive's (i) indictment for a felony or
a crime involving moral turpitude, (ii) theft or embezzlement of property
from the Company or other act of dishonesty related to Executive's
employment, (iii) violation of a key Company policy (including, but not
limited to, acts of harassment or discrimination, or use of unlawful drugs
or drunkenness on Company property during normal working hours), (iv)
competition with the Company, diversion of corporate opportunity or other
similarly serious conflict of interest or self-dealing inuring to
Executive's direct or indirect benefit and the Company's detriment, or (v)
willful or grossly negligent misconduct or failure substantially to perform
the duties of his position, but only if such has continued after receipt of
such notices and cure periods as are provided for by the
Company's disciplinary process as in effect on the Change in Control and/or
Change in Equity Structure date.
(c) "CHANGE IN CONTROL" means an occurrence after the Effective Date
of any one or more of the following:
(i) An Acquiring Person (as hereinafter defined), without the
prior approval of the Travelocity Board of Directors, shall become the
"Beneficial Owner" (as defined in Rule 13d-3 under the Exchange Act,
as amended from time to time), directly or indirectly, of voting
securities of Travelocity entitled to vote for the election of
directors at any annual or special meeting of stockholders of
Travelocity (such entitlement, "Voting Power" and such securities.
"Voting Securities") representing both (a) twenty-five percent (25%)
or more of the Voting Power of Travelocity's then outstanding Voting
Securities and (b) a percentage of the Voting Power of Travelocity's
then outstanding Voting Securities which is equal to or greater than
the percentage of the Voting Power as is represented by Voting
Securities Beneficially Owned, directly or indirectly, by Sabre. An
"Acquiring Person" shall mean any person OTHER THAN (a) an employee
benefit plan (or a trust forming a part thereof) maintained by (1) the
Company, Xxxxxxxxxxx.xxx LP (the "Partnership") or Travelocity or (2)
any corporation or other Person of which a majority of its voting
power or its voting equity securities or equity interest is
Beneficially Owned, directly or indirectly, by Travelocity or the
Partnership (a "Related Entity"), or the Company, (b) Travelocity, the
Partnership or any Related Entity, (c) a Person who has acquired the
Voting Securities in connection with a "Non-Control Transaction" (as
hereinafter defined), but only to the extent such Voting Securities
are acquired in connection with one or more Non-Control Transactions,
or (d) Sabre, and any corporation or other Person of which a majority
of its voting power or its voting equity securities or equity interest
is Beneficially Owned, directly or indirectly, by Sabre;
(ii) The individuals, as of the effective date(the "Merger
Effective Time") of the merger of Preview Travel, Inc. with and into
Travelocity pursuant to the March 7, 2000 Merger by and among Sabre,
the Company, Travelocity, and Preview Travel, Inc., who constitute the
board of directors of Travelocity (the "Incumbent Board"), cease for
any reason to constitute at least a majority of the board of directors
of Travelocity; provided, however, that any individual becoming a
director subsequent to the Merger Effective Time whose election, or
nomination for election by Travelocity's stockholders, was approved by
a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding for this purpose, any
such individual whose initial assumption of office occurs as a result
of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other
than the board of directors of Travelocity;
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(iii) The Consummation of:
(a) A merger, consolidation or similar reorganization of
Travelocity or in which securities of Travelocity are issued (a
"Merger"), unless the Merger is a "Non-Control Transaction." A
"Non-Control Transaction" shall occur when, in the context of a
Merger,
(1) the stockholders of Travelocity immediately before
such Merger Beneficially Own, directly or indirectly, immediately
following the Merger at least fifty percent (50%) of the combined
voting power of the outstanding voting securities of (x) the
corporation resulting from such Merger (the "Surviving
Corporation"), if fifty percent(50%) or more of the combined
voting power of the then outstanding voting securities of the
Surviving Corporation is not Beneficially Owned, directly or
indirectly by another corporation (a "Parent Corporation"), or
(y) the Parent Corporation, if fifty percent(50%) or more of the
combined voting power of the Surviving Corporation's then
outstanding voting securities is Beneficially Owned, directly or
indirectly, by a Parent Corporation; AND
(2) the individuals who were members of the board of
directors of Travelocity, immediately prior to the execution of
the agreement providing for the Merger, constitute at least a
majority of the members of the board of directors of, (x) the
Surviving Corporation, if fifty percent (50%) or more of the
combined voting power of the then outstanding voting securities
of the Surviving Corporation is not Beneficially Owned, directly
or indirectly by a Parent Corporation, or (y) the Parent
Corporation, if fifty percent (50%) or more of the combined
voting power of the Surviving Corporation's then outstanding
voting securities is Beneficially Owned, directly or indirectly,
by a Parent Corporation;
(iv) The sale or other disposition of all or substantially all
of the assets of Travelocity to any Person(other than a transfer to a
Related Entity or under conditions that would constitute a Non-Control
Transaction with the disposition of assets being regarded as a Merger
for this purpose);
(v) A complete liquidation or dissolution of Travelocity; or
(vi) Any other event to which, in the opinion of the Board, the
provisions of clauses (i) through (v) are not strictly applicable but,
in the opinion of the Board, is within the intent and effect of such
clauses.
Notwithstanding anything else contained herein to the contrary,
in no event shall a Change in Control be deemed to occur solely by
reason of (1) a distribution to Sabre's stockholders, whether as
dividend or otherwise, of all or any portion of the Voting Securities
held, directly or indirectly, by Sabre (including, without limitation,
a distribution to Sabre's stockholders of securities
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of the Company), or (2) a sale of all or any portion of the Voting
Securities held, directly or indirectly, by Sabre in an underwritten
public offering (including, without limitation, a sale of securities
of the Company in an underwritten public offering), or (3) any Person
(the "Subject Person") acquiring Beneficial Ownership of more than the
permitted amount of the then outstanding Voting Securities as a result
of the acquisition of Voting Securities by Travelocity which, by
reducing the number of Voting Securities then outstanding, increases
the proportional number of shares Beneficially Owned by the Subject
Person, provided that if a Change in Control would occur (but for the
operation of this sentence) as a result of the acquisition of Voting
Securities by Travelocity, and after such share acquisition by
Travelocity, the Subject Person becomes the Beneficial Owner of any
additional Voting Securities which increases the percentage of the
then outstanding Voting Securities Beneficially Owned by the Subject
Person, then a Change in Control shall occur.
(d) "COMPANY" means Travelocity Holdings, Inc., except that with
respect to employment or payment the term also includes direct and indirect
subsidiaries and affiliates of Travelocity Holdings, Inc.
(e) "DISABILITY" means the Executive's permanent inability to perform
the essential job functions of his or her position with or without
reasonable accommodation.
(f) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor or replacement thereto.
(g) "NOTICE OF TERMINATION" means a notice to the Executive or the
Company described in Section 3) below, and delivered in accordance with the
procedures of Section 3) below.
(h) "PERSON" has the meaning ascribed to that term in Section 3(a)(9)
of the Exchange Act and as used in Sections 13(d) and 14(d) thereof, and
includes a "group" as defined in Section 13(d) of the Exchange Act; but
excludes the Company and any direct or indirect subsidiary of the Company
and any employee benefit plan sponsored or maintained by the Company or any
direct or indirect subsidiary of the Company (including any trustee of such
plan acting as trustee).
(i) "SABRE" means Sabre Holdings Corporation, a Delaware corporation.
(j) "TARGET BONUS" means the target award established by the
Compensation Committee of the Board under the Company's Variable Incentive
Plan, assuming 100 percent of the target level Corporate Performance
Measures are achieved thereunder.
(k) "TRAVELOCITY" means Xxxxxxxxxxx.xxx, Inc., a Delaware corporation,
and an affiliate of the Company.
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2. CIRCUMSTANCES TRIGGERING RECEIPT OF SEVERANCE BENEFITS
(a) Subject to Section 2(c) below, and conditioned on the Executive's
compliance with the Non-Disclosure, Non-Solicitation, Non-Disparagement, and
Non-Compete covenants contained in the Travelocity Intellectual
Property/Confidentiality Agreement dated February 18, 2000, the employment
letter agreement effective as of March 7, 2000 by and between the Company and
Executive ("Employment Agreement"), and the provisions of Section 7 hereof, and
Executive's execution of a Waiver and Release Agreement satisfactory to the
Company, the Company will provide the Executive with the benefits set forth in
Sections 4 and 6 below upon any termination of the Executive's employment:
(i) by the Company at any time within the first twenty-four
(24) months after a Change in Control.
(ii) by the Company at any time within one hundred eighty (180)
days prior to a Change in Control;
(iii) by the Executive for "Good Reason" (as defined in Section
2(b) below) at any time within the first twenty-four (24) months after a
Change in Control.
(b) For purposes of Section 2(a)(iii) above, the Executive will be
entitled to terminate employment with the Company and its subsidiaries for "Good
Reason" after a Change in Control if:
(i) without the Executive's written consent, one or more of
the following events occurs at any time during the first twenty-four (24)
months after such Change in Control;
(1) the Executive is not appointed to, or is otherwise
removed from, any office or position with the Company or its
subsidiaries that is held by the Executive immediately prior to the
Change in Control for any reason other than for Cause;
(2) the Executive's Base Salary rate or potential Target
Bonus is reduced below that in effect immediately prior to the Change
in Control for any reason other than for Cause;
(3) the Executive's principal office is moved, without the
Executive's consent, to a location that is more than twenty-five (25)
statute miles from its location immediately prior to the Change in
Control, unless in conjunction with a relocation of the Company's
headquarters to San Francisco or its surrounding metropolitan area;
(4) the Executive suffers a significant adverse change in
the nature or scope of the authorities, powers, functions,
responsibilities, reporting relationships, or duties attached to the
position with the Company which the Executive held immediately prior
to the Change in Control;
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(5) the Executive determines in good faith that a change in
circumstances has occurred following a Change in Control which has
rendered the Executive substantially unable to carry out, has
substantially hindered the Executive's performance of, or has caused
the Executive to suffer a substantial reduction in, any of the
authorities, powers, functions, responsibilities, reporting
relationships, or duties attached to the position immediately prior to
the Change in Control;
(6) for any reason other than in connection with a bona fide
restructuring of the Executive's benefits that does not reduce the
overall level of such benefits, the Company asserts the intention to
reduce or reduces any benefit provided to the Executive below the
level of such benefit provided immediately prior to the Change in
Control, other than pursuant to the terms of any employment agreement
between the Company or a subsidiary of the Company and the Executive
("Employment" Agreement") (unless the Company agrees to fully
compensate Executive for any such reduction);
(7) a successor where applicable, does not assume and agree
to the terms of this Agreement in accordance with Section (8) below;
or
(8) the Company purports to terminate Executive's employment
other than in accordance with a Notice of Termination.
(ii) the Executive notifies the Company in writing (addressed in
care of the Chairman of the Board of the Company) of the occurrence of such
event;
(iii) within thirty (30) days following receipt of such written
notice, the Company does not cure such event to the reasonable satisfaction
of the Executive and deliver to the Executive a written statement that it
has done so; and
(iv) within sixty (60) days following the expiration of the
period specified in Section 2(b)(iii) above (without the occurrence of a
cure and written notice thereof as described in Section 2(b)(iii) above),
the Executive voluntarily terminates employment with the Company.
(c) Notwithstanding Sections 2(a) and 2(b) above, no benefits will be
payable by reason of this Agreement in the event of:
(i) Termination of the Executive's employment with the Company
by reason of the Executive's death or Disability, so long as neither the
Executive nor the Company previously received a Notice of Termination for
the Executive.
(ii) Termination by the Executive of the Executive's employment
with the Company at or after age sixty-five (65) if the Executive is then
eligible for retirement; or
(iii) Termination of the Executive's employment with the Company
for Cause.
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This Section 2(c) will not preclude the payment of any amounts otherwise
payable to the Executive under any of the Company's employee benefits plans,
programs and arrangements and/or under any Employment Agreement. The Executive
will not be deemed to have been terminated for Clause unless (A) reasonable
notice is given to the Executive that the Board of Directors intend to meet to
consider terminating the Executive for Clause, (B) a meeting of the Board of
Directors is held at which the Executive (and his legal counsel if desired by
the Executive) is given an opportunity to present a defense, and (C) following
that meeting, a resolution is approved by the affirmative vote of at least
seventy-five percent (75%) of the members of the Board of Directors of the
Company, which concludes that Cause exists, specifies the acts or failures to
act constituting Cause, and approves the termination of the Executive for Cause.
3. NOTICE OF TERMINATION. Any termination of the Executive's employment
with the Company as contemplated by Section 2 above will be communicated by
written notice to the Executive or the Company delivered in person or by
certified mail. Any "Notice of Termination" will: (i) state the effective date
of termination, which will not be less than thirty (30) days or more than sixty
(60) days after the date the Notice of Termination is delivered (the
"Termination Date"), except that the Termination Date may be immediate if Cause
exists; (ii) state the specific provision in this Agreement being relied upon
for termination; (iii) state the facts and circumstances claimed to provide a
basis for such termination in reasonable detail, and (iv) in the case of
termination for Cause, be signed by the Chairman of the Board of the Company.
4. TERMINATION BENEFITS. Subject to the conditions set forth in Section
2 above, the Company will pay or provide to the Executive (net of any applicable
payroll or other taxes required to be withheld) the following:
(a) COMPENSATION. In the event that a Change in Control has occurred,
the Company will pay the Executive the greater of:
(i) the sum of the Executive's annual base salary and two (2)
times his Target Bonus as in effect at the Termination Date, or
(ii) the sum of the Executive's annual base salary and two (2)
times his Target Bonus as in effect on the Change in Control date.
The payment shall be made in a single lump sum cash payment on the first
day of the month following the Termination Date.
(b) HEALTH AND OTHER INSURANCE BENEFITS. Subject to the last sentence
of this paragraph (b), the Company will continue to provide to Executive, on the
same terms and conditions (including cost) provided to its active employees
generally, coverage under its major medical, dental, vision care, and group term
life insurance benefits plans, during the twelve (12) month period following the
Termination Date. The Company shall adopt such amendments to its employee
benefit plans and insurance policies as are necessary to effectuate the
provisions of this Agreement. However, notwithstanding the above, the benefits
and coverage provided for in this paragraph 4(b) shall terminate in the event
the Executive or his spouse becomes eligible for
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comparable employer provided coverage from any other employer(whether or not the
Executive and his spouse accepts or elects any such alternate coverage).
(c) STOCK BASED COMPENSATION PLANS.
(i) Any issued and outstanding Stock Options and Stock
Appreciation Rights granted in connection with such Stock Options issued
under the Company's 1999 Long-Term Incentive Plan, 2000 Stock Option Plan,
or any successor plans(collectively the "LTIPs") will become 100 percent
vested and immediately exercisable. Executive shall have at least ninety
(90) days to exercise such Options or SARs (or such longer period of time
as specified in the LTIPs), unless the Option term would otherwise expire
earlier.
(ii) The Executive's rights under any other stock-based
compensation granted under the LTIPs, including but not limited to
restricted stock, performance shares, stock appreciation rights, and stock
equivalent units, will also immediately vest (to the extent they have not
already vested) in accordance with the Company's LTIPs.
(d) ACCRUED AMOUNTS. The Company will pay to the Executive all other
amounts accrued or earned by the Executive through the Termination Date and
amounts otherwise owing under the then existing plans and policies of the
Company including but not limited to all amounts of compensation previously
deferred by the Executive(together with any accrued interest thereon) and not
yet paid by the Company, and any accrued vacation pay not yet paid by the
Company.
5. PAYMENT OF CERTAIN LEGAL FEES AND COSTS.
(a) If a dispute arises regarding a termination of the Executive or
the interpretation or enforcement of this Agreement, after a Change in Control,
the parties will submit the dispute, within thirty(30) business days following
service of notice of such dispute by one party on the other, to
J*A*M*S/Endispute for prompt resolution in Dallas, Texas, under its rules for
labor and employment disputes. The Arbitrator will have no authority to order a
modification or amendment of this Agreement. The decision of the Arbitrator will
be final and binding upon the parties. All reasonable fees and expenses,
including, without limitation, any arbitration or legal expenses, incurred by
the Executive in contesting or disputing any such termination (in whole or in
part) or in obtaining or enforcing any right or benefit provided for in this
Agreement (in whole or in part) or in otherwise pursuing his or her claim (in
whole or in part) will be paid by the Company, to the extent permitted by law,
regardless of whether the Executive is successful.
(b) In the event that the Company refuses or otherwise fails to make a
payment when due and it is ultimately decided that the Executive is entitled to
such payment, such payment will be increased to reflect an interest factor
compounded annually, equal to the prime rate in effect as of the date the
payment was first due plus two points. For this purpose, the prime rate will be
based on the rate identified by Chase Manhattan Bank at its prime rate.
6. LIMITATION ON PAYMENTS. In the event that the payments and other
benefits provided for in this Agreement or otherwise payable to the Executive
(i) constitute "parachute
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payments" within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), and (ii) but for this Section 6, would be subject
to the excise tax imposed by Section 4999 of the Code (or any corresponding
provisions of state income tax law), then the Executive's benefits hereunder
shall be either
(a) delivered in full, or
(b) delivered as to such lesser extent which would result in no
portion of such benefits being subject to excise tax under Section 4999 of
the Code,
whichever of the foregoing amounts, taking into account the applicable federal,
state and local income taxes and the excise tax imposed by Section 4999, results
in the receipt by the Executive on an after-tax basis, of the greater amount of
benefits, notwithstanding that all or some portion of such benefits may be
taxable under Section 4999 of the Code. Unless the Company and the Executive
otherwise agree in writing, any determination required under this Section 6
shall be made in writing by the Company's independent public accountants (the
"Accountants"), whose determination shall be conclusive and binding upon the
Executive and the Company for all purposes. For purposes of making the
calculations required by this Section 6, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Code. The Company and the Executive shall furnish to the
Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this Section. The Company shall
bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this Section 6. In the event that subsection (a)
above applies, then Executive shall be responsible for any excise taxes imposed
with respect to such benefits. In the event that subsection (b) above applies,
then each benefit provided hereunder shall be proportionately reduced to the
extent necessary to avoid imposition of such excise taxes.
7. NON-COMPETE.
(a) COVENANT NOT TO COMPETE.
(i) Compliance with the provisions of this Section 7 are an
express condition of the Executive's rights to payments, vesting, and
benefits hereunder. Executive acknowledges and recognizes the confidential
information and records provided by the Company and its parents,
subsidiaries, affiliates, successors, and assigns (collectively, the
"Employer"), the benefits provided hereunder and under the Employment
Agreement, and the professional training and experience he will receive
from and the contacts he will be provided by Employer, as well as the
highly competitive nature of Employer's business, and in consideration of
all of the above, agrees that during the period beginning on the effective
date of Executive's termination of employment with Employer (the "Date of
Termination") and ending twelve (12) months thereafter (the "Covered
Time"), Executive will not compete with the business of Employer. For
purposes hereof, "competition" shall mean any engaging, directly or
indirectly, in the "Covered Business" (as hereinafter defined) in any state
of the United States of America or any nation in which the Employer is
conducting business as of the Date of Termination
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(the "Covered Area"). For purposes of this Agreement, "Covered Business"
shall mean providing any services for any Travelocity Direct Competitor.
For purposes hereof, Travelocity Direct Competitor shall mean any entity
that offers travel services via the Internet directly to individual
customers and that obtains, or is reasonably expected to obtain, at least
$100 million in annual gross revenues from such services, including,
without limitation, Expedia, Inc. Xxxxxxxxx.xxx, and the Orbitz joint
website announced by United Air Lines, Delta Airlines, Continental
Airlines, and Northwest Airlines. For purposes of this Section 7, the
phrase, "engaging, directly or indirectly" shall mean engaging directly or
having an interest, directly or indirectly, as owner, partner, shareholder,
agent, representative, employee, officer, director, independent contractor,
capital investor, lender, renderer of consultation services or advice or
otherwise (other than as the holder of less than 2% of the outstanding
stock of a publicly-traded corporation), either alone or in association
with others, in the operation of any aspect of any type of business or
enterprise engaged in any aspect of the Covered Business.
(ii) Executive agrees that during the term of this Agreement
(including any extensions thereof) and for the twenty-four (24) months
thereafter, he shall not (i) directly or indirectly solicit or attempt to
solicit any of the employees, agents, consultants, or representatives of
Employer or affiliates of Employer to leave any of such entities; or (ii)
directly or indirectly solicit or attempt to solicit any of the employees,
agents, consultants, or representatives of Employer or affiliates of
Employer to become employees, agents, representatives or consultants of any
other person or entity.
(iii) Executive understands that the provisions of Sections
7(a)(i) and (ii) may limit his ability to earn a livelihood in a business
similar to the business of Employer but nevertheless agrees and hereby
acknowledges that the restrictions and limitations thereof are reasonable
in scope, area, and duration, are reasonably necessary to protect the
goodwill and business interests of Employer, and that the consideration
provided under this Agreement is sufficient to justify the restrictions
contained in such provisions. Accordingly, in consideration thereof and in
light of Executive's education, skills and abilities, Executive agrees that
he will not assert that, and it should not be considered that, such
provisions are either unreasonable in scope, area, or, duration, or will
prevent him from earning a living, or otherwise are void, voidable, or
unenforceable or should be voided or held unenforceable.
(b) ENFORCEMENT.
(i) The parties hereto agree and acknowledge that the covenants
and agreements contained herein are reasonable in scope, area and duration
and necessary to protect the reasonable competitive business interests of
Employer, including, without limitation, the value of the proprietary
information and goodwill of Employer.
(ii) Executive agrees that the covenants and undertakings
contained in Section 7 of this Agreement relate to matters which are of a
special, unique and extraordinary character and that Employer cannot be
reasonably or adequately compensated in damages in an action at law in the
event Executive breaches any of these covenants or undertakings. Therefore,
Executive agrees that Employer shall be entitled,
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as a matter of course, without the need to prove irreparable injury, to an
injunction, restraining order or other equitable relief from any court of
competent jurisdiction, restraining any violation or threatened violation
of any of such terms by Executive and such other persons as the court shall
order. Executive agrees to pay costs and legal fees incurred by Employer in
obtaining such injunction.
(iii) Rights and remedies provided for in this Section 7(b) are
cumulative and shall be in addition to rights and remedies otherwise
available to the parties under any other agreement or applicable law.
(iv) In the event that any provision of this Agreement shall to
any extent be held invalid, unreasonable or unenforceable in any
circumstances, the parties hereto agree that the remainder of this
Agreement and the application of such provision of this Agreement to other
circumstances shall be valid and enforceable to the fullest extent
permitted by law. If any provision of this Agreement, or any part
thereof, is held to be unenforceable because of the scope or duration of or
the area covered by such provision, the parties hereto agree that the court
or arbitrator making such determination shall reduce the scope, duration
and/or area of such provision (and shall substitute appropriate provisions
for any such unenforceable provisions) in order to make such provision
enforceable to the fullest extent permitted by law, and/or shall delete
specific words and phrases, and such modified provision shall then be
enforceable and shall be enforced. The parties hereto recognize that if, in
any judicial proceeding, a court shall refuse to enforce any of the
separate covenants contained in this Agreement, then that unenforceable
covenant contained in this Agreement shall be deemed eliminated from these
provisions to the extent necessary to permit the remaining separate
covenants to be enforced. In the event that any court or arbitrator
determines that the time period or the area, or both, are unreasonable and
that any of the covenants is to that extent unenforceable, the parties
hereto agree that such covenants will remain in full force and effect,
first, for the greatest time period, and second, in the greatest
geographical area that would not render them unenforceable.
(v) In the event of Executive's breach of this Section 7, in
addition to all other rights Employer may have hereunder or in law or in
equity, all payments and benefits hereunder shall cease; all options,
stock, and other securities granted by the Employer or Travelocity,
including stock obtained through prior exercise of options, whether
pursuant to the LTIP or otherwise, shall be immediately forfeited(whether
or not vested), and the original purchase price, if any, shall be returned
to the Executive; and all profits received through exercise of options or
sale of stock, and all previous payments and benefits made or provided
hereunder shall be promptly returned and repaid to the Company.
8. SUCCESSORS
(a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to the Executive, to expressly assume and agree
to perform this Agreement in the same manner and to the same
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extent that the Company would be required to perform it if no such Change in
Control or Change in Equity Structure had taken place. Failure of such successor
entity to enter into such agreement prior to the effective date of any such
succession (or, if later, within three business days after first receiving a
written request for such agreement) will constitute a breach of this Agreement
and will entitle the Executive to terminate his employment pursuant to Section
2(a)(iii) above and to receive the payments and benefits provided under Sections
4, 5, and 6 above.
(b) This Agreement will inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees, and legatees. If the Executive dies
while any amounts are payable hereunder, all such amounts, unless otherwise
provided herein, will be paid in accordance with the term of this Agreement to
his successors, heirs, distributees, devisees, legatees or other designees or,
if there is no such designee, to his estate.
9. NOTICES. For the purposes of this Agreement, notices and all other
communications provided for herein will be in writing and will be deemed to have
been duly given when delivered or mailed by registered or certified mail, return
postage prepaid, addressed as follows:
If to the Executive:
Xxxxx XxXxxxxxx
0000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
If to the the Company:
Travelocity Holdings, Inc.
Attn: Chairman, Board of Directors
with copy to Executive Vice President-Administration
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxx Xxxxx, Xxxxx 00000
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address will be
effective only upon receipt.
10. GOVERNING LAW. THE VALIDITY, INTERPRETATION, CONSTRUCTION AND
PERFORMANCE OF THIS AGREEMENT WILL BE GOVERNED BY AND ENFORCED UNDER THE LAWS OF
THE STATE OF DELAWARE.
11. AMENDMENTS; WAIVERS; ENTIRE AGREEMENT. No provisions of this Agreement
may be modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing signed by the Executive and the Company. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party will be deemed a waiver of similar or
dissimilar provisions or conditions at the same or any prior or subsequent time.
No agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof
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have been made by either party which are not set forth expressly in this
Agreement (or in any employment or other written agreement relating to the
Executive).
12. SEPARABILITY. The invalidity or unenforceability of any provisions of
this Agreement will not affect the validity or enforceability of any other
provision of this Agreement which will remain in full force and effect.
13. NON-ASSIGNABILITY. This Agreement is personal in nature and neither of
the parties hereto will, without the consent of the other, assign or transfer
this Agreement or any rights or obligations hereunder, except as provided in
Section 8 above. Without limiting the foregoing, the Executive's right to
receive payments hereunder will not be assignable or transferable, whether by
pledge, creation of a security interest or otherwise, other than a transfer by
his will or by the laws of descent or distribution, and in the event of any
attempted assignment or transfer by Executive contrary to this Section, the
Company will have no liability to pay any amount so attempted to be assigned or
transferred to any person other than the Executive or in the event of his death,
his designated beneficiary or, in the absence of an effective beneficiary
designation, the Executive's estate.
14. WAIVER OF OTHER SEVERANCE BENEFITS. The benefits payable pursuant to
this Agreement are in lieu of any other severance benefits which may otherwise
be payable to the Executive upon termination following a Change in Control or
Change in Equity Structure, except those benefits which are to be made available
to the Executive as required by applicable law.
15. NO SET-OFF. There shall be no right of set-off or counterclaim in
respect of any claim, debt, or obligation against any payment to or benefit for
the Executive provided for in this Agreement.
16. NO MITIGATION OBLIGATION. Except as provided in Section 4(b) hereof,
the parties hereto expressly agree that the payment of the benefits by the
Company to the Executive in accordance with the terms of this Agreement will be
liquidated damages, and that the Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise, nor shall any Profits, Income, Earnings or other benefits from any
source whatsoever create any mitigation, offset, reduction or any other
obligation on the part of the Executive hereunder or otherwise.
17. INDEMNIFICATION. The Company shall indemnify, defend, and hold the
Executive harmless from and against any liability, damages, costs, or expenses
(including attorney's fees) in connection with any claim, cause of action,
investigation, litigation, or proceeding involving him by reason of his having
been an officer, director, employee, or agent of the Company, unless it is
judicially determined, in a final, nonappealable order, that the Executive was
guilty of gross negligence or willful misconduct. The Company also agrees to
maintain adequate directors and officers liability insurance for the benefit of
Executive for the term of this Agreement and for at least three years
thereafter.
18. TERMINATION. This Agreement shall survive the Executive's termination
of employment and shall not be terminable.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the day and year first above set forth, thereby mutually and
voluntarily agreeing that this Agreement supersedes and replaces any prior
similar agreements for such termination benefits.
TRAVELOCITY HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxxxx
Executive Vice-President, General Counsel
and Corporate Secretary
XXXXX XxXXXXXXX
Signed: /s/ Xxxxx XxXxxxxxx
-----------------------------
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