TERMINATION AND RELEASE AGREEMENT
Exhibit 10.12
THIS TERMINATION AND RELEASE AGREEMENT (“Agreement”), dated as of September 8, 2008 is
made by and between WYNDHAM WORLDWIDE CORPORATION, a Delaware corporation (the “Company”),
and Xxxxxx X. Xxxxxxxxx (the “Executive”).
W I T N E S S E T H:
WHEREAS, the Executive and the Company are parties to an Employment Agreement (the
“Employment Agreement”), effective as of July 31, 2006 (the “Employment Agreement”);
WHEREAS, the Executive and the Company have mutually agreed to the termination of the
Executive’s employment as Chief Executive Officer of the Company’s Hotel business unit; and
WHEREAS, the Executive and the Company desire to set forth herein the terms and conditions of
the termination of the Executive’s employment with the Company.
NOW, THEREFORE, in consideration of the mutual promises, representations and warranties set
forth herein, and for other good and valuable consideration, it is hereby agreed as follows:
1. Termination of Employment. The Executive shall terminate employment as Chief
Executive Officer of the Company’s lodging business unit effective as of September 30, 2008 (the
“Termination Date”). Effective as of the Termination Date, the Executive shall execute
and deliver to the Company a letter resigning as an officer and/or director of the Company and
each of its subsidiaries and affiliates.
2. Payments. (a) Provided that this Agreement has been executed and is effective as
set forth in paragraph 26, the Company shall pay the Executive, within ten (10) business days
following the later of the Effective Date or the Termination Date, Two Million One Hundred Sixty
Four Thousand Dollars ($2,164,000) (less applicable amounts withheld in accordance with Section
19 of this Agreement). Such payment, together with the treatment of equity set forth in Section
3 of this Agreement, fulfills the Company’s obligations under Section VII (a) of the Employment
Agreement.
(b) The Executive shall receive all amounts earned through to the Termination Date and shall
continue to be eligible to participate in the Company’s
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Officer Deferred Compensation and Employee Savings plans through the Termination Date in
accordance with the Company’s customary practices applicable to senior executives of the Company.
The Executive shall continue to participate in the Company health and welfare plans in which he
currently participates through the end of the month in which the Termination Date occurs.
Following the Termination Date, the Executive may elect to continue health plan coverage in
accordance with the provisions of the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). In
the event that the Executive elects such continuation of coverage, the Company shall pay, for a
period of up to twelve months from the Termination Date, the Executive’s monthly COBRA premiums in
an amount equal to $961 per month.
(c) The Executive shall be eligible to continue to use the vehicle provided to him through the
PHH Executive Car Lease program upon the same terms as currently are in effect, through and until
January 31, 2009. At that time, the Executive shall have the option to purchase the vehicle in
accordance with the terms of such program for use. If the Executive chooses not to purchase the
vehicle, the Executive shall relinquish the vehicle to Human Resources on or before January 31,
2009.
(d) The Executive may continue to use the financial services provided through The Ayco Company
for the remainder of the 2008 calendar year and through calendar year 2009.
(e) The Company shall pay to the Executive any vested and owing but not yet paid amounts due
under any employee benefit plans or programs of the Company. For avoidance of doubt, any amounts
payable to the Executive pursuant to this Section 2(e) shall be paid in accordance with the terms
of the Company’s applicable employee benefit plans or programs.
(f) Provided that the Executive surrender to the Corporate Information Security department the
Blackberry and Dell X300 laptop computer Product number 64781TU, the Lenovo Monitor. Product number
08505, and the mouse (hereinafter, the “Business Equipment”) that the Executive has been using for
removal and cleansing of all proprietary software and proprietary and confidential information
and/or Company property, the Company will assign to the Executive all ownership interest the
Business Equipment. The Company and the Executive agree that the Business Equipment is of nominal
value.
(g) Provided such services are utilized no later than August 31, 2009, the Company will
provide the Executive with executive level outplacement services with X.X. X’Xxxxxx and Associates
or such other outplacement service provider as shall be mutually agreed upon by the Company and the
Executive.
3. Equity Awards. Provided this Release is executed and effective, (i) all
long-term equity incentive awards (including restricted stock units and stock appreciation
rights) granted to the Executive after the Employment Agreement Effective Date that are
outstanding as of the Termination Date and that otherwise
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would have vested within one year following the Termination Date (“Eligible Awards”) will
vest on the later of the Effective Date or the Termination Date, (ii) any Eligible Award which is
a stock appreciation right will remain outstanding and exercisable for a period of two years
following the Termination Date (but not beyond the original expiration date), and (iii) any
Eligible Award which is a restricted stock unit will be settled in accordance with the terms of
the applicable restricted stock unit agreement. In addition, outstanding awards to purchase
common stock of the Company and common stock of Avis Budget Group, Inc. that were converted from
awards to purchase common stock of Cendant Corporation in connection with the separation of
Cendant Corporation will continue to be governed by the terms of such awards (which generally
provide that outstanding stock options remain exercisable for three years following the
Termination Date, but not beyond the original expiration date).
4. No Mitigation. The Executive shall be under no obligation to seek other
employment in order to be eligible to receive the payments and benefits set forth herein.
5. Release of claims. For and in consideration of the payments and benefits provided
in paragraphs 1 – 4 above, Executive, for himself, his successors and assigns, executors and
administrators, now and forever hereby releases and discharges the Company, together with all of
its past and present parents, subsidiaries and affiliates, together with each of their officers,
directors, stockholders, partners, employees, agents, representatives and attorneys, and each of
their subsidiaries, affiliates, estates, predecessors, successors, and assigns (hereinafter
collectively referred to as the “Releasees”) from any and all rights, claims, charges,
actions, causes of action, complaints, sums of money, suits, debts, covenants, contracts,
agreements, promises, obligations, damages, demands or liabilities of every kind whatsoever, in law
or in equity, whether known or unknown, suspected or unsuspected, which Executive or Executive’s
executors, administrators, successors or assigns ever had, now has or may hereafter claim to have
by reason of any matter, cause or thing whatsoever; arising from the beginning of time up to the
date of the Release:
(i) relating in any way to Executive’ employment relationship with the Company or any of the
Releasees, or the termination of Executive’s employment relationship with the Company or any of the
Releasees;
(ii) arising under any federal, local or state statute or regulation, including, without
limitation, the Age Discrimination in Employment Act of 1967, as amended by the Older Workers
Benefit Protection Act; Title VII of the Civil Rights Act of 1964; Sections 1981 through 1988 of
Title 42 of the United States Code; the Americans with Disabilities Act of 1990, the Employee
Retirement Income Security Act of 1974 (except for vested benefits which are not affected by this
agreement), the National Labor Relations Act; the Fair Labor Standards Act; the Occupational Safety
and Health Act; the Consolidated Omnibus Budget Reconciliation Act of 1985; the Federal Family and
Medical Leave Act; or the Worker Adjustment Retraining Notification Act, each as amended;
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(iii) the New Jersey Equal Pay Law; Law Against Discrimination; Occupational Safety and Health
Laws; Conscientious Employee Protection Act; Tobacco Use Discrimination Law; Family Leave Act; Wage
and Hour Laws; “Workers’ Compensation: Retaliation” provision; “Political Activities of Employees”
provision; “Lie Detector Tests” provision;
(iv) relating to wrongful employment termination or breach of contract; or
(v) arising under or relating to any policy, agreement, understanding or promise, written or
oral, formal or informal, between the Company and any of the Releasees and Executive;
provided, however, that notwithstanding the foregoing, nothing contained in this
Release shall in any way diminish or impair: (a) any rights Executive may have, from and after the
date the Release is executed, under the Termination Agreement, (b) any rights to indemnification
that may exist from time to time under the Company’s certificate of incorporation or bylaws, or
Delaware law; (c) any rights Executive may have to vested benefits under employee benefit plans of
the Company; (d) Executive’s ability to bring appropriate proceedings to enforce the Release, or
(e) any rights or claims Executive may have that cannot be waived under applicable law
(collectively, the “Excluded Claims”). Executive further acknowledges and agrees that,
except with respect to Excluded Claims, the Company and the Releasees have fully satisfied any and
all obligations whatsoever owed to Executive arising out of his employment with the Company or any
of the Releasees, and that no further payments or benefits are owed to Executive by the Company or
any of the Releasees.
6. No Personal Recovery. Executive understands and agrees that, except for the
Excluded Claims, he has knowingly relinquished, waived and forever released any and all rights to
any personal recovery in any action or proceeding that may be commenced on Executive’s behalf
arising out of the aforesaid employment relationship or the termination thereof, including, without
limitation, claims for backpay, front pay, liquidated damages, compensatory damages, general
damages, special damages, punitive damages, exemplary damages, costs, expenses and attorneys’ fees.
7. No Re-employment. Executive agrees never to seek reemployment or future employment
with the Company or any of the other Releasees.
8. Full Consideration. Executive understands and agrees that he would not receive the
monies and/or benefits specified in the Termination Agreement executed herewith, except for his
execution of this Agreement and General Release, and the fulfillment of the promises contained
herein, and that such consideration is greater than any amount to which he would otherwise be
entitled.
9. Severance Plan. Executive acknowledges and agrees, according to Section VII (d) of
the Employment Agreement, that the payments herein are lieu of any eligibility for severance pay he
may otherwise have in accordance with, or pursuant to, the Wyndham Worldwide Severance Pay Plan for
Officers.
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10. Non-Disparagement. (a) The Executive shall take no action which is intended or
would reasonably be expected to damage or otherwise diminish the reputation of the Company or any
of its subsidiaries, affiliates, officers or directors, or lead to unwanted or unfavorable
publicity to the Company or any of its Subsidiaries, affiliates, officers or directors. Nothing in
this Agreement shall prohibit the Executive from providing truthful and accurate information if
required by any court or government agency or body, provided that the Executive notifies the
Company promptly of the receipt by him of any request that he provide such information.
(b) The Company shall make no public statement which is intended, or would reasonably be
expected, to damage or otherwise diminish the Executive’s reputation, or lead to unwanted or
unfavorable publicity to the Executive.
11. Return of Property/ Expense Reimbursement. Subject to the terms of subsections
2(c) and (f) above, on the Termination Date, the Executive shall return all company property to the
Company, including any identification cards, any computer hardware and software, all paper or
computer-based files, business documents, and/or other records as well as all copies thereof,
credit cards, keys and any other Company supplies or equipment in his possession. In addition,
within fifteen days following the Termination Date, all business related expenses for which the
Executive intends to seek reimbursement must be documented and submitted to the Company.
12. Cooperation. The Executive agrees that he will cooperate with the Company and
its counsel in connection with any investigation, administrative proceeding or litigation
relating to any matter that occurred during his employment in which the Executive was involved or
of which the Executive has knowledge by providing truthful information; provided that such
cooperation does not unreasonably interfere with his professional and personal commitments. The
Company agrees to reimburse the Executive for any reasonable expenses incurred in connection with
his cooperation pursuant to this paragraph.
13. Restrictive Covenants. The Executive shall continue to be bound by the
covenants set forth in Section VIII of the Employment Agreement, including without limitation
obligations relating to confidentiality, non-competition, and non-solicitation, and such
provisions shall survive the termination of the Employment Agreement, in accordance with the
terms therein; provided, however, that solely with respect to Section VIII(c)(ii), pertaining to
non-competition, the Post Employment Period, as defined in Section VIII (c)(v) of the Employment
Agreement, shall be for a period of six months from the Termination Date; provided, further, that
Executive may request a waiver of his obligations pursuant to Section VIII(c)(ii) of the
Employment Agreement by submitting a request to the Chief Executive Officer of the Company, who
shall consider such request in his reasonable discretion.
14. Indemnification. The Company shall continue to be bound by the obligations set
forth in Section IX of the Employment Agreement and such provisions shall survive the termination
of the Employment Agreement.
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15. Severability. Should any provision of this Agreement be held, by a court of
competent jurisdiction, to be invalid or unenforceable, such invalidity or unenforceability shall
not render the entire Agreement invalid or unenforceable, and this Agreement and each individual
provision hereof shall be enforceable and valid to the fullest extent permitted by law.
16. Successors and Assigns. (a) This Agreement and all rights under this Agreement
are personal to the Executive and shall not be assignable other than by will or the laws of
descent. All of the Executive’s rights under this Agreement shall inure to the benefit of his
heirs, personal representatives, designees or other legal representatives, as the case may be.
(b) This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns. Any person succeeding to the business of the Company by merger, purchase,
consolidation or otherwise shall assume by contract or operation of law the obligations of the
Company under this Agreement.
17. Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of New Jersey, without regard to the conflicts of laws rules
thereof.
18. Notices. All notices, requests and demands given to or made upon the respective
parties hereto shall be deemed to have been given or made three (3) business days after the date
of mailing when mailed by registered or certified mail, postage prepaid, or on the date of
delivery if delivered by hand, or by any nationally-recognized overnight delivery service,
addressed to the parties at their addresses set forth below or to such other addresses furnished
by notice given in accordance with this Section 18: (a) if to the Company, Wyndham Worldwide
Corporation, 0 Xxxxxx Xxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, Attn: Xxxxx X. XxXxxxxx, General
Counsel, and (b) if to the Executive, to Xxxx Xxxx, Esq., Xxxxxxxxx Xxxx Xxxxx & Xxxxx, LLP,
Metro Corporate Campus One, XX Xxx 0000, Xxxxxxxxxx, XX 00000 .
19. Withholding. All payments required to be made by the Company to the Executive
under this Agreement, including without limitation all equity awards vesting in the name of the
Executive pursuant to the terms of this Agreement, shall be subject to withholding, employment,
social security, medicare, unemployment and other payroll taxes and deductions in accordance with
the Company’s policies applicable to senior executives of the Company and the provisions of any
applicable employee benefit plan or program of the Company.
20. Complete Understanding. This Agreement supersedes any prior contracts,
understandings, discussions and agreements relating to employment between the Executive and the
Company, including but not limited to the Employment Agreement (except to the extent provided in
Sections 13 and 14 hereof), and constitutes the complete understanding between the parties with
respect to the subject matter hereof. No statement, representation, warranty or covenant has
been made by
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either party with respect to the subject matter hereof except as expressly set forth herein.
21. Modification; Waiver. (a) This Agreement may be amended or waived if, and only
if, such amendment or waiver is in writing and signed, in the case of an amendment, by the
Company and the Executive, or in the case of a waiver, by the party against whom the waiver is to
be effective. Any such waiver shall be effective only to the extent specifically set forth in
such writing.
(b) No failure or delay by any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or privilege.
22. Non-admission of liability. It is understood and agreed by Executive that the
payment made to him is not to be construed as an admission of any liability whatsoever on the
part of the Company or any of the other Releasees, by whom liability is expressly denied.
23. Headings. The headings in this Agreement are for convenience of reference only
and shall not control or affect the meaning or construction of this Agreement.
24. Counterparts. This Agreement may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the signatures thereto and hereto were
upon the same instrument.
25. Arbitration. (a) Any controversy, dispute or claim arising out of or relating
to this Agreement or the breach hereof which cannot be settled by mutual agreement (other than with
respect to the matters covered by Section 13 for which the Company may, but shall not be required
to, seek injunctive relief) shall be finally settled by binding arbitration in accordance with the
Federal Arbitration Act (or if not applicable, the applicable state arbitration law) as follows:
Any party who is aggrieved shall deliver a notice to the other party setting forth the specific
points in dispute. Any points remaining in dispute twenty (20) calendar days after the giving of
such notice may be submitted to arbitration in New Jersey, to the American Arbitration Association,
before a single arbitrator appointed in accordance with the arbitration rules of the American
Arbitration Association, modified only as herein expressly provided. After the aforesaid twenty
(20) calendar days, either party, upon ten (10) calendar days notice to the other, may so submit
the points in dispute to arbitration. The arbitrator may enter a default decision against any party
who fails to participate in the arbitration proceedings.
(b) The decision of the arbitrator on the points in dispute shall be final, unappealable and
binding, and judgment on the award may be entered in any court having jurisdiction thereof.
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(c) Except as otherwise provided in this Agreement, the arbitrator shall be authorized to
apportion its fees and expenses and the reasonable attorneys’ fees and expenses of any such party
as the arbitrator deems appropriate. In the absence of any such apportionment, the fees and
expenses of the arbitrator shall be borne equally by each party, and each party shall bear the fees
and expenses of its own attorney.
(d) The parties agree that this Section 25 has been included to rapidly and inexpensively
resolve any disputes between them with respect to this Agreement, and that this Section 25 shall be
grounds for dismissal of any court action commenced by either party with respect to this Agreement,
other than post-arbitration actions seeking to enforce an arbitration award. In the event that any
court determines that this arbitration procedure is not binding, or otherwise allows any litigation
regarding a dispute, claim, or controversy covered by this Agreement to proceed, the parties hereto
hereby waive any and all right to a trial by jury in or with respect to such litigation.
(e) The parties shall keep confidential, and shall not disclose to any person, except as may
be required by law, the existence of any controversy hereunder, the referral of any such
controversy to arbitration or the status or resolution thereof.
26. Voluntary Execution. Executive acknowledges and agrees that Executive has been
advised to consult with an attorney of Executive’s choosing prior to signing this Agreement.
Executive understands and agrees that Executive has the right and has been given the opportunity to
review the Release with an attorney of Executive’s choice should Executive so desire. Executive
also agrees that Executive has entered into the Release freely and voluntarily. Executive further
acknowledges and agrees that Executive has had at least twenty-one (21) calendar days to consider
the Release, although Executive may sign it sooner if Executive wishes. In addition, once
Executive has signed the Release, Executive shall have seven (7) additional days from the date of
execution to revoke Executive’s consent and may do so by giving notice as set forth in paragraph 18
herein. The Release shall not be effective, and no payments shall be due hereunder, until the
eighth (8th) day after Executive shall have executed the Release and returned it to the Company,
assuming that Executive had not revoked Executive’s consent to the Release prior to such date (the
“Effective Date”).
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed in its corporate
name, and the Executive has manually signed his name hereto, all as of the day and year first above
written.
| WYNDHAM WORLDWIDE CORPORATION |
||||
| By: | /s/ Xxxx X. Xxxxxx | |||
| Xxxx X. Xxxxxx | ||||
| Executive Vice President | ||||
| /s/ Xxxxxx X. Xxxxxxxxx | ||||
| Xxxxxx X. Xxxxxxxxx | ||||
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