EMPLOYMENT AGREEMENT
Exhibit
10.2
Avis
Budget Group, Inc. (the "Company") and F. Xxxxxx Xxxxxxx (the
"Executive") are parties to this certain Employment Agreement
effective, as amended and restated, as of December 29, 2008 (as amended and
restated, this "Agreement").
WHEREAS,
Cendant Corporation (which has
been renamed Avis Budget Group, Inc.) and the Executive were parties to a
certain Employment Agreement effective as of August 1, 2003 and amended as
of
May 31, 2006 (the "2006 Agreement"); and
WHEREAS,
the Company and the Executive agree to amend and restate the 2006 Agreement
in
its entirety as set forth herein;
WHEREAS,
the Company desires to continue to employ the Executive as a full-time employee
of the Company and the Executive desires to continue to serve the Company in
such capacity.
NOW
THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
parties hereby agree that this Agreement is amended and restated to read as
follows:
SECTION
I
EFFECTIVENESS
This
Agreement shall be effective as of January 1, 2009 (the "Effective
Date").
SECTION
II
EMPLOYMENT;
POSITION AND RESPONSIBILITIES
The
Company agrees to employ the Executive, and the Executive agrees to be employed
by the Company, for the Period of Employment as provided in Section III below
and upon the terms and conditions provided in this Agreement. From the Effective
Date until the date that is eighteen months following the Effective Date (the
"Transition Date"), the Executive shall serve as the President
and Chief Operating Officer of the Company. From the Transition Date through
the
end of the Period of Employment, the Executive shall serve as Vice Chairman
of
the Company in a transitional role without day to day operating responsibility.
During the Period of Employment, the Executive shall report to, and be subject
to the direction of the Chief Executive Officer of the Company (the
"Supervising Officer"). The Executive shall perform
such duties and exercise such supervision with regard to the
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business
of the Company as are associated with his position, as well as such additional
duties as may be prescribed from time to time by the Supervising Officer. The
Executive shall, during the Period of Employment, devote substantially all
of
his time and attention during normal business hours to the performance of
services for the Company. The Executive shall maintain a primary office and
conduct his business in Parsippany, New Jersey (the "Business
Office"), except for normal and reasonable business travel in
connection with his duties hereunder.
In
addition, during the Period of Employment, the Executive shall continue serve
as
a member of the Company's Board of Directors (the "Board");
provided, however, that the Executive's continued service as a member of the
Board shall at all times remain subject to any and all nomination and election
procedures in accordance with the Company's by-laws.
SECTION
III
PERIOD
OF EMPLOYMENT
The
period of the Executive's employment under this Agreement (the "Period
of Employment") shall begin on the Effective Date and shall end on the
third anniversary of the Effective Date, subject to earlier termination as
provided in this Agreement.
SECTION
IV
COMPENSATION
AND BENEFITS
For
all
services rendered by the Executive pursuant to this Agreement during the Period
of Employment, including services as an executive officer, director or committee
member of the Company or any subsidiary or affiliate of the Company, the
Executive shall be compensated as follows:
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(a)
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Base
Salary. The Company shall pay the Executive a fixed base salary
("Base Salary") of not less than: (i) seven hundred
thousand dollars ($700,000), per annum, for the 2009 calendar year;
(ii)
seven hundred fifty thousand dollars ($750,000), per annum, for the
2010
calendar year; and (iii) eight hundred thousand dollars ($800,000),
per
annum, for the 2011 calendar year. Base Salary shall be payable
according to the customary payroll practices of the Company, but
in no
event less frequently than once each
month.
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(b)
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Annual
Incentive Awards
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(i)
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The
Executive shall be eligible to earn a target Annual Bonus for each
fiscal
year of the Company ending during the Period of Employment (each,
an
"Annual Bonus") equal to 100% of the Executive's Base
Salary for such fiscal year, if the Company achieves the target
performance goals established by the Compensation Committee (the
"Committee") for such fiscal year. The
Committee may establish such metrics whereby the Executive may earn
an
Annual Bonus in excess of the target Annual Bonus or an Annual Bonus
less
than the target Annual Bonus.
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(ii)
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Any
Annual Bonus that becomes payable to the Executive pursuant to this
Section shall be paid to the Executive as soon as reasonably practicable
following receipt by the Board of the audited consolidated financial
statements of the Company for the relevant fiscal year, but in no
event
later than two and a half (2 ½) months following the end of the applicable
fiscal year in which such Annual Bonus was earned. The Executive
shall be entitled to receive any Annual Bonus that becomes payable
in a
lump sum cash payment, or, at his election, in any form that the
Board
generally makes available to the Company's executive management team;
provided that any such election is made by the Executive in compliance
with Section 409A ("Section 409A") of the Internal
Revenue Code of 1986, as amended (the "Code") and the
regulations promulgated thereunder.
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(c)
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Long-Term
Incentive Awards. During the Period of Employment, the
Executive shall be eligible for long term incentive awards as determined
by the Committee in its discretion.
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(d)
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Additional
Benefits. The Executive shall be entitled to participate in all
other compensation and employee benefit plans or programs and receive
all
benefits and perquisites for which salaried employees of the Company
generally are eligible under any plan or program now in effect, or
later
established by the Company, on a basis no less favorable than as
provided
to any other similarly situated executive of the Company. The Executive
shall participate to the extent permissible under the terms and provisions
of such plans or programs, and in accordance with the terms of such
plans
and programs.
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SECTION
V
BUSINESS
EXPENSES
The
Company shall reimburse the Executive for all reasonable travel and other
expenses incurred by the Executive in connection with the performance of his
duties and obligations under this Agreement. The Executive shall comply with
such limitations and reporting requirements with respect to expenses as may
be
established by the Company from time to time and shall promptly provide all
appropriate and requested documentation in connection with such expenses.
Further, the Executive will receive access to Company aircraft or alternative
air transportation, subject to applicable Company policies.
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SECTION
VI
DEATH
AND DISABILITY
The
Period of Employment shall end upon the Executive's death. If the Executive
experiences a Disability (as defined below) during the Period of Employment,
the
Period of Employment may be terminated at the option of the Executive upon
notice of resignation to the Company, or at the option of the Company upon
notice of termination to the Executive. For purposes of this Agreement,
"Disability" shall have the meaning set forth in Section 409A. The Company's
obligation to make payments to the Executive under this Agreement shall cease
as
of such date of termination, except for Base Salary and any Annual Bonus earned
but unpaid as of the date of such termination (the "Accrued
Obligations"), and, in such event (a) each of the Executive's then
outstanding options to purchase shares of Company common stock that were granted
prior to July 28, 2006 and options to purchase shares of Wyndham Worldwide
Corporation common stock (and its successors) (the "Pre-Existing
Options") shall become immediately and fully vested and exercisable (to
the extent not already vested) and, shall remain exercisable during the extended
post-termination exercise period set forth in the employment agreement entered
into between Cendant Corporation and the Executive on August 1, 2003 (the
"2003 Agreement"), (b) each option to purchase shares of the
Company common stock or stock appreciation right granted on or after July 28th
2006 shall become immediately and fully vested and exercisable (to the extent
not already vested) and, notwithstanding any term or provision relating to
such
option to the contrary, shall remain exercisable until the first to occur of
the
third (3rd) anniversary of the Executive's termination of employment and the
original expiration date of such option or stock appreciation rights, (c) all
other long-term equity awards then outstanding shall become immediately vested,
and (d) the Company shall pay the Executive (or his surviving spouse, estate
or
personal representative, as applicable) a cash amount equal to the Executive's
target Annual Bonus for the year in which the Executive is terminated multiplied
by a fraction the numerator of which is the total number of days during the
applicable calendar year during which the Executive was employed by the Company
and the denominator of which is 365. Upon the Executive's termination
due to death or Disability, the Executive and each person who is his covered
dependent at such time under the Company sponsored health and dental plan shall
remain eligible to continue to participate in such plans (as they may be
modified from time to time with respect to all senior executive officers) until
the 2nd anniversary of such termination of employment (such benefits, the
"Continuation of Health Benefits"). The Executive also retains
the right to participate in the Avis, Inc. Retiree Health Care Plan per the
1992
Avis Board of Director's resolution.
SECTION
VII
EFFECT
OF TERMINATION OF EMPLOYMENT
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(a)
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Without
Cause Termination; Constructive Discharge. Subject to the
provisions of Section VII(e), if the Executive's employment terminates
during the Period of Employment, due to either a Without Cause Termination
or a Constructive Discharge (each as defined below): (i) the Accrued
Obligations shall be paid to the Executive in accordance with paragraph
(e) below, (ii) the Company shall pay the Executive (or his surviving
spouse, estate or personal representative, as applicable), within
fifteen
(15) days following the Release Date (as defined in paragraph (e)
below),
an amount equal to 299% multiplied by the sum of (A) the Executive's
then
current Base Salary, plus (B) the Executive's then current target
Annual
Bonus; (iii) each of the Executive's then outstanding Pre-Existing
Options
shall become immediately and fully vested and exercisable (to the
extent
not already vested) in accordance with the terms and conditions applicable
to such options set forth in the 2003 Agreement, and shall remain
exercisable for the extended post-termination exercise period set
forth in
the 2003 Agreement, (iv) each option to purchase shares of the Company
common stock or stock appreciation right granted on or after July
28, 2006
(excluding any Pre-Existing Option to acquire the Company common
stock)
shall become immediately and fully vested and exercisable (to the
extent
not already vested) and, notwithstanding any term or provision thereof
to
the contrary, shall remain exercisable until the first to occur of
the
third (3rd) anniversary of the Executive's termination of employment
and
the original expiration date of such option or stock appreciation
right,
and (v) all other long-term equity awards (including, without limitation,
restricted stock units) shall become immediately vested. Upon
such termination, the Executive shall also be entitled to the Continuation
of Health Benefits and also be entitled to the Avis, Inc. Retiree
Health
Care Plan per the 1992 Avis Board of Director's
resolution.
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(b)
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End
of Period of Employment. If the Executive's employment has not been
earlier terminated in accordance with the provisions of this Agreement,
effective January 1, 2012, the Executive's employment shall terminate
and,
subject to the provisions of Section VII(e), (i) the Accrued Obligations
shall be paid to the Executive in accordance with paragraph (e) below;
(ii) each of the Executive's then outstanding Pre-Existing Options
shall
become immediately and fully vested and exercisable (to the extent
not
already vested) in accordance with the terms and conditions applicable
to
such options set forth in the 2003 Agreement, and shall remain exercisable
for the extended post-termination exercise period set forth in the
2003
Agreement, (iii) each option to purchase shares of the Company common
stock or stock appreciation right granted on or after July 28, 2006
(excluding any Pre-Existing Option to acquire the Company common
stock)
shall become immediately and fully vested and exercisable (to the
extent
not already vested) and, notwithstanding any term or provision thereof
to
the contrary, shall remain exercisable until the first to occur of
the
third (3rd) anniversary of the Executive's termination of employment
and
the original expiration date of such option or stock appreciation
right,
(iv) all other long-term equity awards that vest based on continued
service alone (including, without limitation, restricted stock units)
shall become immediately vested; and (v) with respect to all other
long-term equity awards (including, without limitation, restricted
stock
units) that vest based on the achievement of performance criteria,
a
number of shares subject to such awards shall vest equal to the total
number of shares subject to the award multiplied by a fraction the
numerator of which is the total number of days during the applicable
performance period during which the Executive was employed by the
Company
and the denominator of which is the total number of days in the
performance period. Upon such termination, the Executive shall
also be entitled to the Continuation of Health Benefits and also
be
entitled to the Avis, Inc. Retiree Health Care Plan per the 1992
Avis
Board of Director's resolution.
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(c)
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Termination
for Cause; Resignation. If the Executive's employment terminates
due to a
Termination for Cause or a Resignation, the Accrued Obligations shall
be
paid to the Executive in accordance with paragraph (e) below. Outstanding
stock options and other equity awards held by the Executive as of
the date
of termination shall be treated in accordance with their terms. Except
as
provided in this paragraph, the Company shall have no further obligations
to the Executive hereunder.
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(d)
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For
purposes of this Agreement, the following terms have the following
meanings:
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(i)
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"Termination
for Cause" means termination by the Company of
the Executive as a result of (a) the Executive's willful failure
to
substantially perform his duties as an employee of the Company or
any
subsidiary (other than any such failure resulting from incapacity
due to
physical or mental illness), (b) any act of fraud, misappropriation,
dishonesty, embezzlement or similar conduct against the Company or
any
subsidiary, (c) the Executive's conviction of a felony or any crime
involving moral turpitude (which conviction, due to the passage of
time or
otherwise, is not subject to further appeal), (d) the Executive's
gross
negligence in the performance of his duties or (e) the Executive
purposefully or negligently makes (or has been found to have made)
a false
certification to the Company pertaining to its financial
statements.
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(ii)
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"Constructive
Discharge" means (a) any material failure of the Company to
fulfill its obligations under this Agreement (including without limitation
any material reduction of the Base Salary, as the same may be increased
during the Period of Employment, or any material reduction in any
other
material element of compensation) or any material diminution to the
Executive's duties and responsibilities relating to service as an
executive officer, including if the Executive was immediately prior
to a
Corporate Transaction an executive officer of a public company, the
Executive ceasing to be an executive officer of a public company,
provided, however, that the change in Executive's position as provided
for
in Section II shall not constitute such a material diminution to the
Executive's duties and responsibilities, (b) prior to the Transition
Date,
the Business Office is relocated to any location that increases the
Executive's one-way commute by more than 30 miles, provided that such
relocation constitutes a material negative change to the Executive's
employment relationship, (c) the Executive is not nominated to be
a member
of the Board, or (d) failure of a successor to the Company to assume
this
Agreement in accordance with Section XIV below. The Executive shall
provide the Company a written notice of his intention to terminate
employment pursuant to a Constructive Discharge within 60 days after
the
Executive knows or has reason to know of the occurrence of any such
event
which notice describes the circumstances being relied on for the
termination with respect to this Agreement. Notwithstanding the above,
the
Company shall have thirty (30) days after receipt of such notice
to remedy
the event prior to the termination for Constructive Discharge and,
upon
the timely remedy of such event, such event shall no longer constitute
a
basis for Constructive Discharge and the Executive's notice of
termination pursuant to a Constructive Discharge shall be
rescinded.
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(iii)
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"Without
Cause Termination" or "Terminated
Without Cause" means termination of the Executive's employment by
the Company other than due to death, Disability, or Termination for
Cause.
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(iv)
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"Resignation"
means a termination of the Executive's employment by the Executive,
other
than in connection with a Constructive Discharge or other than due
to
death or Disability.
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(v)
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"Corporate
Transaction" means either:
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(1)
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any
"person," as such term is used in Sections 13(d) and 14(d) of the
Securities and Exchange Act, as amended (the "Exchange Act") (other
than
(A) the Company, (B) any trustee or other fiduciary holding securities
under an employee benefit plan of the Company, and (C) any corporation
owned, directly or indirectly, by the stockholders of the Company
in
substantially the same proportions as their ownership of Company
common
stock), is or becomes the "beneficial owner" (as defined in Rule
13d-3
under the Exchange Act), directly or indirectly, of securities of
the
Company representing 50% or more of the combined voting power of
the
Company's then outstanding voting securities (excluding any person
who
becomes such a beneficial owner in connection with a transaction
immediately following which the individuals who comprise the Board
immediately prior thereto constitute at least a majority of the Board
of
the entity surviving such transaction or, if the Company or the entity
surviving the transaction is then a subsidiary, the ultimate parent
thereof); or
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(2)
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the
following individuals cease for any reason to constitute a majority
of the
number of directors then serving: individuals who, on the Effective
Date,
constitute the Board and any new director (other than a director
whose
initial assumption of office is in connection with an actual or threatened
election contest, including but not limited to a consent solicitation,
relating to the election of directors of the Company) whose appointment
or
election by the Board or nomination for election by the Company's
stockholders was approved or recommended by a vote of at least one-half
(1/2) of the directors then still in office who either were directors
on
the Effective Date or whose appointment, election or nomination for
election was previously so approved or
recommended.
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(e)
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Conditions
to Payment and Acceleration; Section 409A.
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(i)
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Notwithstanding
anything contained herein to the contrary, to the extent required
in order
to avoid accelerated taxation and/or tax penalties under Section
409A, the
Executive shall not be considered to have terminated employment with
the
Company for purposes of this Agreement and no payments shall be due
to the
Executive under Section VII of this Agreement until the Executive
would be
considered to have incurred a "separation from service" from the
Company
within the meaning of Section 409A.
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(ii)
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All
payments due to the Executive under this Section VII shall be subject
to,
and contingent upon, the Executive (or his beneficiary or estate)
(x)
executing a release of claims against the Company and its affiliates
(in
such reasonable form determined by the Company in its sole discretion)
within forty-five days following the Executive's separation from
service
(or, in the event of a dispute, upon resolution of the dispute, provided
that such extension does not result in, as applicable, the disputed
payments constituting deferred compensation within the meaning of
Section
409A or the imposition of additional taxes under Section 409A) and
(y)
failing to revoke such release (the date on which such release becomes
non-revocable, the "Release
Date").
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(iii)
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To
the extent required in order to avoid accelerated taxation and/or
tax
penalties under Section 409A, amounts that would otherwise be payable
and
benefits that would otherwise be provided pursuant to this Agreement
during the six-month period immediately following the Executive's
termination of employment shall instead be paid on the first business
day
after the date that is six (6) months following the Executive's
termination of employment (or upon the Executive's death, if
earlier).
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(iv)
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The
intent of the Parties is that payments and benefits under this Agreement
comply with Section 409A and, accordingly, to the maximum extent
permitted, this Agreement shall be interpreted and administered to
be in
compliance therewith. Each amount to be paid or benefit to be provided
under this Agreement shall be construed as a separate identified
payment
for purposes of Section 409A and any payments described in this Agreement
that are due within the "short term deferral period" as defined in
Section
409A shall not be treated as deferred compensation unless applicable
law
requires otherwise.
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(v)
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The
payments due to the Executive under this Section VII shall be in
lieu of
any other severance benefits otherwise payable to the Executive under
any
severance plan of the Company or its
affiliates.
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SECTION
VIII
OTHER
DUTIES OF THE EXECUTIVE
DURING
AND AFTER THE PERIOD OF EMPLOYMENT
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(a)
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The
Executive shall, with reasonable notice during or after the Period
of
Employment, furnish information as may be in his possession and fully
cooperate with the Company and its affiliates as may be requested
in
connection with any claims or legal action in which the Company or
any of
its affiliates is or may become a party. After the Period of Employment,
the Executive shall cooperate as reasonably requested with the Company
and
its affiliates in connection with any claims or legal actions in
which the
Company or any of its affiliates is or may become a party. The Company
agrees to reimburse the Executive for any reasonable out-of-pocket
expenses incurred by Executive by reason of such cooperation, including
any loss of salary, and the Company shall make reasonable efforts
to
minimize interruption of the Executive's life in connection with
his
cooperation in such matters as provided for in this
paragraph.
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(b)
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The
Executive recognizes and acknowledges that all information pertaining
to
this Agreement or to the affairs; business; results of operations;
accounting methods, practices and procedures; members; acquisition
candidates; financial condition; clients; customers or other relationships
of the Company or any of its affiliates ("Information")
is confidential and is a unique and valuable asset of the Company
or any
of its affiliates. Access to and knowledge of certain of the Information
is essential to the performance of the Executive's duties under this
Agreement. The Executive shall not during the Period of Employment
or
thereafter, except to the extent reasonably necessary in performance
of
his duties under this Agreement, give to any person, firm, association,
corporation, or governmental agency any Information, except as may
be
required by law. The Executive shall not make use of the Information
for
his own purposes or for the benefit of any person or organization
other
than the Company or any of its affiliates. The Executive shall also
use
his best efforts to prevent the disclosure of this Information by
others.
All records, memoranda, etc. relating to the business of the Company
or
its affiliates, whether made by the Executive or otherwise coming
into his
possession, are confidential and shall remain the property of the
Company
or its affiliates.
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(c)
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(i)
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During
the Period of Employment and for a period following any termination
of employment that shall end on the two (2) year anniversary of
such termination (the "Restricted Period"), the Executive
shall not use his status with the Company or any of its affiliates
to
obtain loans, goods or services from another organization on terms
that
would not be available to him in the absence of his relationship
to the
Company or any of its affiliates.
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(ii)
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During
the Restricted Period, the Executive shall not make any statements
or
perform any acts intended to have the effect of advancing the interest
of
any existing competitors (or any entity the Executive knows to be
a
prospective competitor) of the Company or any of its affiliates or
in any
way injuring the interests of the Company or any of its affiliates.
During
the Restricted Period, the Executive, without prior express written
approval by the Board, shall not engage in, or directly or indirectly
(whether for compensation or otherwise) own or hold proprietary interest
in, manage, operate, or control, or join or participate in the ownership,
management, operation or control of, or furnish any capital to or
be
connected in any manner with, any party which competes in any way
or
manner with the business of the Company or any of its affiliates,
as such
business or businesses may be conducted from time to time, either
as a
general or limited partner, proprietor, common or preferred
shareholder (other than being less than a 5% shareholder in a
publicly traded company), officer, director, agent, employee, consultant,
trustee, affiliate, or otherwise. The Executive acknowledges that
the
Company's and its affiliates' businesses are conducted nationally
and
internationally and agrees that the provisions in the foregoing sentence
shall operate throughout the United States and those countries in
the
world where the Company then conducts business or has a plan to conduct
business.
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(iii)
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During
the Restricted Period, the Executive, without express prior written
approval from the Board, shall not solicit any members or the then-current
clients of the Company or any of its affiliates for any existing
business
of the Company or any of its affiliates or discuss with any employee
of
the Company or any of its affiliates information or operation of
any
business intended to compete with the Company or any of its
affiliates.
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(iv)
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During
the Restricted Period, the Executive shall not interfere with the
employees or affairs of the Company or any of its affiliates or solicit
or
induce any person who is an employee of the Company or any of its
affiliates to terminate any relationship such person may have with
the
Company or any of its affiliates, nor shall the Executive during
such
period directly or indirectly engage, employ or compensate, or cause
any
person with which the Executive may be affiliated, to engage, employ
or
compensate, any employee of the Company or any of its affiliates.
The
Executive hereby represents and warrants that the Executive has not
entered into any agreement, understanding or arrangement with any
employee
of the Company or any of its affiliates pertaining to any business
in
which the Executive has participated or plans to participate, or
to the
employment, engagement or compensation of any such
employee.
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(v)
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For
the purposes of this Agreement, proprietary interest means legal
or
equitable ownership, whether through stock holding or otherwise,
of an
equity interest in a business, firm or entity or ownership of more
than 5%
of any class of equity interest in a publicly-held company and the
term
"affiliate" shall include without limitation all subsidiaries and
material
licensees of the Company.
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(d)
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The
Executive hereby acknowledges that damages at law may be an insufficient
remedy to the Company if the Executive violates the terms of this
Agreement and that the Company shall be entitled, upon making the
requisite showing, to preliminary and/or permanent injunctive relief
in
any court of competent jurisdiction to restrain the breach of or
otherwise
to specifically enforce any of the covenants contained in this Section
VIII without the necessity of showing any actual damage or that monetary
damages would not provide an adequate remedy. Such right to an injunction
shall be in addition to, and not in limitation of, any other rights
or
remedies the Company may have. Without limiting the generality of
the
foregoing, neither party shall oppose any motion the other party
may make
for any expedited discovery or hearing in connection with any alleged
breach of this Section VIII.
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(e)
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The
period of time during which the provisions of this Section VIII shall
be
in effect shall be extended by the length of time during which the
Executive is in breach of the terms hereof as determined by any court
of
competent jurisdiction on the Company's application for injunctive
relief.
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(f)
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The
Executive agrees that the restrictions contained in this Section
VIII are
an essential element of the compensation the Executive is granted
hereunder and but for the Executive's agreement to comply with such
restrictions, the Company would not have entered into this
Agreement.
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SECTION
IX
INDEMNIFICATION
The
Company shall indemnify the Executive to the fullest extent permitted by the
laws of the state of the Company's incorporation in effect at that time, or
the
certificate of incorporation and by-laws of the Company, whichever affords
the
greater protection to the Executive (including payment of expenses in advance
of
final disposition of a proceeding).
SECTION
X
CERTAIN
TAXES
Anything
in this Agreement or in any other plan, program or agreement to the contrary
notwithstanding and except as set forth below, in the event that (i) the
Executive becomes entitled to any benefits or payments under Section VII hereof
and (ii) it shall be determined that any payment or distribution by the Company
to or for the benefit of the Executive (whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section
X) (a "Payment") would be subject to the excise tax imposed by
Section 4999 of the Code, or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive
an additional payment (a "Gross-Up Payment") in an amount such
that after payment by the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments. Notwithstanding the foregoing provisions of this Section X, if it
shall be determined that the Executive is entitled to a Gross-Up Payment, but
that the Payments do not exceed 110% of the greatest amount (the
"Reduced Amount") that could be paid to the Executive such that
the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up
Payment shall be made to the Executive and the Payments, in the aggregate,
shall
be reduced to the Reduced Amount, provided, however, that the payments or
benefits to be eliminated in effecting such reduction shall be agreed upon
between the Company and the Executive. All determinations required to be made
under this Section X, including whether and when a Gross-Up Payment is required
and the amount of such Gross-Up Payment and the assumptions to be utilized
in
arriving at such determination, shall be made by Deloitte & Touche LLP or
such other certified public accounting firm as may be designated by the
Company. In no event will the Gross-Up Payment be made later than
forty-five (45) days following the date on which the Executive remits the Excise
Tax to the Internal Revenue Service.
11
SECTION
XI
MITIGATION
The
Executive shall not be required to mitigate the amount of any payment provided
for hereunder by seeking other employment or otherwise, nor shall the amount
of
any such payment be reduced by any compensation earned by the Executive as
the
result of employment by another employer after the date the Executive's
employment hereunder terminates.
SECTION
XII
WITHHOLDING
TAXES
The
Executive acknowledges and agrees that the Company may directly or indirectly
withhold from any payments under this Agreement all federal, state, city or
other taxes that shall be required pursuant to any law or governmental
regulation.
SECTION
XIII
EFFECT
OF PRIOR AGREEMENTS
Except
as
otherwise specifically set forth herein, this Agreement shall supersede any
prior agreements between the Company and the Executive (including but not
limited to the 2003 and 2006 Agreements) hereof, and any such prior agreement
shall be deemed terminated without any remaining obligations of either party
thereunder.
SECTION
XIV
CONSOLIDATION,
MERGER OR SALE OF ASSETS
Nothing
in this Agreement shall preclude the Company from consolidating or merging
into
or with, or transferring all or substantially all of its assets to, another
corporation or other entity which assumes this Agreement and all obligations
and
undertakings of the Company hereunder. If (i) there is a merger, consolidation,
sale of all or substantially all of the Company's assets, or other business
combination involving the Company, or (ii) all or substantially all of the
stock
of the Company is acquired by another company, the term "the Company" shall
mean
the successor to the Company's business or assets referred to in (i) above
or
such company referred to in (ii) above, and this Agreement shall continue in
full force and effect. Notwithstanding the foregoing, the Company shall require
any successor thereto (whether direct or indirect, by purchase, merger,
consolidation, or otherwise), by agreement in form and substance reasonably
satisfactory to the Executive to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would
be
required to perform it if no such succession had taken place.
12
SECTION
XV
MODIFICATION
This
Agreement may not be modified or amended except in writing signed by the
parties. No term or condition of this Agreement shall be deemed to have been
waived except in writing by the party charged with waiver. A waiver shall
operate only as to the specific term or condition waived and shall not
constitute a waiver for the future or act on anything other than that which
is
specifically waived.
SECTION
XVI
GOVERNING
LAW
This
Agreement has been executed and delivered in the State of New Jersey and its
validity, interpretation, performance and enforcement shall be governed by
the
internal laws of that state.
SECTION
XVII
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 VIII 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) days after the giving of such notice
may
be submitted to arbitration in New York, New York, 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) days, either party, upon ten (10) 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.
|
13
|
(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 XVII has been included to rapidly
and
inexpensively resolve any disputes between them with respect to this
Agreement, and that this Section XVII 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.
|
SECTION
XVIII
SURVIVAL
Sections
VIII, IX, X, XI, XII and XIII shall continue in full force in accordance with
their respective terms notwithstanding any termination of the Period of
Employment.
SECTION
XIX
SEPARABILITY
All
provisions of this Agreement are intended to be severable. In the event any
provision or restriction contained herein is held to be invalid or unenforceable
in any respect, in whole or in part, such finding shall in no way affect the
validity or enforceability of any other provision of this Agreement. The parties
hereto further agree that any such invalid or unenforceable provision shall
be
deemed modified so that it shall be enforced to the greatest extent permissible
under law, and to the extent that any court of competent jurisdiction determines
any restriction herein to be unreasonable in any respect, such court may limit
this Agreement to render it reasonable in the light of the circumstances in
which it was entered into and specifically enforce this Agreement as
limited.
*****
14
IN
WITNESS WHEREOF, the undersigned
have executed this Agreement as of the Effective Date.
/s/
Xxxx Xxxxxxxxxx
By:
Xxxx
Xxxxxxxxxx
Title: Executive
Vice
President, Human Resources
/s/ F.
Xxxxxx Xxxxxxx
F.
Xxxxxx
Xxxxxxx
Each
of
the undersigned subsidiaries of the Company hereby guarantees to the Executive
the prompt and complete payment and performance by the Company when due of
the
Company’s obligations to make payments due to the Executive that are delayed in
accordance with Section VII(e)(iii) in consideration for the services the
Executive renders to such subsidiary in his role as President and Chief
Operating Officer of Avis Budget Group, Inc.; provided that, as to any
subsidiary, this guarantee shall be null and void and have no effect whatsoever
with respect to such subsidiary for any period (including as of the Effective
Date) during which this guarantee conflicts with or constitutes a breach of
any
obligation of such subsidiary under any currently applicable agreement or other
obligation applicable to such subsidiary or any applicable law, rule or
regulation (whether currently applicable or applicable at any time in the
future).
IN
WITNESS WHEREOF, the undersigned have executed this Guarantee as of the
Effective Date.
AVIS
BUDGET CAR RENTAL,
LLC
AVIS
BUDGET HOLDINGS, LLC
AVIS
BUDGET FINANCE, INC.
AVIS
CAR RENTAL GROUP,
LLC
ARACS
LLC
AVIS
RENT A CAR SYSTEM,
LLC
AVIS
ASIA AND PACIFIC,
LIMITED
AVIS
CARIBBEAN, LIMITED
AVIS
ENTERPRISES, INC.
AVIS
GROUP HOLDINGS, LLC
AVIS
INTERNATIONAL, LTD.
PF
CLAIMS MANAGEMENT, LTD
AB
CAR RENTAL SERVICES,
INC.
AVIS
OPERATIONS, LLC
BGI
LEASING, INC.
RUNABOUT,
LLC
WIZARD
SERVICES, INC.
/s/
Xxxx Xxxxxxxxxx
By:
Xxxx
Xxxxxxxxxx
Title: Executive
Vice
President, Human Resources
BUDGET
RENT A CAR SYSTEM,
INC.
BUDGET
TRUCK RENTAL, LLC
PR
HOLDCO, INC.
/s/ Xxxxxx
Xxxxxxxxx
By:
Xxxxxx
Xxxxxxxxx
Title: Senior
Vice
President, Human Resources
15
