AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement") made this 9th
day of February, 1996, by and between Avis, Inc. ("Avis"), a Delaware
corporation with its principal office at 000 Xxx Xxxxxxx Xxxx, Xxxxxx Xxxx, Xxx
Xxxx 00000, and F. Xxxxxx Xxxxxxx, residing at
(hereinafter called the "Executive").
WITNESSETH:
WHEREAS, Avis and Executive are parties to that certain employment
agreement dated September 21, 1987, and Avis and Executive desire to amend and
restate such employment agreement (the "Old Employment Agreement");
WHEREAS, Avis desires to continue to employ and secure the services of
Executive upon the terms and conditions specified herein and to provide
incentive and security to Executive in the event of a Change of Control at AVIS
as that term is hereinafter defined; and
WHEREAS, Executive desires to continue to be employed by Avis upon the
terms and conditions specified herein giving due deference to the protections
to be accorded Executive and Avis' rights to Executive's continued loyal and
efficient service.
NOW, THEREFORE, in consideration of such employment, the timely
performance of the obligations herein set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto, intending to be legally bound, hereby agree to amend and
restate the Old Employment Agreement as follows:
I. EMPLOYMENT DUTIES AND TERM
A. Employment. Avis shall continue to employ Executive in the
position of Executive Vice President, Operations. Executive hereby accepts such
employment and agrees to discharge the responsibilities of said office, or any
other executive office as determined by the Board of Directors of Avis,
faithfully and to the best of his
ability and perform such duties and services of an executive, administrative
and managerial nature as shall be specified and designated from time to time by
the Board of Directors of Avis or by its Chairman in connection with the
business and activities of Avis and consistent with Executive's position. Avis
agrees only to impose such duties and to demand such services as are reasonable
and consistent with good and ethical business practices.
B. Term. Executive's employment shall be for a period of five (5)
years commencing on February 9, 1996 ("Commencement Date") and ending on the
fifth anniversary of the day preceding the Commencement Date (the "Term of the
Agreement"). It shall renew automatically from year to year thereafter, unless
notice, in the manner herein required, is given either by Executive to Avis or
by Avis to Executive at least six (6) months before the end of the term then in
effect advising that such employment shall cease as of the end of such term
(the "Extended Employment Period").
C. Acceptance of Employment. Executive agrees that during the Term of
the Agreement and any Extended Employment Period he will devote substantially
all his time and effort to the performance of his duties hereunder and will not
engage in any other employment activities for any direct or indirect
remuneration without the prior written consent of Avis by its Chairman.
II. COMPENSATION
Avis agrees to pay to Executive and Executive agrees to accept the
following amounts and benefits as compensation for his services hereunder and
for the performance of other duties assigned to him by the Board of Directors
of Avis or its Chairman.
A. Base Salary. Commencing February 9, 1996, Avis shall pay Executive
a base salary at the rate of $232,000 per annum, payable in equal biweekly
installments. This base salary may be increased from time to time by order of
the Board of Directors, but in no event shall such base salary be less than the
amount provided for on the Commencement Date, or such greater amount as is set
for Executive's base salary by the Board of Directors during the Term of the
Agreement or during any Extended Employment Period.
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B. Management Incentive Plan. Pursuant to and in accordance with the
Avis, Inc. Management Incentive Plan (the "Plan") as it presently exists or is
subsequently modified, Avis shall pay Executive an annual bonus within sixty
(60) days of the close of Avis' fiscal year. Executive's entitlement to such
annual bonus shall be calculated under the Plan based upon his applicable
percentage of "Standard Incentive" that is in effect under the Plan from time
to time during the Term of the Agreement or during any Extended Employment
Period, regardless of what executive office he may hold, or which duties or
services he may be assigned by the Board of Directors or its Chairman. The
Executive's percentage of "Standard Incentive" that is in effect at any time
during the Term of the Agreement or any Extended Employment Period may be
increased or decreased from time to time by order of the Board of Directors;
provided that such increases or decreases shall not be made with respect to
Executive in a manner (i) which differentiates Executive from other members in
his numerical category/rank under the Plan and/or (ii) which increases or
decreases his numerical category/rank under the Plan in relation to the
numerical categories/ranks above and below Executive's then numerical
category/rank under the Plan. For purposes of this Agreement, as of the date
hereof, "Standard Incentive" shall be defined as 70% of maximum incentive
(including both the percentage of target incentive for individual goal and the
percentage of target incentive for the Avis corporate goal) under the Plan.
Whenever the amount of the annual bonus to which Executive is entitled
hereunder is to be determined because of Executive's participation in the Plan
for less than an entire Plan year, the amount of pro rated annual bonus to be
paid to Executive under the Plan shall be a percentage of the annual bonus that
he would have received had he worked for Avis for the entire Plan year, which
percentage shall be calculated as the part of the Plan year in which he did
work, divided by the entire Plan year ("Pro Rated Share").
C. Perquisites. In order that Executive may continue to properly
promote and develop business and business opportunities of Xxxx, Xxxx shall
provide Executive with a membership and pay all annual dues in a Country Club
and other clubs to which Executive belongs as of the date hereof. Avis shall
pay all reasonable charges incurred by Executive relating to entertainment of
business
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guests in connection with and related to Avis' business and business
opportunities. Executive shall also be furnished with (i) two high-line
American luxury automobiles at no cost to Executive and (ii) up to two
additional high-line American luxury automobiles under Avis' Executive
Automobile Leasing Program.
D. Other Compensation; Employee Benefits; Expense Reimbursement;
Status as an "Employee". Avis agrees that the benefits provided to Executive
herein are not in lieu of any rights or privileges to which Executive may be
entitled as an employee of Avis under any retirement, pension, stock option,
insurance, hospitalization, vacation, or other plan which may now or hereafter
be in effect, it being agreed and understood that Executive shall have the same
rights and privileges to participate in such plans or benefits to the same
extent and upon similar terms as any other senior executive of Avis is afforded
participation. Avis agrees that Executive's coverage by and participation in
the plans covered in this Article shall remain in full force and effect for any
and all periods of time for which Executive receives any compensation under any
of the terms of this Agreement. Nothing in this Agreement shall in any way
modify (i) such statutory rights as Executive may have in connection with his
right to elect continuation of his coverage under Avis' group health and
hospitalization insurance plans pursuant to COBRA or his derivative rights to
convert his coverage under Avis' life insurance and disability insurance
policies or any other insurance policies in which Executive participates and as
to which no right or continuation of coverage is granted pursuant to any state
or federal law and (ii) Executive's and his spouse's rights to participate
under the Avis, Inc. Comprehensive Health Care Plan in accordance with the
resolutions duly adopted by the Avis Board of Directors on April 7, 1992 (the
"Health Care Plan") upon Executive's retirement from Avis, all in accordance
with the Health Care Plan's terms as such rights of participation are more
fully set forth in the Health Care Plan's terms and in the resolutions adopted
by the Avis Board of Directors on April 7, 1992. Executive's and his spouse's
rights to participate in the Health Care Plan as in effect on the date hereof,
and as it may be amended by Avis for general application, shall continue
regardless of any amendment to or termination of the Health Care Plan, the
effect of which amendment or termination would
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operate to the detriment of Executive, his spouse and their rights thereunder.
Avis' agreement to so extend Executive's and his spouse's rights under the
Health Care Plan is in consideration for Executive's agreement to execute and
deliver this Agreement and shall survive the termination of this Agreement.
Executive shall be entitled to such number of paid vacation days as are
similarly situated executives entitled to in their employment arrangements with
similarly situated companies.
Executive is authorized to incur necessary and reasonable expenses in
connection with the performance of Executive's duties hereunder, including
expenses for business meals, travel, lodging and similar or related items of
expense. Avis shall reimburse Executive for all such expenses, upon
presentation, from time to time, of proper vouchers and receipts therefor,
consistent with Avis' internal policies and procedures approved by its
independent auditors governing reimbursement.
Avis hereby acknowledges and agrees that during the Term of the
Agreement and any Extended Employment Period, Executive shall be considered an
"employee" of Avis for vesting of benefits and all other purposes under Avis'
employee benefit plans, retirement plans, pension plans, stock option plans,
insurance plans, hospitalization plan, profit sharing plans, bonus plans or any
other similar plan of Avis which may now or hereafter be in effect.
III. TERMINATION OF EMPLOYMENT
A. Resignation with Good Reason. If during the Term of the Agreement
or any Extended Employment Period, Avis, (i) assigns Executive tasks, duties or
responsibilities (collectively, "Duties") that are or a position that is
inconsistent with his position as Executive Vice President, Operations, (ii)
reduces Executive's status or role from Executive's current position or reduces
Executive's Duties that are consistent with Executive's current position, or in
connection with both, any higher or more responsible position which may be
hereafter assigned by the Board of Directors to Executive at any time during
the Term of the Agreement or any Extended Employment Period, (iii) following a
"Change in Control" (as defined in Article VII below) relocates Executive's
primary or principal place of employment outside the
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continental United States, or (iv) materially reduces or eliminates Executive's
compensation, perquisites of office or employee benefits as are in effect from
time to time during the Term of the Agreement or any Extended Employment Period
(each a "Good Reason"), then Executive may resign and terminate his employment
hereunder. If Executive resigns with Good Reason, Executive shall receive the
benefits provided in Article III, Paragraph E of this Agreement, all in
accordance with the terms hereof.
B. Disability. If, during the Term of the Agreement or any Extended
Employment Period, Executive shall be unable to perform his duties hereunder
because of illness or other incapacity, and the period of such illness or other
incapacity shall total in excess of twelve (12) consecutive months, Avis shall
thereafter have the right on not less than forty-five (45) days advance written
notice to Executive, to terminate Executive's employment. In such event, Avis
shall pay Executive, as and when due, his full compensation provided for in
Paragraphs A, B and C of Article II hereof for a period of one (1) year
following the date of such termination. Avis may, at its election, purchase
insurance to cover its obligations under this Paragraph, and Executive agrees
to assist Avis in securing such insurance if so requested, but the
uninsurability of Executive, if such is the case, shall not relieve Avis of its
obligations hereunder.
C. Death. In the event Executive dies during the Term of the Agreement
or any Extended Employment Period, Executive's compensation pursuant to
Paragraphs A and B of Article II hereof shall cease as of the end of the month
in which death occurs. Avis however, shall continue for a period of twelve (12)
months following the month in which his death occurs to pay the amount of
compensation specified in Paragraphs A and B of Article II hereof to the
Personal Representative of Executive's estate as a death benefit. However, any
expenses previously incurred by Executive with respect to which Executive is
entitled to reimbursement hereunder shall either be paid by Avis directly or
reimbursed to Executive's estate.
D. Resignation Without Good Reason. In the event Executive
voluntarily terminates his employment without Good Reason during the Term of
the Agreement or any
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Extended Employment Period, he shall cease being compensated as of the date of
such termination of his employment, and Avis shall pay him, as and when due,
only his full compensation provided for in Paragraphs A and B of Article II
hereof up to the date of such termination.
E. Termination Without Just Cause. In the event the Avis Board of
Directors determines that Executive's employment should be terminated without
just cause (as just cause is defined in Paragraph G below) during the Term of
the Agreement or any Extended Employment Period, Avis shall continue to pay
Executive the base salary and benefits provided for in Paragraph A and C of
Article II hereof for the balance of the Term of the Agreement or of any
Extended Employment Period, or a period of twelve (12) months, whichever is
longer, and Executive shall be entitled to receive his full annual bonus under
Article II, Paragraph B in respect of the full Plan year during which such
termination occurs. Notwithstanding the preceding sentence, if such termination
occurs on or after a "Change of Control" (as defined in Article VII below), or
if Executive reasonably establishes that such termination occurred in
connection with a Change of Control but prior thereto, then Executive shall
receive a single lump sum payment, within thirty (30) days following such
termination, equal to (i) the total amount of base salary payable pursuant to
the preceding sentence, (ii) the value of the benefits to which Executive is
entitled pursuant to the preceding sentence, as determined in good faith by the
Board of Directors based upon those clubs to which Executive belongs, and those
automobiles which he is being provided, at the time of such termination and
(iii) the highest attainable annual bonus under Article II, Paragraph B in
respect of the full Plan year during which such termination occurs.
F. Termination With Just Cause. In the event that Avis terminates
Executive's employment for just cause, Executive shall cease being compensated
as of the date of termination of his employment. Avis, however, shall pay him,
as and when due, only his full compensation provided for in Paragraph A of
Article II hereof up to the date of such termination, it being agreed by Avis
and Executive that, for purposes of Paragraph B of Article II, in such
circumstances Executive will not be entitled to any Pro Rated Share of annual
bonus payment under the Plan for
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the Plan year in which the termination for just cause occurs.
G. "Just Cause". For purposes of this Agreement, "just cause" shall
mean only (i) deliberate dishonesty or conviction of a felony that is directly
injurious to Avis or to its business interests or willful misconduct in the
performance of Executive's duties (defined as the delib- erate disregard of
any express, written directives issued to Executive by the Avis Board of
Directors) or (ii) a willful and material breach of this Agreement by Execu-
tive prior to its termination.
IV. COVENANT NOT-TO-COMPETE; NON-SOLICITATION
A. Non-Compete. For a period of six (6) months after the termination
of Executive's employment by Avis for any reason other than the termination of
such employment without just cause by the Board of Directors, the resignation
of Executive with Good Reason, or the election of Avis not to renew this
Agreement upon its expiration pursuant to Article 1, Paragraph B of this
Agreement, Executive shall not, within the continental United States, either
directly or indirectly, engage or attempt to engage in any business or be
employed by or act in any capacity for any entity or association related to or
engaged in a similar business to that which Avis is then engaged. During the
Term of the Agreement or any extended Employment Period, Executive may make and
supervise investment in industries which are not directly competitive with the
business of Avis or with its affiliates or other ventures (where Executive is
not required to actually participate in the management thereof) or in stocks
bonds of commodities for his own account or that of his immediate family, or
both, so long as such activities do not unreasonably interfere with Executive's
duties hereunder.
B. Enforceability of Non-Compete. If the restriction set forth in
Paragraph A of this Article IV, or any part thereof, should, for any reason
whatsoever, be declared invalid by a court of competent jurisdiction, the
validity or enforceability of the remainder of such restriction shall not
thereby be adversely affected. Executive agrees that the foregoing territorial
and time limitations are reasonable and properly required for the adequate
protection of the business of Avis given the
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scope and distribution of Avis' services and that in the event that any such
territorial or time limitation is deemed to be unreasonable by a court of
competent jurisdiction, then Executive agrees and submits to the reduction of
either said territorial or time limitation to such an area or time period as
such court shall deem reasonable. In the event that Executive shall be in
violation of the aforementioned restrictive covenants, then the time limitation
thereof shall be extended for a period of time equal to the period of time
during which such breach or breaches occurred or are occurring.
V. CONFIDENTIAL INFORMATION
Executive agrees to receive and keep Confidential Information of Avis
in confidence, and not to disclose to others, assist others in the application
of, or use for his own gain, such information, or any part thereof, unless and
until it has become public knowledge or has come into the possession of such
other or others by legal means. Executive further agrees that, upon termination
of his employment with Avis, all documents, records, notebooks, and similar
repositories containing Confidential Information, including copies thereof,
then in Executive's possession, whether prepared by him or others, will be left
with Avis. For purposes of this Article V, "Confidential Information" means
information disclosed to Executive or known by Avis, not generally known in the
industry in which Avis is or may become engaged, about Avis' products,
processes, marketing and pricing strategies, customer lists, customer needs or
preferences, operating methods and techniques, policies, procedures and
services.
VI. SUCCESSORS AND ASSIGNS
This Agreement shall inure to the benefit of and be binding upon Avis,
its successors and assigns including, without limitation, any person,
partnership or corporation or other entity which may acquire in excess of fifty
percent (50%) of Avis' voting stock, or which may acquire all or substantially
all of Avis' assets and business, or with or into which Avis may be
consolidated or merged or with which Avis engages in a transaction which
resulted in a Change of Control (as defined in Article VII below). This
Agreement shall also inure to the benefit of and be
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binding on the Executive and the legal representatives of Executive and his
estate.
VII. CHANGE OF CONTROL DEFINITION
As used herein and unless the provisions hereof indicate otherwise,
"Change of Control" shall mean (i) the acquisition or beneficial ownership
(within the meaning of the Securities Exchange Act of 1934, as amended and the
regulations promulgated thereunder (the "Exchange Act")) by any person or group
(as such terms are defined in the Exchange Act), directly or indirectly, other
than in each case Avis' Employee Stock Ownership Plan Trust, in a single
transaction or a series of transactions, of 25% or more in combined voting
power or economic interest of the outstanding capital stock or equity
securities of Avis; (ii) in connection with the reorganization, merger or
consolidation of Avis if immediately following such event or transaction,
persons or entities who were stockholders of Avis immediately prior to such
event or transaction do not own more than seven- ty-five percent (75%) of the
combined voting power entitled to vote generally in the election of directors
(or similar governing body) of the resulting reorganized, merged or
consolidated entity, in substantially the same proportion as immediately prior
to such event or transaction, (iii) the direct or indirect sale, disposition or
transfer (through sale, merger, consolidation or otherwise) to such person or
group of all or substantially all of the assets or earning power of Avis or of
Avis and its subsidiaries (taken as a whole) in a single transaction or a
series of transactions; or (iv) the stockholders of Avis approving a plan of
complete liquidation of Avis.
VIII. ENTIRE AGREEMENT
This Agreement contains the entire agreement of the parties hereto
with respect to the employment of Executive by Avis, and completely supersedes
and replaces any prior employment agreement or arrangement between the parties
hereto. This Agreement cannot be hereafter amended, modified or supplemented in
any respect, except by a subsequent written agreement signed by both parties
hereto.
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IX. APPLICABLE LAW
This Agreement shall be governed in all respects by the laws of the
State of New York without regard to its principles of conflicts of laws.
X. NOTICES
All notices under this Agreement shall be in writing, and will be duly
given if sent by registered or certified U.S. mail to the respective parties at
the addresses shown hereinabove. Either party may change its address by written
notice to the other.
XI. BREACH; ARBITRATION; ENFORCEMENT COSTS
A. The covenants embodied in Articles IV and V of this Agreement shall
be construed as agreements which are independent of other provisions of this
Agreement and all other agreements between the parties hereto. The existence of
any claim or cause of action by (i) Executive against Avis, whether arising out
of or related to this Agreement or any other agreement, shall not constitute a
defense or offset to the enforcement, by Avis, of the covenants contained in
Articles IV and V of this Agreement or under any other agreement among Avis and
Executive and (ii) by Avis against Executive, whether arising out of or related
to this Agreement or any other agreement, shall not constitute a defense or
offset to the enforcement, by Executive, of any of rights under any other
agreement between Executive and Avis.
B. Any dispute, claim or controversy which arises at any time
concerning the meaning, application or interpretation of this Agreement shall
be submitted to final and binding arbitration pursuant to the then effective
rules of the American Arbitration Association, Labor Tribunal, venued in the
City of New York, State of New York. Any award resulting from such arbitration
may be enforced by any Court of competent jurisdiction. Prehearing discovery
shall be subject to the discretion of the arbitrator appointed to hear a
particular claim.
X. Xxxx shall pay, as incurred, all legal and professional fees and
expenses which Executive may reason-
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ably incur as a result of Executive's good faith actions in enforcing any
provision of this Agreement, provided that at least one issue is resolved to
the benefit of Executive by way of litigation, arbitration, settlement or
otherwise.
D. The exercise of any claimed right hereunder by Avis shall not in
any fashion relieve Avis of its obligations to Executive under this Agreement
and any breach by Executive of the terms of Article IV or Article V, or both,
of this Agreement shall not serve to relieve Avis of its aforesaid obligations
to Executive. The availability of arbitration or pendency of an arbitration
proceeding shall not preclude the application by Avis to a Court of competent
jurisdiction for equitable relief to enjoin a breach or threatened breach under
Article IV and Article V of this Agreement.
IN WITNESS WHEREOF, Avis has caused this Amended and Restated
Employment Agreement to be executed in its corporate name by its duly
authorized officers, and Executive has hereunto set his hand on the day and
year first above written but to be effective as of February 9, 1996.
AVIS, INC.
ATTEST:
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------- ------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman and Chief
Executive Officer
WITNESS:
/s/ Xxxxxxxx Xxxxxx /s/ F. Xxxxxx Xxxxxxx
-------------------------- ----------------------------
Name: F. Xxxxxx Xxxxxxx
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