AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
Exhibit 10.4
AMENDMENT NO. 1
TO
AMENDMENT (“Amendment”) made to the Employment Agreement dated as of the Effective Date (the
“Employment Agreement”), by and between Wyndham Worldwide Corporation, a Delaware corporation (the
“Company”), and Xxxxx X. Xxxxxxx (the “Executive”). Except as provided herein all terms and
conditions set forth in the Employment Agreement shall remain in full force and effect.
WHEREAS, the Company and the Executive have previously entered into the Employment Agreement;
and
WHEREAS, the Company and the Executive desire to amend the Employment Agreement in a manner
intended to address Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).
NOW, THEREFORE, effective as of December 31, 2008, the Employment Agreement is hereby amended
as follows:
1. Section II of the Employment Agreement is hereby amended by adding the following sentence
to the end thereof:
“The Company acknowledges that given the nature and scope of the Executive’s duties
and responsibilities as the Chief Executive Officer of TRG, one of the three business
units of the Company, an integral part of the Executive being able to perform such
duties and responsibilities is the Executive’s ability to report directly to the
Chief Executive Officer of the Company and the Company further agrees the Chief
Executive Officer of the Company shall not delegate the direct supervision of the
Executive.”
2. Section IV-A of the Employment Agreement is hereby amended by adding the following sentence
to the end thereof:
“The Base Salary shall be payable according to the customary payroll
practices of the Company.”
3. Section IV-B of the Employment Agreement is hereby amended by adding the following
sentence to the end thereof:
“The Incentive Compensation Award shall be paid to the Executive at
such time as shall be determined by the Compensation Committee of the
Company’s Board of Directors, but in no event later than the last day
of the calendar year following the calendar year with respect to which
the performance targets relate.”
4. Section IV-G of the Employment Agreement is hereby amended by adding the following
sentence to the end thereof:
“The Company shall reimburse all taxable business expenses to the
Executive promptly following submission but in no event later than the
last day of the Executive’s taxable year following the taxable year in
which the expenses are incurred.”
5. Section V of the Employment Agreement is hereby amended by adding the following sentence
to the end thereof:
“For purposes of this Section V, Base Salary shall be paid in
accordance with the terms set forth in Section IV-A, and any Incentive
Compensation Award shall be paid in accordance with the terms set
forth in Section IV-B. Any earned but unpaid ALTI bonus shall be paid
in accordance with Section IV-C.”
6. Section VI of the Employment Agreement is hereby amended by adding the following sentence
to the end thereof:
“For purposes of this Section VI, Base Salary shall be paid in
accordance with the terms set forth in Section IV-A, and any
Incentive Compensation Award shall be paid in accordance with the
terms set forth in Section IV-B. Any earned but unpaid ALTI bonus
shall be paid in accordance with Section IV-C.”
7. Section VII-C(ii) of the Employment Agreement is hereby amended in its entirety as
follows:
“ii. ‘Constructive Discharge’ means (1) any material failure of the
Company to fulfill its obligations under this Agreement (including a
material reduction of Base Salary, as the same may be increased during
the Period of Employment), (2) the Executive’s primary business office
is moved without his consent to a location more than 50 miles from his
then current primary business office or (3) a material diminution of
the Executive’s duties, responsibilities or authority. The Executive
shall provide the Company a written notice which describes the
circumstances being relied on for such termination with respect to
this Agreement within thirty (30) days after the event giving rise to
the notice. The Company will have thirty (30) days after receipt of
such notice to remedy the situation prior to the termination for
Constructive Discharge.”
8. The first sentence of Section VII-D of the Employment Agreement is hereby amended in its
entirety as follows:
“In the event of a termination under this Section VII, any earned but
unpaid Base Salary as of the date of such termination shall be paid in
accordance with Section IV-A, (ii) any earned but unpaid Incentive
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Compensation Award as of the date of such termination shall be paid
in accordance with Section IV-B and (iii) the ALTI Bonus, to the
extent payable, shall be paid in accordance with Section IV-C. All
payments due to the Executive under Section VII(a)(i) shall be made to
the Executive in a lump sum no later than the 60th day
following the date of termination; provided, however,
that such payment shall be subject to, and contingent upon, the
execution by the Executive (or his beneficiary or estate) of a release
of claims against the Company and its affiliates in such reasonable
form determined by the Company in its sole discretion.”
9. Section IX of the Employment Agreement is hereby amended by adding the following sentence
to the end thereof:
“Notwithstanding any other provision of this Agreement, any Gross-Up
Payment under this Section IX shall be made to the Executive no later
than by the end of the Executive’s taxable year following the
Executive’s taxable year in which the Executive remits the applicable
taxes.”
10. The following new Section XIX is hereby added to the Employment Agreement:
“Section XIX
SECTION 409A OF THE CODE
SECTION 409A OF THE CODE
(a) Section 409A. Although the Company does not guarantee to
the Executive any particular tax treatment relating to the payments
and benefits under this Agreement, it is intended that such payments
and benefits be exempt from, or comply with, Section 409A of the Code
and the regulations and guidance promulgated thereunder (collectively,
“Code Section 409A”) and this Agreement shall be construed in a manner
consistent with the requirements for avoiding taxes or penalties under
Code Section 409A.
(b) Separation From Service. A termination of employment
shall not be deemed to have occurred for purposes of any provision of
this Agreement providing for the payment of amounts or benefits
subject to Code Section 409A upon or following a termination of
employment unless such termination is also a “Separation from Service”
within the meaning of Code Section 409A and, for purposes of any such
provision of this Agreement, references to a “resignation,”
“termination,” “termination of employment” or like terms shall mean
Separation from Service.
(c) Reimbursement. With regard to any provision herein that
provides for reimbursement of costs and expenses or in-kind benefits,
except as permitted by Code Section 409A, (i) the right to
reimbursement or in-kind benefits shall not be subject to liquidation
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or exchange for another benefit and (ii) the amount of expenses
eligible for reimbursement, or in-kind benefits, provided during any
taxable year shall not affect the expenses eligible for reimbursement,
or in-kind benefits to be provided, in any other taxable year,
provided, that the foregoing clause shall not be violated with
regard to expenses reimbursed under any arrangement covered by Section
105(b) of the Code solely because such expenses are subject to a limit
related to the period the arrangement is in effect.
(d) Specified Employee. If the Executive is deemed on the
date of termination of employment to be a “specified employee”, within
the meaning of that term under Section 409A(a)(2)(B) of the Code and
using the identification methodology selected by the Company from time
to time, or if none, the default methodology, then:
(i) With regard to any payment, the providing of any benefit or
any distribution of equity that constitutes “deferred compensation”
subject to Code Section 409A, payable upon separation from service,
such payment, benefit or distribution shall not be made or provided
prior to the earlier of (i) the expiration of the six-month period
measured from the date of the Executive’s Separation from Service or
(ii) the date of the Executive’s death; and
(ii) On the first day of the seventh month following the date of
the Executive’s Separation from Service or, if earlier, on the date of
death, (x) all payments delayed pursuant to this Section XIX shall be
paid or reimbursed to the Executive in a lump sum, and any remaining
payments and benefits due under this Agreement shall be paid or
provided in accordance with the normal dates specified for them herein
and (y) all distributions of equity delayed pursuant to this Section
XIX shall be made to the Executive.”
[Signature Page To Follow]
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IN WITNESS WHEREOF, the undersigned has caused this Amendment to be executed this
31st day of December 2008.
| EXECUTIVE |
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| /s/ Xxxxx X. Xxxxxxx | ||||
| Xxxxx X. Xxxxxxx | ||||
| WYNDHAM WORLDWIDE CORPORATION |
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| By: | /s/ Xxxx X. Xxxxxx | |||
| Xxxx X. Xxxxxx, Executive Vice President | ||||
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