AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
Exhibit 10.6
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 Xxxxxxxx (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 III(b) 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 Committee, 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.”
2. Section IV 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 on or before the last day of the Executive’s taxable year
following the taxable year in which the expenses are incurred.”
3. The penultimate sentence of Section V of the Employment Agreement is hereby amended in its
entirety as follows:
“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 Incentive Compensation Awards earned but unpaid as of
the date of such termination, which shall be paid in accordance with
the terms set forth in Section III(a) and in accordance with the terms
of any applicable plan, respectively.”
4. The first sentence of Section VI(c)(ii) of the Employment Agreement is hereby amended in
its entirety as follows:
“(ii) ‘Constructive Discharge’ means: (i) any material breach by the
Company of the terms of this Agreement; (ii) any material diminution
in the Executive’s Base Salary; or (iii) a material diminution in the
Executive’s authority, duties or responsibilities.”
5. Section VI(d) of the Employment Agreement is hereby amended in its entirety as follows:
“(d) Conditions to Payment and Acceleration. In the event of
a termination under this Section VI, Base Salary earned but unpaid as
of the date of such termination shall be paid in accordance with
Section III(a), and any Incentive Compensation Awards earned but
unpaid as of the date of such termination shall be paid in accordance
with the terms of any applicable plan. All payments due to the
Executive under the first sentence of Section VI(a) 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. The payments
due to the Executive under this Section VI shall be in lieu of any
other severance benefits otherwise payable to the Executive under any
severance plan of the Company or its affiliates.”
6. 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
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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
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 Follows]
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IN WITNESS WHEREOF, the undersigned has caused this Amendment to be executed this
31st day of December 2008.
| EXECUTIVE | ||||||
| /s/ Xxxxx Xxxxxxxx | ||||||
| Xxxxx Xxxxxxxx | ||||||
| WYNDHAM WORLDWIDE CORPORATION | ||||||
| By: | /s/ Xxxx X. Xxxxxx
|
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