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May 15, 2000
Xxxxx XxXxxxxxx
Senior Vice President & General Manager
San Francisco
Xxxxxxxxxxx.xxx
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX
Dear Xxxxx:
This letter agreement ("Agreement") will confirm our mutual understanding with
respect to your employment by Travelocity Holdings, Inc. ("Travelocity" or the
"Company").
1. TITLE AND RESPONSIBILITIES
Effective as of March 7, 2000, the date of the closing of the merger between
Preview Travel, Inc. and Xxxxxxxxxxx.xxx, you were appointed to the positions
of Senior Vice President and General Manager, San Francisco Division of
Travelocity Holdings, Xxxxxxxxxxx.xxx Inc., and Xxxxxxxxxxx.xxx LP
(collectively, "Travelocity"). You will perform all functions consistent with
these positions, as determined by me in consultation with the Travelocity Board
of Directors, and shall report directly to me.
2. EMPLOYMENT AT WILL
Subject only to Section 4, below, either you or the Company may terminate your
employment at any time for any reason, with or without cause, by giving the
other party not less than seven days and not more than fourteen days written
notice of such termination.
3. COMPENSATION AND BENEFITS
a. SALARY
Your initial base salary will be $18,150 per month. Your salary will be
reviewed annually by me in consultation with the Compensation/Nominating
Committee of the Board (the Compensation Committee).
b. ANNUAL BONUS
You will also be eligible to participate in Travelocity's annual bonus plan,
which will pay awards based on the Company meeting pre-determined financial
objectives. Your 2000 target incentive award will be 40% of your 2000 earnings
from Travelocity. Your individual award will depend upon both actual Company
performance and your individual performance. The Compensation Committee, of
course, must officially approve the plan document for Travelocity Holdings.
Xxxxx XxXxxxxxx
May 15, 2000
c. STOCK
You will be eligible to participate in The Travelocity Holdings, Inc. Long-Term
Incentive Plan ("LTIP"). LTIP awards, when made, are in the form of annual
grants of stock options. This will confirm that the Xxxxxxxxxxx.xxx board has
approved an initial grant for you of 55,000 options, priced at the close of the
Preview Travel/Travelocity merger on March 7, 2000.
d. BENEFITS
You will also be eligible to participate in the Company's 401k, life and health
insurance programs, and the Employee Stock Purchase Plan. The details and
limitations of these and all benefit and compensation plans are subject to the
Company's policies and plans and may change from time to time in the Company's
sole discretion.
4. RELOCATION; SALARY REDUCTION
In the event that, without your written consent, the Company were to materially
reduce your base salary or target bonus, or permanently relocate your position
to a facility or location more than 25 miles from your present work location,
then the Company would: (a) pay you severance in an amount equal to the sum of
one year's base pay plus one year's target bonus (as they existed prior to such
event); (b) accelerate the vesting of all your unvested Xxxxxxxxxxx.xxx options
to the date of such event; (c) continue your benefits for a period of one year
from such event; and (d) provide you with a period of ninety days following
such event to exercise your vested options.
5. TERMINATION WITHOUT CAUSE FOLLOWING A CHANGE IN CONTROL
We are currently finalizing the terms and conditions of an executive benefits
termination agreement that will provide you with the following benefits should
you be terminated without cause following a change in control:
In the event the Company involuntarily terminates your employment without Cause
within a two-year period following a Change in Control of the Company, the
Company will: (a) pay to you severance in an amount equal to the sum of one
year's base pay plus two years' target bonus; (b) accelerate the vesting of all
your unvested Xxxxxxxxxxx.xxx options to the date of termination; (c) continue
your health and insurance benefits for one year following termination; and (d)
provide you with a period of ninety days following termination to exercise your
vested options.
If the value of the payments and benefits (including option acceleration) owed
to you following your involuntary termination and a Change in Control or Change
in Equity Structure exceeds three times the "base amount" (as defined in
Section 280G of the Internal Revenue Code), you will have the right to choose
whether to accept payments and benefits limited to 2.99 times the "base amount"
or accept the full payments and benefits. If you accept the full payments and
benefits, the Company will not pay any excise taxes or penalties you owe.
"Cause" and "Change in Control" shall have the definitions set forth in the
most recent LTIP.
"Involuntary termination without Cause" for the purposes of this letter, and
your executive termination benefits agreement shall include (a) a material
reduction by the Company, without your
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Xxxxx XxXxxxxxx
May 15, 2000
written consent, in your base salary and bonus compensation in effect
immediately prior to such reduction; (b) any permanent relocation of you by the
Company, without your written consent, to a facility or location more than 25
miles from your present work location; and (c) a significant reduction by the
Company, without your written consent, of your duties, titles, reporting
relationships, authority or responsibilities, relative to your duties, titles,
reporting relationships, authority and responsibilities in effect immediately
prior to such reduction.
6. TRANSITION AND COOPERATION
Upon termination of your employment with the Company for whatever reason, you
agree to execute any and all documents and to take any and all actions that the
Company may reasonably request to effect the transition of your duties and
responsibilities. You further agree to make yourself available with respect to,
and to cooperate in conjunction with, any litigation or investigation involving
the Company.
7. OTHER RESPONSIBILITIES
As consideration for the benefits and promises set forth in this Agreement, you
agree as follows:
For a period of two years following your employment, you will not directly or
indirectly solicit, induce or encourage (or assist any third party in
soliciting, inducing, or encouraging) an employee of the Company or its
Affiliates (whether or not now existing) to terminate employment without the
prior written consent of the Board or affiliate Board, as appropriate.
You will not in any way disparage, bring discredit to, or otherwise harm (i)
the Company, (ii) its Affiliates, or (iii) the employees, officers, and
directors of each.
"Affiliate" shall have the definition set forth in the most recent LTIP.
8. NON COMPETITION
You acknowledge the confidentiality of the information concerning, and the
trade secrets of, the Company and/or its Affiliates that has come or will come
into your possession or knowledge in connection with your employment by the
Company. By way of example, this information may include current and
prospective confidential know-how, inventions, customer lists, marketing plans,
and information on acquisitions, mergers and joint ventures. You agree to hold
such information and trade secrets in strict confidence.
In consideration of the confidential information provided by the Company, and
all other benefits under this Agreement, you agree that for a period of one
year following your employment that you will not become an employee of,
independent contractor of, consultant to, or perform any services for, any
Travelocity Direct Competitor. For purposes of this letter, Travelocity Direct
Competitor shall mean any entity that offers travel services via the Internet
directly to individual consumers and that obtains, or is reasonably expected to
obtain, at least $100 million in annual revenues from such services, including
but not limited to, Expedia Inc., Xxxxxxxxx.xxx, and the joint website
announced by United Air Lines, Delta Airlines, Continental Airlines, and
Northwest Airlines.
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Xxxxx XxXxxxxxx
May 15, 2000
9. MISCELLANEOUS
The laws of the State of Texas will govern this Agreement. You and the Company
agree that this Agreement represents the entire understanding with respect to
its subject matter. Only a writing that has been signed by both you and the
Company may modify this Agreement.
Please sign and return one of the originals of this Agreement to indicate your
agreement with the above arrangements.
Sincerely,
/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
President and CEO
Accept: /s/ Xxxxx XxXxxxxxx Date: May 30, 2000
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