RETENTION AGREEMENT
THIS RETENTION AGREEMENT dated as of January 1, 1999 (the "Effective
Date") by and between Avis Rent A Car, Inc. (the "Company") and Xxxxx X. Xxxxxxx
(the "Executive").
WITNESSETH:
WHEREAS, the Company has determined that appropriate steps should be taken
to encourage the Executive to remain employed by the Company by providing for
certain benefits;
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree to the following:
1. Definitions. The capitalized terms used herein shall have the meanings
ascribed to them below.
(a) "Cause" shall mean (i) the willful and continued failure by the
Executive substantially to perform the Executive's duties with the Company
(other than any such failure resulting from the Executive's incapacity due to
physical or mental illness), as determined by the Board of Directors of the
Company (the "Board"), (ii) the willful engaging by the Executive in misconduct
which is materially injurious to the Company, monetarily or otherwise, or (iii)
the Executive's conviction of a felony. Notwithstanding the foregoing, the
Executive's employment shall not be deemed to have been terminated for Cause
under clause (i) or (ii) above unless and until there shall have been delivered
to the Executive by the Company a copy of a Notice of Termination authorized by
the Board stating that in the good faith opinion of the Board the Executive is
guilty of conduct set forth in clause (i) or (ii) above and specifying the
particulars thereof in detail.
(b) "Good Reason" shall mean a reduction in the Executive's annual
rate of base salary as in effect on the date hereof or as the same may be
increased from time to time during the term of this Agreement. Notwithstanding
the foregoing, a termination by the Executive for Good Reason shall not be
effective unless (x) the Executive has delivered to the Company a Notice of
Termination for Good Reason within 30 days of his becoming aware of the
existence of an event or circumstance
constituting Good Reason; and (y) the Company has not cured such event or
circumstance within 10 business days of its receipt of such Notice of
Termination.
2. Retention Incentive.
(a) Subject to the conditions of paragraph (b) below, the Executive
shall be entitled to receive the following:
(i) a lump sum cash payment (the "First Cash Incentive") of $275,000
on June 30, 2000 (the "First Retention Date"); and
(ii) a lump sum cash payment (the "Second Cash Incentive" and,
together with the First Cash Incentive, the "Retention Incentive") of
$275,000 on December 31, 2001 (the "Second Retention Date").
(b) The Executive shall be entitled to the First Cash Incentive and
the Second Cash Incentive only if the Executive is employed by the Company as of
the First Retention Date and the Second Retention Date, respectively; provided,
however, that, in the event that the Executive's employment with the Company is
terminated prior to the Second Retention Date either (i) by the Company without
Cause or (ii) by the Executive for Good Reason, then the First Cash Incentive
(if it has not previously been paid) and the Second Cash Incentive shall be paid
on the dates described in clauses (a)(i) and (a)(ii), respectively.
(c) If the Executive's employment is terminated prior to the Second
Retention Date either (i) by the Company for Cause or (ii) by the Executive
other than for Good Reason, the Second Cash Incentive shall immediately be
forfeited. If the Executive's employment is terminated prior to the First
Retention Date either (x) by the Company for Cause or (y) by the Executive other
than for Good Reason, the Retention Incentive shall immediately be forfeited.
(d) The Retention Incentive shall be subject to deductions for
applicable federal, state and local withholding taxes.
3. No Effect on Other Contractual Rights. The provisions of this
Agreement, and any payment provided for hereunder, shall not reduce any amounts
otherwise payable, or in any way diminish the Executive's existing rights (or
rights which would accrue solely as a result of the passage of time) under any
employee benefit plan or employment agreement or other contract, plan or
arrangement nor shall any
amounts payable hereunder be considered in determining the amount of benefits
payable to the Executive under any such plan, agreement or contract.
4. Successor to the Company.
(a) This Agreement shall be binding on the Company's successors and
assigns.
(b) This Agreement shall inure to the benefit of and be enforceable
by the Executive's personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive should die while any amounts are still payable to the Executive
hereunder, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive's personal
representative, devisee, legatee, or other designee or, if there be no such
designee, to the Executive's estate.
5. Notice. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid as follows:
If to the Company:
Avis Rent A Car, Inc.
000 Xxx Xxxxxxx Xxxx
Xxxxxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
If to the Executive:
Xxxxx X Xxxxxxx
00 Xxxx Xxx
Xxxx Xxxxxx Xxxxxx, Xxx Xxxx 00000
or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
6. Amendment, Waiver. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in a writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach of the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not set forth expressly in this
Agreement.
7. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforce ability of any other
provision of this Agreement, which shall remain in full force and effect.
8. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
9. Governing Law. This Agreement shall be governed by and construed in
accordance with federal laws of the United States, if applicable or, if
inapplicable, in accordance with the laws of the State of New York applicable to
contracts entered into and to be performed entirely with the State of New York.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
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By: Xxxxxx X. Xxxxxxx
Title: Chairman
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Xxxxx X. Xxxxxxx
