EMPLOYMENT AGREEMENT
Exhibit
10.1
Execution
Copy
This
Employment Agreement ("Agreement") is dated as of April 17, 2006, by and between
Cendant Travel Distribution Services Group, Inc., a Delaware corporation (the
"Company") and Xxxx Xxxxxx (the "Executive").
WHEREAS,
the Company desires to employ the Executive, and the Executive desires to serve
the Company, in accordance with the terms and conditions of this
Agreement.
NOW
THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
parties hereby agree as follows:
SECTION
I
EMPLOYMENT;
POSITION AND RESPONSIBILITIES
The
Company agrees to employ the Executive, and the Executive agrees to be employed
by the Company, for the Period of Employment and upon the terms and conditions
provided in this Agreement. The Executive shall serve as President and Chief
Executive Officer of the Company from May 1, 2006 (the “Effective Date”),
through the third anniversary of such date, subject to earlier termination
as
provided herein (the “Period of Employment”). During the Period of Employment,
the Executive shall report to, and be subject to the direction of, the Board
of
Directors of the Company (the "Board"); provided,
however,
that
until the Company is no longer a wholly owned direct or indirect subsidiary
of
Cendant Corporation, the Executive will report to the Chief Executive Officer
of
Cendant Corporation (the “Cendant CEO”). The Executive shall perform such duties
and exercise such supervision with regard to the business of the Company as
are
associated with his position, as well as such additional duties as may be
prescribed from time to time by the Board (or, for so long as the Company is
a
wholly owned direct or indirect subsidiary of Cendant Corporation, the Cendant
CEO). The Executive shall, during the Period of Employment, devote substantially
all of his time and attention during normal business hours to the performance
of
services for the Company. The Executive shall maintain a primary office and
conduct his business primarily in Parsippany, New Jersey (the “Business
Office”), except for normal and reasonable business travel in connection with
his duties hereunder.
Effective
as of the Effective Date, the Executive will become a member of the Board.
Thereafter, during the Period of Employment, the Company will use
its
reasonable best efforts, subject to fiduciary obligations of the Board, to
nominate and have the Executive reelected to the Board. Following the
termination of the Executive’s employment for any reason, the Executive will
resign from the Board effective as of the effective date of such
termination.
SECTION
II
COMPENSATION
AND BENEFITS
For
all
services rendered by the Executive pursuant to this Agreement during the Period
of Employment, including services as an executive officer, director or committee
member of the Company or any subsidiary or affiliate of the Company, the
Executive shall be compensated as follows:
(a) Base
Salary
The
Company shall initially pay the Executive a fixed base salary ("Base Salary")
of
not less than $1,000,000, per annum, and thereafter the Executive shall be
eligible to receive annual increases as the Board deems appropriate, in
accordance with the Company’s customary procedures regarding salaries of senior
officers. Base Salary shall be payable according to the customary payroll
practices of the Company, but in no event less frequently than once each
month.
(b) Annual
Incentive Awards
The
Executive will be eligible to receive an annual incentive compensation award
in
respect of each fiscal year of the Company during the Period of Employment,
commencing with 2006, with a target payment equal to 150% of earned base salary
during each such fiscal year, subject to the terms and conditions (including
performance targets) relating to the annual bonus plan covering employees of
the
Company, and further subject to such performance goals, criteria or targets
reasonably determined by the Company in its sole discretion in respect of each
such fiscal year (each such annual bonus, an "Incentive Compensation Award”).
The performance goals, criteria and targets applicable to the Executive may
reasonably differ from those applicable to other senior executives of the
Company and its subsidiaries (based on differences in responsibility levels,
business unit goals or reasonable performance expectations) but shall, in the
aggregate, present an opportunity for achieving the performance goals, criteria
and targets required for award payments that is reasonably comparable to the
opportunity presented for other senior executives. As the Incentive Compensation
Award is subject to the attainment of performance criteria, it may be paid,
to
the extent earned or not earned, at below target levels, and above target levels
(with a maximum of 200% of the above referenced target level). Notwithstanding
the foregoing, the Executive’s Incentive Compensation Award for fiscal year 2006
will
equal
the total amount of Base Salary earned by Executive during calendar year 2006
multiplied by 150%, and such amount will not be subject to the attainment of
any
performance targets.
(c) Long-Term
Incentive Awards
(1)
Initial
Grant.
The
Executive is hereby awarded, effective as of the Effective Date, a long-term
incentive award with a grant date value equal to $3 million (the "Initial
Grant"). As of the date upon which the common stock of the Company becomes
publicly traded, such award will be converted to restricted stock units relating
to common stock of the Company and/or, at the election of the Executive,
with
respect to up to 50% of the grant value, stock options to purchase Company
common stock with a per share purchase price equal to the fair market value
of
Company common stock as of the date of such conversion. The number of restricted
stock units granted will equal the value of the award attributable to restricted
stock units, divided by the opening price of the Company’s common stock
on
its first day of trading on a public stock exchange. The number of stock
options
granted will equal the value of the award attributable to stock options,
divided
by the Black-Scholes value per option (as determined by the Company). In
the
event of a sale of the business operations of the Company to one or more
third
party purchasers (the “Purchaser”), whether by sale of stock (other than through
a sale of stock in an initial public offering), transfer of assets, merger
or
other means (a “Sale”), such award will be converted into (A) equity interests
in, or equity-based compensation awards payable from, the Company or the
Purchaser (or the successor to the business operations of the Company) having
terms, to the extent reasonably possible, similar to the terms of such awards
that would have existed if the Company was publicly traded as set forth above,
including the form of equity, the ability of the Executive to receive up
to 50%
of the grant value in stock
options or stock appreciation rights, a grant value determined by an independent
appraisal reasonably satisfactory to the Executive of at least $3 million,
vesting as described in the following sentence and liquidity rights in respect
of such equity interests or equity-based compensation no less favorable than
liquidity rights typically associated with equity awards granted by publicly
traded companies to senior executives and/or (B), to the extent conversion
on
such terms is not reasonably possible, a restricted cash award payable in
three
equal installments on the first three anniversaries of the Effective
Date.
The
Initial Grant shall vest in three equal installments on each of the first
three
anniversaries of the Effective Date and shall be subject to the terms and
conditions of the applicable stock plan of the Company under which such grant
is
made. The terms and conditions applicable to the Executive may reasonably
differ
from those applicable to other senior executives of the Company and its
subsidiaries (based on differences in
responsibility levels, business unit goals or reasonable performance
expectations) but shall, in the aggregate, present an opportunity for achieving
the targeted
award
payments reasonably comparable to the opportunity presented for other senior
executives.
(2)
Future
Long-Term Incentives.
Beginning in 2007 and in each calendar year during the period of Employment
thereafter, the Executive will be eligible to receive a long-term incentive
award with a grant date value equal to $3 million (“Annual Grant”), in such form
and subject to such terms and conditions as determined by the Compensation
Committee of the Board (the “Committee”) in its sole discretion. The terms and
conditions applicable to the Executive may reasonably differ from those
applicable to other senior executives of the Company and its subsidiaries (based
on differences in responsibility levels, business unit goals or reasonable
performance expectations) but shall, in the aggregate, present an opportunity
for achieving the targeted award payments reasonably comparable to the
opportunity presented for other senior executives.
(3)
Vested
Replacement Grant.
The
Executive is hereby awarded, effective as of the Effective Date, a long-term
incentive award with a grant date value equal to $3.0 million (the "Vested
Replacement Grant"); provided,
that,
if the
Company has not become publicly traded as of the first anniversary of the
Effective Date or if the Company consummates a Sale prior to the first
anniversary of the Effective Date (the occurrence of either of which is referred
to herein as an “Alternative Event”), in lieu of the Vested Replacement Grant,
the Company shall pay the Executive $3.0 million in cash at the earlier of
such
first anniversary or the consummation of the Sale. Unless there is an
Alternative Event, as of the date upon which the common stock of the Company
becomes publicly traded, such award will be converted to stock options to
purchase Company common stock with a per share purchase price equal to the
fair
market value of Company common stock as of the date of such conversion. The
number of stock options granted will equal the value of the award attributable
to stock options, divided by the Black-Scholes value per option (as determined
by the Company). The Vested Replacement Grant shall be fully vested as of the
date of grant, and shall expire as set forth on Schedule A hereto.
(4)
Unvested
Replacement Option Grant.
The
Executive is hereby awarded, effective as of the Effective Date, a long-term
incentive award with a grant date value equal to $2.1 million (the "Unvested
Replacement Option Grant"); provided,
that,
if
there is an Alternative Event, in lieu of the Unvested Replacement Grant, the
Company shall grant the Executive a restricted cash award with a value of $2.1
million. Unless there is an Alternative Event, as of the date upon which the
common stock of the Company becomes publicly traded, such award will be
converted to restricted stock units relating to common stock of the Company
with
respect to 50% of such value, and stock options to purchase Company common
stock
with a per share purchase price equal to the fair market
value
of
Company common stock as of the date of conversion with respect to the remaining
50% of such value. The number of restricted stock units granted will equal
the
value of the award attributable to restricted stock units, divided by the
opening price of the Company’s common stock on its first day of trading on a
public stock exchange. The number of stock options granted will equal the value
of the award attributable to stock options, divided by the Black-Scholes value
per option (as determined by the Company). The Unvested Replacement Option
Grant
(or, in the event of the Alternative Event, the restricted cash award) shall
vest, and expire, as set forth on Schedule B hereto.
(5)
Unvested
Replacement RSU Grant.
The
Executive is hereby awarded, effective as of the Effective Date, a long-term
incentive award with a grant date value equal to $2.7 million (the “Unvested
Replacement RSU Grant”); provided,
that,
if
there is an Alternative Event, in lieu of the Unvested Replacement RSU Grant,
the Company shall grant the Executive a restricted cash award with a value
of
$2.7 million. Unless there is an Alternative Event, as of the date upon which
the common stock of the Company becomes publicly traded, such award will be
converted to restricted stock units relating to common stock of the Company.
The
number of restricted stock units granted will equal the value of the award
attributable to restricted stock units, divided by the opening price of the
Company’s common stock on its first day of trading on a public stock exchange.
The Unvested Replacement RSU Grant (or, in the event of the Alternative Event,
the restricted cash award) shall vest as set forth on Schedule C
hereto.
(d) Sign-On
Bonus
By
no
later than June 30, 2006, the Company will pay the Executive a sign-on bonus
equal to $1.5 million.
(e) Additional
Benefits
The
Executive shall be entitled to participate in all other compensation and
employee benefit plans or programs and receive all benefits and perquisites
for
which salaried employees of the Company generally are eligible under any plan
or
program now in effect, or later established by the Company, on the same basis
as
similarly situated senior executives of the Company with comparable duties
and
responsibilities. The Executive shall participate to the extent permissible
under the terms and provisions of such plans or programs, and in accordance
with
the terms of such plans and programs.
SECTION
III
BUSINESS
EXPENSES
The
Company shall reimburse the Executive for all reasonable travel and other
expenses incurred by the Executive in connection with the performance of his
duties and obligations under this Agreement. The Executive shall comply with
such limitations and reporting requirements with respect to expenses as may
be
established by the Company from time to time and shall promptly provide all
appropriate and requested documentation in connection with such
expenses.
SECTION
IV
DEATH
AND DISABILITY
The
Period of Employment shall end upon the Executive's death. If the Executive
becomes Disabled (as defined below) during the Period of Employment, the Period
of Employment may be terminated at the option of the Executive upon notice
of
resignation to the Company, or at the option of the Company upon notice of
termination to the Executive. For purposes of this Agreement, "Disability"
shall
have the meaning set forth in Section 409A ("Code Section 409A") of the Internal
Revenue Code of 1986, as amended, and the rules and regulations promulgated
thereunder. The Company's obligation to make payments to the Executive under
this Agreement shall cease as of such date of termination except for (1) Base
Salary and any Incentive Compensation Awards earned but unpaid as of the date
of
such termination, and, (2) a pro-rata portion of any Incentive Compensation
Award to which the Executive would have been entitled had he continued in
employment until the end of the period for which such award would have been
earned (such pro-rata portion to be determined by multiplying (i) the ratio
of
the days of employment during such period to the total days in such period
by
(ii) the actual award which would have been earned based upon actual Company
performance determined after the completion of such period). In the event of
termination of the Period of Employment by reason of death or Disability, all
long-term equity awards (including, without limitation, restricted stock units
and stock options, and other equity-based compensation awards) then outstanding
shall become immediately vested and, with respect to any stock options or stock
appreciation rights, notwithstanding any term or provision to the contrary,
any
outstanding options or stock appreciation rights shall remain exercisable until
the first to occur of the third (3rd)
anniversary of the Executive’s termination of employment and the original
expiration date of such option or stock appreciation right.
SECTION
V
EFFECT
OF TERMINATION OF EMPLOYMENT
(a) Without
Cause Termination and Constructive Discharge.
If the
Executive's employment terminates during the Period of Employment due to either
a Without Cause Termi-nation or a Constructive Discharge (each as defined
below), then either:
|
(1)
if such termination occurs prior to the long-term incentive awards
granted
pursuant to Section II of this Agreement being converted into an
equity
award of either a publicly traded company or a private company following
a
sale of the Company (or, in the case of a Sale, into restricted cash
awards permitted under such Section II), then: (i) the Company shall
pay
the Executive (or his surviving spouse, estate or personal representative,
as applicable), in accordance with paragraph (d) below, an amount
equal to
299% multiplied by the sum of (A) the Executive’s then current Base
Salary, plus (B) the Executive’s then current target Incentive
Compensation Award and (ii) in lieu of being granted any of the equity
incentive awards described in Section II above, the Executive will
receive
a cash payment equal to the grant date value of such awards;
or
|
|
(2)
if such termination occurs following the conversion of the long-term
incentive awards granted pursuant to Section II of this Agreement
into an
equity award of either a publicly traded company or a private company
following the sale of the Company (or, in the case of a Sale, into
restricted cash awards permitted under such Section II), then: (i)
the
Company shall pay the Executive (or his surviving spouse, estate
or
personal representative, as applicable), in accordance with paragraph
(d)
below, an amount equal to 299% multiplied by the sum of (A) the
Executive’s then current Base Salary, plus (B) the Executive’s then
current target Incentive Compensation Award and (ii) all restricted
stock
units, restricted cash awards, stock options, and other equity-based
compensation awards granted pursuant to Section II of this Agreement
will
become fully and immediately vested, and all stock options and stock
appreciation rights will remain exercisable until the first to occur
of
the third anniversary of the Executive’s termination of employment and the
original expiration date of such option or stock appreciation
right.
|
(b) Termination
for Cause; Resignation.
If the
Executive's employment terminates due to a Termination for Cause or a
Resignation, Base Salary and any Incentive Compensation Awards earned but unpaid
as of the date of such termination shall be paid to the Executive. Except as
provided in this paragraph, the Company shall have no further obligations to
the
Executive hereunder.
(c) For
purposes of this Agreement, the following terms have the following
meanings:
i. "Termination
for Cause" means (a) the Executive’s willful failure to substantially perform
his duties as an employee of the Company or any subsidiary (other than any
such
failure resulting from incapacity due to physical or mental illness), (b) any
act of fraud, misappropriation, dishonesty, embezzlement or similar conduct
against the Company or any subsidiary, (c) the Executive’s conviction of a
felony or any crime involving moral turpitude (which conviction, due to the
passage of time or otherwise, is not subject to further appeal), (d) the
Executive’s gross negligence in the performance of his duties, (e) the Executive
purposefully or knowingly makes (or has been found to have made) a false
certification to the Company pertaining to its financial statements, (f) any
investigation, litigation or other proceeding relating to the affairs of one
or
more of the Public Corporations (as defined in Section XVIII hereof) materially
interferes over an extended period of time with the Executive’s performance of
his duties and responsibilities as contemplated by this Agreement and the
Executive fails or is unable to eliminate such material interference within
15
days of receipt of notice from the Board alleging its existence, or (g) by
reason of any court or administrative order, arbitration award or other ruling,
the Executive’s ability to fully perform his duties as Chief Executive Officer
or as a member of the Board is materially impaired. In the event that the
Company asserts that grounds exist for Termination for Cause, unless such
grounds are egregious and have caused the Company plain material harm, the
Company shall so notify the Executive and within no less than 5 days, nor more
than 15 days, afford the Executive a hearing before the Board or, if the Company
is publicly traded, a committee consisting of the independent directors of
the
Board, at the Board’s option, regarding any disputed facts. The Board or the
committee of the Board, as the case may be, shall make a determination regarding
the existence of Cause upon completion of any such hearing; provided,
however,
that
any determination that Cause exists shall require an affirmative resolution
of
the Board of Directors of the Company or the designated committee of the Board
acted upon in accordance with applicable Company By-laws and, if the Company
is
publicly traded, concurred in by at least a majority of the independent
directors (if any) of the Board. Notwithstanding the foregoing, the Company
shall be entitled to immediately and unilaterally restrict or suspend the
Executive’s duties pending determination of the existence of Cause.
ii. "Constructive
Discharge" means (a) any material failure of the Company to fulfill its
obligations under this Agreement (including without limitation a reduction
to
the Base Salary, as increased from time to time, or a reduction to the value
of
Incentive Compensation Award or Annual Grant
opportunity),
(b) the failure to nominate the Executive for membership on the Board, (c)
a
failure of the Executive to be elected or re-elected to membership on the Board
resulting from the failure of Cendant (as long as Cendant controls the Company)
or any Purchaser (as long as such Purchaser controls the Company) to vote shares
(other than with respect to shares acquired in a public offering) entitled
to
vote for the election of directors of the Company held by them in favor of
election of the Executive as a member of the Board, (d) the failure of any
successor to the business operations of the Company to assume the obligations
of
the Company under this Agreement, (e) the Business Office is relocated to any
location which is more than 30 miles from the city limits of Parsippany, New
Jersey, (f) a material diminution to the Executive’s duties and responsibilities
and (g) if
by the
first anniversary of the Effective Date, either (1) the Company has not yet
become a publicly traded company or (2) Cendant has not yet sold substantially
all of the stock or assets of the Company to a Purchaser.
The
Executive shall provide the Company a written notice which describes the
circumstances being relied on for the termination with respect to this Agreement
within thirty (30) days after an event giving rise to such notice. The Company
shall have thirty (30) days after receipt of such notice to remedy the situation
prior to the termination for Constructive Discharge.
iii. "Without
Cause Termination" or “Terminated Without Cause” means termination of the
Executive's employment by the Company other than due to death, dis-ability,
or
Termination for Cause. The Company shall provide written notice to the Executive
at least 15 days in advance of the effective date of any such termination;
provided that, the Company shall be entitled to immediately and unilaterally
restrict or suspend the Executive’s duties during such notice
period.
iv. “Resignation”
means a termination of the Executive’s employment by the Executive, other than
in connection with a Constructive Discharge. The Executive shall provide written
notice to the Company at least 15 days in advance of the effective date of
any
such termination.
(d) Conditions
to Payment and Acceleration.
All
payments due to the Executive under this Section V shall be made as soon as
practicable, but in no event earlier than the date permitted under Section
409A
of the Code, to the extent such payment is subject to Section 409A of the Code;
provided,
however,
that
such payments 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
and
consistent with the otherwise applicable terms of this Agreement as may be
necessary to effect a complete and valid release of any claims of the Executive
against the Company and its affiliates (excluding indemnification rights under
Section VII and payment rights under Section VIII hereof and excluding vested
rights
under employee benefit plans or programs and post-employment rights relating
to
outstanding equity or equity-based awards). The payments due to the Executive
under this Section V shall be in lieu of any other severance benefits otherwise
payable to the Executive under any severance plan of the Company or its
affiliates.
SECTION
VI
OTHER
DUTIES OF THE EXECUTIVE
DURING
AND AFTER THE PERIOD OF EMPLOYMENT
(a) The
Executive shall, with reasonable notice during or after the Period of
Employment, furnish such information pertaining to the Company and its
affiliates as may be in his possession and fully cooperate with the Company
and
its affiliates as may be requested in connection with any claims or legal action
in which the Company or any of its affiliates is or may become a party. After
the Period of Employment, Company agrees to reimburse the Executive for any
reasonable out-of-pocket expenses incurred by Executive by reason of such
cooperation, including any loss of salary, and the Company shall make reasonable
efforts to minimize interruption of the Executive’s life in connection with his
cooperation in such matters as provided for in this paragraph.
(b) The
Executive recognizes and acknowledges that all information pertaining to the
affairs; business; results of operations; accounting methods, practices and
procedures; members; acquisition candidates; financial condition; clients;
customers or other relationships of the Company or any of its affiliates
("Information") is confidential and is a unique and valuable asset of the
Company or any of its affiliates. The term “Information” shall not include
information which is or becomes available to the public other than as a result
of disclosure by the Executive in violation of this Agreement. Access to and
knowledge of certain of the Information is essential to the performance of
the
Executive's duties under this Agreement. The Executive shall not during the
Period of Employment or thereafter, except to the extent reasonably necessary
in
performance of his duties under this Agreement, give to any person, firm,
association, corporation, or governmental agency any Information, except (1)
as
may be required by law or by governmental authorities based on the advice of
counsel to the Executive; provided that the Company is immediately notified
of
the existence, terms and circumstances surrounding such request and the
Executive exercises his reasonable best efforts to obtain an order or other
reliable assurance that confidential treatment will be accorded to the
Information , (2) in order for the Executive to obtain legal advice (provided
that in any such case the Executive shall take steps to ensure that such
Information, to the extent subject to legal privilege or other confidentiality
rights in the hands of the Company, continues to be legally privileged and/or
confidential), and (3) as necessary to enforce the rights of the Executive
under
this Agreement in arbitration or other legal proceedings to which the Company
is
a party but, only to the extent, such information in the hands of the Company
is
not protected by the attorney client, work product or other legal privilege
or
immunity and the Executive exercises his reasonable best efforts to obtain
an
order or other reasonable assurance that confidential treatment will be accorded
to the Information. Except as permitted in the immediately preceding sentence,
the Executive shall not make use of the Information for his own purposes or
for
the benefit of any person or organization other than the Company or any of
its
affiliates. The Executive shall also use his best efforts to prevent the
disclosure of this Information by others. All records, memoranda, etc.
containing Information relating to the business of the Company or its
affiliates, whether made by the Executive or otherwise coming into his
possession, are confidential and shall remain the property of the Company or
its
affiliates.
(c) (i) During
the Period of Employment and for an additional period of either (A) a one year
period following the termination of Executive’s employment after the expiration
of the original Period of Employment or (B) a two (2) year period following
the
termination of Executive’s employment at an earlier time (whichever applies
being the "Restricted Period"), irrespective of the cause, manner or time of
any
termination, the Executive shall not use his status with the Company or any
of
its affiliates to obtain loans, goods or services from another organization
on
terms that would not be available to him in the absence of his relationship
to
the Company or any of its affiliates.
(ii) During
the Restricted Period, the Executive shall not make any statements or perform
any acts intended to or which may have the effect of advancing the interest
of
any Competitors of the Company or any of its affiliates or in any way injuring
the interests of the Company or any of its affiliates and the Company and its
affiliates shall not make or authorize any person to make any statement that
would in any way injure the personal or business reputation or interests of
the
Executive; provided however, that, subject to Section VI (b) hereof, nothing
herein shall preclude the Company and its affiliates or the Executive from
giving truthful testimony under oath in response to a subpoena or other lawful
process or truthful answers in response to questions from a government
investigation; provided,
further,
however,
that
nothing herein shall prohibit the Company and its affiliates from disclosing
the
fact of any termination of the Executive’s employment or, in the case of
Termination for Cause, the circumstances for such a termination. For purposes
of
this Section VI (c) (ii), the term “Competitor” means any enterprise or business
that is engaged in, or has plans to engage in, at any time during the Restricted
Period, any activity that competes with the businesses conducted during or
at
the termination of the Executive’s Period of Employment, or then proposed to be
conducted, by the Company and its affiliates in a manner that is or would be
material in relation to the businesses of the Company
or
the
prospects for the businesses of the Company. During the Restricted Period,
the
Executive, without prior express written approval by the Board, shall not (A)
engage in, or directly or indirectly (whether for compensation or otherwise)
manage, operate, or control, or join or participate in the management, operation
or control of a Competitor, in any capacity (whether as an employee, officer,
director, partner, consultant, agent, advisor, or otherwise) or (B) develop,
expand or promote, or assist in the development, expansion or promotion of,
any
division of an enterprise or the business intended to become a Competitor at
any
time after the end of the Restricted Period or (C) own or hold a Proprietary
Interest in, or directly furnish any capital to, any Competitor of the Company.
The Executive acknowledges that the Company's and its affiliates businesses
are
conducted nationally and internationally and agrees that the provisions in
the
foregoing sentence shall operate throughout the United States and the
world.
(iii) During
the Restricted Period, the Executive, without express prior written approval
from the Board, shall not solicit any members or the then current clients of
the
Company or any of its affiliates for any existing business of the Company or
any
of its affiliates or discuss with any employee of the Company or any of its
affiliates information or operations of any business intended to compete with
the Company or any of its affiliates.
(iv) During
the Restricted Period, the Executive shall not interfere with the employees
or
affairs of the Company or any of its affiliates or solicit or induce any person
who is an employee of the Company or any of its affiliates to terminate any
relationship such person may have with the Company or any of its affiliates,
nor
shall the Executive during such period directly or indirectly engage, employ
or
compensate, or cause or permit any person with which the Executive may be
affiliated, to engage, employ or compensate, any employee of the Company or
any
of its affiliates.
(v) For
the
purposes of this Agreement, Proprietary Interest means any legal, equitable
or
other ownership, whether through stock holding or otherwise, of an interest
in a
business, firm or entity; provided, that ownership of less than 5% of any class
of equity interest in a publicly held company shall not be deemed a Proprietary
Interest; the term subsidiary shall include without limitation all subsidiaries
of the Company and the term affiliates shall mean those corporations or other
business organizations controlled by the Company as well as those corporations
or other business organizations, regardless of whether the Company controls
such
organizations, for which the Executive has had direct or indirect supervisory
authority and responsibility during his Period of Employment (but shall in
no
event include the car rental, real estate or hospitality and timeshare
businesses of Cendant Corporation ).
(d) The
Executive hereby acknowledges that damages at law may be an insufficient remedy
to the Company if the Executive violates the terms of this Agreement and that
the Company shall be entitled, upon making the requisite showing, to preliminary
and/or permanent injunctive relief in any court of competent jurisdiction to
restrain the breach of or otherwise to specifically enforce any of the covenants
contained in this Section VI without the necessity of showing any actual damage
or that monetary damages would not provide an adequate remedy. Such right to
an
injunction shall be in addition to, and not in limitation of, any other rights
or remedies the Company may have. Without limiting the generality of the
foregoing, neither party shall oppose any motion the other party may make for
any expedited discovery or hearing in connection with any alleged breach of
this
Section VI.
(e) The
period of time during which the provisions of this Section VI shall be in effect
shall be extended by the length of time during which the Executive is in breach
of the terms hereof as determined by any court of competent jurisdiction on
the
Company's application for injunctive relief.
(f) The
Executive agrees that the restrictions contained in this Section VI are an
essential element of the compensation the Executive is granted hereunder and
but
for the Executive's agreement to comply with such restrictions, the Company
would not have entered into this Agreement.
SECTION
VII
INDEMNIFICATION
The
Company shall indemnify the Executive to the fullest extent permitted by the
laws of the state of the Company's incorporation in effect at that time, or
the
certificate of incorporation and by-laws of the Company, whichever affords
the
greater protection to the Executive.
SECTION
VIII
CERTAIN
TAXES
Anything
in this Agreement or in any other plan, program or agreement to the contrary
notwithstanding and except as set forth below, in the event that (i) the
Executive becomes entitled to any benefits or payments under Section V hereof
and (ii) it shall be determined either initially or at any subsequent time
that
any payment, benefit or distribution by the Company to or for the benefit of
the
Executive (whether paid or payable or distributed or distributable pursuant
to
the terms of this Agreement or otherwise, but determined without regard to
any
additional payments required under this Section VIII) (a “Payment”) would be
subject to the excise tax imposed by Section 4999 of the Internal Revenue Code
of
1986,
as amended, or any interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, together with any such interest
and
penalties, hereinafter collectively referred to as the “Excise Tax”), then the
Executive shall be entitled to receive an additional payment (a “Gross-Up
Payment”) in an amount such that after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
the Executive retains an amount of the Gross-Up Payment equal to the Excise
Tax
imposed upon the Payments. Notwithstanding the foregoing provisions of this
Section VIII, if it shall be determined that the Executive is entitled to a
Gross-Up Payment, but that the Payments do not exceed 110% of the greatest
amount (the “Reduced Amount”) that could be paid to the Executive such that the
receipt of Payments would not give rise to any Excise Tax, then no Gross-Up
Payment shall be made to the Executive and the Payments, in the aggregate,
shall
be reduced to the Reduced Amount. All determinations required to be made under
this Section VIII, including whether and when a Gross-Up Payment is required
and
the amount of such Gross-Up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by Deloitte & Touche LLP or
such other nationally recognized certified public accounting firm as may be
designated by the Company.
SECTION
IX
MITIGATION
The
Executive shall not be required to mitigate the amount of any payment provided
for hereunder by seeking other employment or otherwise, nor shall the amount
of
any such payment be reduced by any compensation earned by the Executive as
the
result of employment by another employer after the date the Executive's
employment hereunder terminates.
SECTION
X
WITHHOLDING
TAXES
The
Executive acknowledges and agrees that the Company may directly or indirectly
withhold from any payments under this Agreement all federal, state, city or
other taxes that shall be required pursuant to any law or governmental
regulation.
SECTION
XI
EFFECT
OF PRIOR AGREEMENTS
This
Agreement shall supersede any prior agreements between Cendant, the Company,
and
the Executive, and any such prior agreement shall be deemed terminated without
any remaining obligations of either party thereunder.
SECTION
XII
CONSOLIDATION,
MERGER OR SALE OF ASSETS
Nothing
in this Agreement shall preclude the Company from consolidating or merging
into
or with, or transferring all or substantially all of its assets to, another
corporation which assumes this Agreement and all obligations and undertakings
of
the Company hereunder. Upon such a consolidation, merger or sale of assets
the
term "the Company" shall mean the other corporation and this Agreement shall
continue in full force and effect. Further, the Company shall have the right
to
assign (and the Executive hereby consents to the Company’s assignment of) this
Agreement to any corporation which is the direct or indirect 100% owned parent
corporation of the Company.
SECTION
XIII
MODIFICATION
This
Agreement may not be modified or amended except in writing signed by the
parties. No term or condition of this Agreement shall be deemed to have been
waived except in writing by the party charged with waiver. A waiver shall
operate only as to the specific term or condition waived and shall not
constitute a waiver for the future or act on anything other than that which
is
specifically waived.
SECTION
XIV
GOVERNING
LAW
This
Agreement has been executed and delivered in the State of New Jersey and its
validity, interpretation, performance and enforcement shall be governed by
the
internal laws of that state.
SECTION
XV
ARBITRATION
(a) Any
controversy, dispute or claim arising out of or relating to this Agreement
or
the breach hereof which cannot be settled by mutual agreement (other than with
respect to the matters covered by Section VI for which the
Company
may, but shall not be required to, seek injunctive relief) shall be finally
settled by binding arbitration in accordance with the Federal Arbitration Act
(or if not applicable, the applicable state arbitration law) as follows: Any
party who is aggrieved shall deliver a notice to the other party setting forth
the specific points in dispute. Any points remaining in dispute twenty (20)
days
after the giving of such notice may be submitted to arbitration in New York,
New
York, to the American Arbitration Association, before a single arbitrator
appointed in accordance with the arbitration rules of the American Arbitration
Association, modified only as herein expressly provided. After the aforesaid
twenty (20) days, either party, upon ten (10) days notice to the other, may
so
submit the points in dispute to arbitration. The arbitrator may enter a default
decision against any party who fails to participate in the arbitration
proceedings.
(b) The
decision of the arbitrator on the points in dispute shall be final, unappealable
and binding, and judgment on the award may be entered in any court having
jurisdiction thereof.
(c) Except
as
otherwise provided in this Agreement, the arbitrator shall be authorized to
apportion its fees and expenses and the reasonable attorneys' fees and ex-penses
of any such party as the arbitrator deems appropriate. In the absence of any
such apportionment, the fees and expenses of the arbitrator shall be borne
equally by each party, and each party shall bear the fees and expenses of its
own attorney.
(d) The
parties agree that this Section XV has been included to rapidly and
inexpensively resolve any disputes between them with respect to this Agreement,
and that this Section XV shall be grounds for dismissal of any court action
commenced by either party with respect to this Agreement, other than
postarbitration actions seeking to enforce an arbitration award. In the event
that any court determines that this arbitration procedure is not binding, or
otherwise allows any litigation regarding a dispute, claim, or controversy
covered by this Agreement to proceed, the parties hereto hereby waive any and
all right to a trial by jury in or with respect to such litigation.
(e) The
parties shall keep confidential, and shall not disclose to any person, except
as
may be required by law, the existence of any controversy hereunder, the referral
of any such controversy to arbitration or the status or resolution
thereof.
SECTION
XVI
SURVIVAL
Sections
VI, VII, VIII, IX, X, XI, XII and XIII shall continue in full force in
accordance with their respective terms notwithstanding any termination of the
Period of Employment.
SECTION
XVII
SEPARABILITY
All
provisions of this Agreement are intended to be severable. In the event any
provision or restriction contained herein is held to be invalid or unenforceable
in any respect, in whole or in part, such finding shall in no way affect the
validity or enforceability of any other provision of this Agreement. The parties
hereto further agree that any such in-valid or unenforceable provision shall
be
deemed modified so that it shall be enforced to the greatest extent permissible
under law, and to the extent that any court of competent juris-diction
determines any restriction herein to be unreasonable in any respect, such court
may limit this Agreement to render it reasonable in the light of the
circumstances in which it was entered into and specifically enforce this
Agreement as limited.
SECTION
XVIII
REPRESENTATION
OF THE EXECUTIVE
The
Executive represents that, as of the date of the filing of the particular
financial statement or other public filing referred to below, he had no
knowledge of any accounting irregularity with respect to, or any material
misstatement or omission contained in, any financial statement or other public
filing made by any publicly-traded corporation on whose Board of Directors
the
Executive served as of such date (each such corporation being referred to as
a
“Public Corporation”).
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.
|
CENDANT
TRAVEL DISTRIBUTION
SERVICES GROUP,
INC.
/s/
Xxxxxxx X. Xxxxxx
|
|||
|
By:
Xxxxxxx X. Xxxxxx
|
|||
|
Title:
Executive Vice President
|
|
XXXX
XXXXXX
/s/
Xxxx Xxxxxx
|
|||
I. Schedule
A (Vested Replacement Grant Expiration)
|
Percentage
of $3 Million Grant
|
Expiration
Date
|
||
|
53%
|
3/31/2014
|
||
|
34%
|
4/11/2015
|
||
|
13%
|
5/20/2015
|
II. Schedule
B (Unvested Replacement Option Grant)
|
Percentage
of $2.1 Million Grant
|
Vesting
Date
|
Expiration
Date
|
|||
|
36%
|
3/31/2007
|
3/31/2014
|
|||
|
25%
|
4/11/2007
|
4/11/2015
|
|||
|
20%
|
5/20/2007
|
5/20/2015
|
|||
|
19%
|
5/20/2008
|
5/20/2015
|
III. Schedule
C (Unvested Replacement RSU Grant)
|
Percentage
of $2.7 Million Grant
|
Vesting
Date
|
||
|
15%
|
5/20/2006
|
||
|
9%
|
4/11/2007
|
||
|
15%
|
5/20/2007
|
||
|
61%
|
5/20/2008
|
