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EXHIBIT 10.21
EXECUTIVE TERMINATION BENEFITS AGREEMENT
EXECUTIVE OFFICERS
This Executive Termination Benefits Agreement ("Agreement") dated as of
September 27, 1999 ("Effective Date"), is among Sabre Holdings Corporation, a
Delaware corporation ("Sabre Holdings"), Sabre Inc., a Delaware corporation
("Sabre Inc") (collectively, the "Company"), and Xxxxxx X. Xxxxxxxxx (the
"Executive").
WHEREAS, the Board of Directors recognizes that the likelihood of a
Change in Control affecting the Company, and the uncertainty which it may raise
among management personnel, may result in the departure or distraction of
management personnel to the detriment of the Company and its stockholders;
WHEREAS, the Board of Directors considers it essential to the best
interests of the Company and its stockholders that its key executives be
incentivized to remain with the Company, and to continue to devote their full
attention and dedication to the Company's business and their assigned duties, in
the event of an actual or likely Change in Control;
WHEREAS, the Board of Directors believes the Executive is a key
executive of the Company and, in the event of an actual or likely Change in
Control, the Board of Directors wants the Executive to continue performing his
or her duties, to assess the impact of the potential Change in Control, to
advise the Company whether the potential Change in Control is in the best
interests of the Company and its shareholders, to assist in implementing the
Change in Control, and to take such other actions as the Board might determine
to be appropriate under the circumstances, all without the Executive being
distracted by personal concerns about the impact of the potential Change in
Control on the Executive;
NOW, THEREFORE, in consideration of the mutual covenants below and
other good and valuable consideration, and in order to incentivize the Executive
to remain in the employ of the Company in the event of an actual or likely
Change in Control, the Company and the Executive agree as follows:
1) Defined Terms For purposes of this Agreement, the following terms have the
meanings ascribed to them below:
a) "Cause" means, but is not limited to, any of the following actions by the
Executive leading to termination of employment: theft, dishonesty or
fraud, insubordination, persistent inattention to duties or excessive
absenteeism, violation of the Company's work rules, code of conduct or
policies or state or federal law, or any other conduct which would
disqualify the Executive from entitlement to unemployment benefits.
b) "Change in Control" means an occurrence after the Effective Date of any
one or more of the events described in clauses (i), (ii), (iii), or (iv)
below.
i) Any Person directly or indirectly, becomes the beneficial owner (as
defined in Rule 13(d)-3 under the Exchange Act) of securities of the
Company representing fifteen percent (15%) or more of the combined
voting power of the Company's then outstanding securities; or
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ii) The individuals who, as of the Effective Date, constitute the Board
of Sabre Holdings Corporation (the "Incumbent Directors") cease for
any reason other than death to constitute at least a majority of the
Board, provided, however, that any individual becoming a director
subsequent to the Effective Date whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal
of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
iii) Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the
Company or the acquisition of assets of another corporation (a
"Business Combination"), in each case, unless, following such
Business Combination, (A) all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the
then outstanding shares of Stock of the Company (the "Outstanding
Company Stock") and the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting Securities")
immediately prior to such Business Combination beneficially own,
directly or indirectly, more than sixty percent (60%) of,
respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the
Company's assets either directly or throughout one or more
subsidiaries), (B) no Person (excluding any employee benefit plan (or
related trust) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly,
fifteen percent (15%) or more of respectively, the then outstanding
shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then
outstanding voting securities of such corporation except to the
extent that such ownership existed prior to the Business Combination,
and (C) at least a majority of the members of the board of directors
of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the
initial agreement, or of the action of the Board, providing for such
Business Combination; or
iv) Approval by the shareholders of the Company of a complete liquidation
or dissolution of the Company.
Notwithstanding anything in this Agreement to the contrary, in no event
will a Change in Control occur solely by reason of (1) a distribution to
the
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shareholders of AMR Corporation, whether as dividend or otherwise, of all
or any portion of the stock or any other voting securities of the Company
held, directly or indirectly, by AMR Corporation, or (2) a sale of all or
any portion of the stock or any other voting securities of the Company
held, directly or indirectly, by AMR Corporation in an underwritten public
offering.
c) "Company" means either Sabre Holdings or Sabre, except that with respect
to employment or payment the term also includes indirect subsidiaries and
affiliates of Sabre Holdings and Sabre.
d) "Disability" means the Executive's permanent inability to perform the
essential job functions of his or her position with or without reasonable
accommodation.
e) "Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor or replacement thereto.
f) "Notice of Termination" means a notice to the Executive or the Company
described in Section 3) below, and delivered in accordance with the
procedures of Section 3) below.
g) "Person" has the meaning ascribed to that term in Section 3(a)(9) of the
Exchange Act and as used in Sections 13(d) and 14(d) thereof, and includes
a "group" as defined in Section 13(d) of the Exchange Act; but excludes
the Company and any direct or indirect subsidiary of the Company and any
employee benefit plan sponsored or maintained by the Company or any direct
or indirect subsidiary of the Company (including any trustee of such plan
acting as trustee).
2) Circumstances Triggering Receipt of Severance Benefits
a) Subject to Section 2)c) below, the Company will provide the Executive with
the benefits set forth in Sections 4) and 6) below upon any termination of
the Executive's employment:
i) by the Company at any time within the first twenty-four (24) months
after a Change in Control;
ii) by the Company at any time within one hundred eighty (180) days prior
to a Change in Control;
iii) by the Executive within the thirty (30) day period immediately
following the first anniversary of a Change in Control;
iv) by the Executive for "Good Reason" (as defined in Section 2)b) below)
at any time within the first twenty-four (24) months after a Change
in Control.
b) For purposes of Section 2)a)iv) above, the Executive will be entitled to
terminate employment with the Company and its subsidiaries for "Good
Reason" after a Change in Control if:
i) without the Executive's written consent, one or more of the following
events occurs at any time during the first twenty-four (24) months
after such Change in Control:
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(1) the Executive is not appointed to, or is otherwise removed from,
any office or position with the Company or its subsidiaries that
is held by the Executive immediately prior to the Change in
Control for any reason other than for Cause or in connection with
the termination of employment with the Company or its
subsidiaries pursuant to Section 2)a)i) or 2)a)ii) above;
(2) the Executive's Base Salary rate or annual incentive compensation
target is reduced below that in effect immediately prior to the
Change in Control for any reason other than for Cause or in
connection with the termination of employment with the Company
and its subsidiaries pursuant to Section 2)a)i) or 2)a)ii) above;
(3) the Executive's principal office is moved, without the
Executive's consent, to a location that is more than fifty (50)
statute miles from its location immediately prior to the Change
in Control;
(4) for any reason other than for Cause or in connection with the
termination of his employment with the Company and its
subsidiaries pursuant to Section 2)a)i) or 2)a)ii) above, the
Executive suffers a significant adverse change in the nature or
scope of the authorities, powers, functions, responsibilities or
duties attached to the position with the Company which the
Executive held immediately prior to the Change in Control;
(5) the Executive determines in good faith that a change in
circumstances has occurred following a Change in Control which
has rendered the Executive substantially unable to carry out, has
substantially hindered the Executive's performance of, or has
caused the Executive to suffer a substantial reduction in, any of
the authorities, powers, functions, responsibilities or duties
attached to the position held by the Executive immediately prior
to the Change in Control;
(6) for any reason other than in connection with the termination of
employment or in connection with a bona fide restructuring of the
Executive's benefits that does not reduce the overall level of
such benefits, the Company asserts the intention to reduce or
reduces any benefit provided to the Executive below the level of
such benefit provided immediately prior to the Change in Control,
other than pursuant to the terms of any employment agreement
between the Company or a subsidiary of the Company and the
Executive ("Employment Agreement") (unless the Company agrees to
fully compensate Executive for any such reduction);
(7) a successor where applicable, does not assume and agree to the
terms of this Agreement in accordance with Section 9) below; or
(8) the Company purports to terminate Executive's employment other
than in accordance with a Notice of Termination.
ii) the Executive notifies the Company in writing (addressed in care of
the Chairman of the Board of the Company) of the occurrence of such
event;
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iii) within thirty (30) days following receipt of such written notice, the
Company does not cure such event to the reasonable satisfaction of
the Executive and deliver to the Executive a written statement that
it has done so; and
iv) within sixty (60) days following the expiration of the period
specified in Section 2)b)iii) above (without the occurrence of a cure
and written notice thereof as described in Section 2)b)iii) above),
the Executive voluntarily terminates employment with the Company.
c) Notwithstanding Sections 2)a) and 2)b) above, no benefits will be payable
by reason of this Agreement in the event of:
i) Termination of the Executive's employment with the Company by reason
of the Executive's death or Disability, so long as neither the
Executive nor the Company previously received a Notice of Termination
for the Executive.
ii) Termination by the Executive of the Executive's employment with the
Company at or after age sixty-five (65) if the Executive is then
eligible for retirement; or
iii) Termination of the Executive's employment with the Company for Cause.
This Section 2)c) will not preclude the payment of any amounts
otherwise payable to the Executive under any of the Company's
employee benefit plans, programs and arrangements and/or under any
Employment Agreement. The Executive will not be deemed to have been
terminated for Cause unless (A) reasonable notice is given to the
Executive that the Board of Directors intends to meet to consider
terminating the Executive for Cause, (B) a meeting of the Board of
Directors is held at which the Executive (and his legal counsel if
desired by the Executive) is given an opportunity to present a
defense, and (C) following that meeting, a resolution is approved by
the affirmative vote of at least seventy-five percent (75%) of the
members of the Board of Directors of the Company, which concludes
that Cause exists, specifies the acts or failures to act constituting
Cause, and approves the termination of the Executive for Cause.
3) Notice of Termination Any termination of the Executive's employment with the
Company as contemplated by Section 2) above will be communicated by written
notice to the Executive or the Company delivered in person or by certified
mail. Any "Notice of Termination" will: (i) state the effective date of
termination, which will not be less than thirty (30) days or more than sixty
(60) days after the date the Notice of Termination is delivered (the
"Termination Date"), except that the Termination Date may be immediate if
Cause exists; (ii) state the specific provision in this Agreement being
relied upon for termination; (iii) state the facts and circumstances claimed
to provide a basis for such termination in reasonable detail, and (iv) in the
case of termination for Cause, be signed by the Chairman of the Board of the
Company.
4) Termination Benefits Subject to the conditions set forth in Section 2) above,
the Company will pay or provide to the Executive (net of any applicable
payroll or other taxes required to be withheld) the following:
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a) Compensation The Company will pay to the Executive the sum of (i) three
(3) times the greater of (A) the Executive's effective annual base salary
at the Termination Date or (B) the Executive's effective annual base
salary immediately prior to the Change in Control, plus (ii) three (3)
times the greater of (X) the highest annual bonus awarded to the Executive
under the Company's Variable Compensation Plan or any other bonus plan
(whether paid currently or on a deferred basis) with respect to any twelve
(12) consecutive month period during the last three (3) fiscal years
ending prior to the Termination Date or (Y) the highest target bonus rate
applicable to the Executive for any period during such prior three (3)
year period, multiplied by the applicable annual base salary determined
under clause (i) of this Section 4)a); the resulting amount to be paid in
a lump sum on the first day of the month following the Termination Date.
b) Health Insurance Benefits The Company will pay to the Executive an amount
equal to the cost, at standard independent insurance premium rates as of
the Termination Date (or, if applicable and higher, the cost to the
Executive of exercising his right of continued coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1986, as amended), of
purchasing benefits for the Executive on an individual basis that are
equal to the Executive's Company-paid participation (including dependent
coverage) in the travel accident, major medical, dental and vision care
insurance plans, calculated as if such benefits were continued during the
thirty-six (36) month period following the Termination Date, and paid in a
lump sum on the first day of the month following the Termination Date;
such payment to be in lieu of (or offset by) any rights to continued
coverage under such plans on a Company-funded basis. Notwithstanding the
foregoing, if the Executive notifies the Company that, as of the
Termination Date, he or she was unable to obtain any aspect of the
above-mentioned insurance coverage (including dependent coverage) that is
not provided through continued coverage on a Company-funded basis at a
rate no greater than the annualized amount paid to him or her pursuant to
this provision, the Company will continue to provide any such coverage to
the Executive.
c) Retirement Benefits The Executive will be deemed to be completely vested
in Executive's currently accrued benefits under The Sabre Group Retirement
Plan ("SGRP"), the Legacy Pension Plan ("LPP") and the Supplemental
Executive Retirement Plan ("SERP") in effect as of the date of Change in
Control, regardless of his or her actual vesting service credit
thereunder. In addition, an Executive who is an SGRP Member as defined by
the LPP will be credited with Employer Contributions and Employer Matching
Contributions as though the Executive contributed at a level to receive
the maximum Employer Matching Contributions for the thirty-six (36) month
period following Termination Date. The SGRP Supplemental Benefit will be
calculated as though the Executive's compensation rate equaled the amount
determined in Section 4)a) above. The Executive will be deemed to earn
service credit for benefit calculation purposes under Sections 4.1(a),
4.1(b), and 4.1(c) of the SERP for the period of thirty-six (36) months
following the Termination Date. The Legacy Plan Supplemental Benefit under
the SERP will become payable at any time designated by the Executive
following termination of the Executive's employment with the Company after
the Executive reaches age fifty-five (55), subject to the terms of the LPP
regarding the actuarial adjustment of benefit payments commencing prior to
normal retirement age. The Legacy Plan Supplemental
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Benefit under the SERP will be calculated as though the Executive's
compensation rate for each of the five (5) years immediately preceding his
retirement equaled the amount determined in Section 4)a) above. Any
benefits payable pursuant to this Section 4)c) that are not payable out of
the SGRP, LPP or SERP for any reason (including but not limited to any
applicable benefit limitations under the Employee Retirement Income
Security Act of 1974, as amended, or any restrictions relating to the
qualification of the Company's Retirement Benefit Plan under Section
401(a) of the Internal Revenue Code of 1986, as amended ("Code"), or any
successor provision), will be paid directly by the Company out of its
general assets.
d) Relocation Benefits If the Executive moves his residence in order to
pursue other business or employment opportunities within thirty-six (36)
months after the Termination Date and requests in writing that the Company
provide relocation services, the Executive will be reimbursed for any
reasonable expenses incurred in that initial relocation (including taxes
payable on the reimbursement) which are not reimbursed by another
employer. Benefits under this provision will include assistance in selling
the Executive's home and all other assistance and benefits that were
customarily provided by the Company to transferred executives at the same
management level as the Executive prior to the Change in Control.
e) Executive Outplacement Counseling At the request of the Executive made in
writing within thirty-six (36) months after the Termination Date, the
Company will engage an outplacement counseling service of national
reputation to reasonably assist the Executive in obtaining employment.
f) Stock Based Compensation Plans
i) Any issued and outstanding Stock Options and Stock Appreciation
Rights granted in connection with such Stock Options (to the extent
they have not already become exercisable) will become immediately
exercisable in accordance with the Company's 1996 Long Term Incentive
Plan, Amended and Restated 1996 Long Term Incentive Plan, or any
successor plans (collectively the "LTIPs").
ii) Upon the Change in Control, (A) the Company's right to revoke or
rescind any award of stock or stock-based compensation to the
Executive under the Company's LTIPs will terminate; (B) the Company
will reissue, reinstate or replace to the Executive any award of
stock or stock based compensation for which a revocation or
rescission occurred in the one-hundred eighty (180) days preceding
the Change in Control, unless the revocation or rescission was
attributable to a termination of the Executive for Cause; and (C) any
other unilateral change by the Company to any award of stock or
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stock based compensation, or any change to the LTIP or the
interpretation of the LTIP, which change occurred in the one-hundred
eighty (180) days preceding the Change in Control and adversely
affected the Executive's rights in any award of stock or stock based
compensation, will be deemed as to the Executive to have been void ab
initio and without effect.
iii) The Executive's rights under any other stock-based compensation plan,
including but not limited to restricted stock, performance shares,
stock appreciation rights, and stock equivalent units, will vest (to
the extent they have not already vested) in accordance with the
Company's LTIPs.
g) Split Dollar Life Insurance. The Company will, for thirty-six (36) months
after the Termination Date, continue to provide the Executive with the
Company's Split Dollar Life Insurance benefit as in effect immediately
prior to the date of the Change in Control. Not later than the expiration
of that thirty-six (36) month period, the Executive (or the Executive's
estate in the event of the payment of a claim under the Executive's
policy,) will repay to the Company, without interest, all premiums paid by
the Company to provide the Split Dollar Life Insurance benefit.
h) Travel Privileges The Company will purchase or otherwise make available to
the Executive personal air travel on American Airlines and American Eagle
(A) under terms and conditions no less favorable than those that did apply
or would have applied to the Executive as an "Eligible Employee" under the
Travel Privileges Agreement between the Company and American Airlines,
Inc. ("American") dated July 1, 1996, as amended, including any successor
agreement ("Travel Agreement") if the Executive's employment with the
Company had continued; and (B) at an after tax cost to the Executive equal
to the after tax cost the Executive would have paid for personal air
travel using the travel privileges as an "Eligible Employee" under the
Travel Agreement if the Executive's employment with the Company had
continued. The Company will provide personal air travel pursuant until the
earlier to occur of: (A) the expiration of the Travel Agreement (currently
scheduled for June 30, 2008) or (B) a termination of the Travel Agreement
by American other than as a consequence of the Change in Control; except
that if before such an occurrence the Executive reaches (w) fifty-five
(55) years of age with five (5) years of service if hired on or before
July 31, 1996, or (x) fifty-five (55) years of age with ten (10) years of
service if hired after July 31, 1996, or (y) fifty (50) years of age with
ten (10) years of service, or (z) fifty (50) years of age with fifteen
(15) years of service, then the Company will purchase or otherwise make
available to the Executive, immediately if the Executive qualifies under
the preceding clauses (w) or (x), or upon the Executive reaching sixty-two
(62) years of age if the Executive qualifies under the preceding clause
(y), or upon the Executive reaching fifty-five (55) years of age if the
Executive qualifies under the preceding clause (z), personal air travel on
American Airlines and American Eagle (a) under terms and conditions no
less favorable than those that would have applied to the Executive as an
"Eligible Retiree" under the Travel Agreement if the Executive had retired
from the Company; and (b) at an
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after tax cost to the Executive equal to the after tax cost the Executive
would have paid for personal air travel using the travel privileges
available as an "Eligible Retiree" under the Travel Agreement if the
Executive had retired from the Company. If the Travel Agreement is
terminated by American due to the Change in Control, the Company will
provide the personal air travel described in this Section 4)h) without
regard to any termination of the Travel Agreement.
i) Automobile If, immediately prior to a Change in Control, no automobile is
leased by the Company for the Executive's use, then the Executive will be
entitled to receive on the Termination Date a lump sum car allowance equal
to thirty-six times the monthly car allowance that the Company paid to the
Executive immediately prior to the Change in Control. The Executive will
be entitled to continue using, at the Company's expense and under the same
terms and conditions that applied to the leased automobile immediately
prior to the Change in Control, any automobile leased by the Company for
the Executive's use, until the earlier of (i) the date thirty-six (36)
months after the Termination Date or (ii) the termination or expiration of
the automobile lease. If the automobile lease expires or is terminated
sooner than thirty-six (36) months after the Termination Date, the
Executive will be entitled to receive thereafter, until the date
thirty-six (36) months after the Termination Date, a monthly car allowance
equal to the monthly car allowance paid by the Company to its executives
immediately prior to the Change in Control. Upon the termination or
expiration of the automobile lease, and subject to the terms and
conditions of the automobile lease, the Executive will be entitled to have
the Company exercise, on behalf of the Executive and at the Executive's
sole expense, any purchase option under the automobile lease.
j) Other Perquisites The Company will pay to the Executive an amount equal to
the cost to the Company of providing or continuing any other perquisites
and benefits of the Company that were in effect immediately prior to the
Change in Control, calculated as if such benefits were continued during
the thirty-six (36) month period following the Termination Date, and
payable in a lump sum on the first day of the month following the
Termination Date.
k) Accrued Amounts The Company will pay to the Executive all other amounts
accrued or earned by the Executive through the Termination Date and
amounts otherwise owing under the then existing plans and policies of the
Company, including but not limited to all amounts of compensation
previously deferred by the Executive (together with any accrued interest
thereon) and not yet paid by the Company, and any accrued vacation pay not
yet paid by the Company.
5) Payment of Certain Legal Fees and Costs
a) If a dispute arises regarding a termination of the Executive or the
interpretation or enforcement of this Agreement, after a Change in
Control, the parties will submit the dispute, within thirty (30) business
days following service of notice of such dispute by one party on the
other, to J*A*M*S/Endispute for prompt resolution in Dallas, Texas, under
its rules for labor and employment disputes. The Arbitrator will have no
authority to order a modification or amendment of
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this Agreement. The decision of the Arbitrator will be final and binding
upon the parties. All reasonable fees and expenses, including, without
limitation, any arbitration or legal expenses, incurred by the Executive
in contesting or disputing any such termination (in whole or in part) or
in obtaining or enforcing any right or benefit provided for in this
Agreement (in whole or in part) or in otherwise pursuing his or her claim
(in whole or in part) will be paid by the Company, to the extent permitted
by law, regardless of whether the Executive is successful.
b) In the event that the Company refuses or otherwise fails to make a payment
when due and it is ultimately decided that the Executive is entitled to
such payment, such payment will be increased to reflect an interest
factor, compounded annually, equal to the prime rate in effect as of the
date the payment was first due plus two points. For this purpose, the
prime rate will be based on the rate identified by Chase Manhattan Bank as
its prime rate.
6) Certain Additional Payments by the Company
a) Notwithstanding anything in this Agreement to the contrary (except as
provided in Section 6)h) below), if there is a Change in Control and any
payment (other than the Gross-Up payments provided for in this Section 6)
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 pursuant to or by reason of any other
agreement, policy, plan, program or arrangement, including without
limitation any stock option, stock appreciation right or similar right,
restricted stock, deferred stock or the lapse or termination of any
restriction on, deferral period or the vesting or exercisability of any of
the foregoing (a "Payment"), would be subject to the excise tax imposed by
Section 4999 of the Code or any successor provision thereto by reason of
being considered "contingent on a change in ownership or control" of the
Company, within the meaning of Section 280G of the Code (or any successor
provision thereto) or to any similar tax imposed by state or local law, or
any interest or penalties with respect to such tax (such tax or taxes,
together with any such interest and penalties, being hereafter
collectively referred to as the "Excise Tax"), then the Executive will be
entitled to receive an additional payment or payments (collectively a
"Gross-Up Payment"). The Gross-Up Payment will be 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 any Excise Tax
and any income 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 Payment.
b) Subject to the provisions of Section 6)f), all determinations required to
be made under this Section 6), including whether an Excise Tax is payable
by the Executive and the amount of such Excise Tax and whether a Gross-Up
Payment is required to be paid by the Company to the Executive and the
amount of such Gross-Up Payment, if any, will be made by a nationally
recognized accounting firm (the "Accounting Firm") selected by the
Executive in his sole discretion. The Executive will direct the Accounting
Firm to submit its
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determination and detailed supporting calculations to both the Company and
the Executive within thirty (30) calendar days after the Change in
Control, the Termination Date, if applicable, and any such other time or
times as may be requested by the Company or the Executive. If the
Accounting Firm determines that any Excise Tax is payable by the
Executive, the Company will pay the required Gross-Up Payment to the
Executive within five (5) business days after receipt of such
determination and calculations with respect to any Payment to the
Executive. If the Accounting Firm determines that no Excise Tax is payable
by the Executive, it will, at the same time as it makes such
determination, furnish the Company and the Executive an opinion that the
Executive has substantial authority not to report any Excise Tax on his
federal, state or local income or other tax return. As a result of the
uncertainty in the application of Section 4999 of the Code (or any
successor provision thereto) and the possibility of similar uncertainty
regarding applicable state or local tax law at the time of any
determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have
been made (an "Underpayment"), consistent with the calculations required
to be made hereunder. In the event that the Company exhausts or fails to
pursue its remedies pursuant to Section 6)g) and the Executive thereafter
is required to make a payment of any Excise Tax, the Executive will direct
the Accounting Firm to determine the amount of the Underpayment that has
occurred and to submit its determination and detailed supporting
calculations to both the Company and the Executive as promptly as
possible. The Company will promptly pay any such Underpayment to, or for
the benefit of, the Executive within five business days after receipt of
such determination and calculations.
c) The Company and the Executive will each provide the Accounting Firm access
to and copies of any books, records and documents in the possession of the
Company or the Executive, as the case may be, reasonably requested by the
Accounting Firm, and otherwise cooperate with the Accounting Firm in
connection with the preparation and issuance of the determinations and
calculations contemplated by Section 6)b). Any determination by the
Accounting Firm as to the amount of the Gross-Up Payment will be binding
upon the Company and the Executive.
d) The federal, state and local income or other tax returns filed by the
Executive will be prepared and filed on a consistent basis with the
determination of the Accounting Firm with respect to the Excise Tax
payable by the Executive. The Executive will make proper payment of the
amount of any Excise Payment, and at the request of the Company, provide
to the Company true and correct copies (with any amendments) of his
federal income tax return as filed with the Internal Revenue Service and
corresponding state and local tax returns, if relevant, as filed with the
applicable taxing authority, and such other documents reasonably requested
by the Company, evidencing such payment. If prior to the filing of the
Executive's federal income tax return, or corresponding state or local tax
return, if relevant, the Accounting Firm determines that the amount of the
Gross-Up Payment should be reduced, the Executive will within five
business days pay to the Company the amount of such reduction.
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e) The fees and expenses of the Accounting Firm for its services in
connection with the determinations and calculations contemplated by
Section 6)b) will be borne by the Company. If such fees and expenses are
initially paid by the Executive, the Company will reimburse the Executive
the full amount of such fees and expenses within five (5) business days
after receipt from the Executive of a statement therefore and reasonable
evidence of his payment thereof.
f) The Executive will notify the Company in writing of any claim by the
Internal Revenue Service or any other taxing authority that, if
successful, would require the payment by the Company of a Gross-Up Payment
or any additional Gross-Up Payment. Such notification will be given as
promptly as practicable but no later than ten (10) business days after the
Executive actually receives notice of such claim and the Executive will
further apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid (in each case, to the extent
known by the Executive). The Executive will not pay such claim prior to
the earlier of (x) the expiration of the thirty (30) calendar-day period
following the date on which he gives such notice to the Company and (y)
the date that any payment of amount with respect to such claim is due. If
the Company notifies the Executive in writing prior to the expiration of
such period that it desires to contest such claim, the Executive will:
i) provide the Company with any written records or documents in his
possession relating to such claim reasonably requested by the
Company;
ii) take such action in connection with contesting such claim as the
Company will reasonably request in writing from time to time,
including without limitation accepting legal representation with
respect to such claim by an attorney competent in respect of the
subject matter and reasonably selected by the Company;
iii) cooperate with the Company in good faith in order effectively to
contest such claim; and
iv) permit the Company to participate in any proceedings relating to such
claim; except that the Company will bear and pay directly all costs
and expenses (including interest and penalties) incurred in
connection with such contest and will indemnify and hold harmless the
Executive, on an after-tax basis, for and against any Excise Tax or
income tax, including interest and penalties with respect thereto,
imposed as a result of such contest and payment of costs and
expenses. Without limiting the foregoing provisions of this Section
6)f), the Company will control all proceedings taken in connection
with the contest of any claim contemplated by this Section 6)f) and,
at its sole option, may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim (except that the Executive may
participate therein at his own cost and expense) and may, at its
option, either direct the Executive to pay the tax claimed and xxx
for a refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and
in one or more appellate courts, as the
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Company will determine; except that if the Company directs the
Executive to pay the tax claimed and xxx for a refund, the Company
will advance the amount of such payment to the Executive on an
interest-free basis and will indemnify and hold the Executive
harmless, on an after-tax basis, from any Excise Tax or income or
other tax, including interest or penalties with respect thereto,
imposed with respect to such advance; and except that any extension
of the statute of limitations relating to payment of taxes for the
taxable year of the Executive with respect to which the contested
amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of any such contested
claim will be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and the Executive will be entitled
to settle or contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing authority.
g) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 6)g), the Executive receives any refund with
respect to such claim, the Executive will (subject to the Company's
complying with the requirements of Section 6)f) above) promptly pay to the
Company the amount of such refund (together with any interest paid or
credited thereon after any taxes applicable thereto). If, after the
receipt by the Executive of an amount advanced by the Company pursuant to
Section 6)f) above, a determination is made that the Executive will not be
entitled to any refund with respect to such claim and the Company does not
notify the Executive in writing of its intent to contest such denial or
refund prior to the expiration of thirty (30) calendar days after such
determination, then such advance will be forgiven and will not be required
to be repaid and the amount of any such advance will offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid by the Company
to the Executive pursuant to this Section.
h) Notwithstanding any provision of this Agreement to the contrary, if (i)
the aggregate "present value" of the "parachute payments" to be paid or
provided to the Executive under this Agreement or otherwise does not
exceed 1.15 multiplied by three times the Executive's "base amount," and
(ii) but for this Section h), the Company would be obligated to pay to the
Executive a Gross-Up Payment with a net after-tax benefit to the Executive
of not more than Fifty Thousand Dollars (USD $50,000) (taking into account
both income taxes and any Excise Tax), then, in lieu of such Gross-Up
Payment, the payments and benefits to be paid or provided under this
Agreement (including any stock based compensation pursuant to Section 4)f)
above) will be reduced to the minimum extent necessary (but in no event to
less than zero) so that no portion of any payment or benefit to the
Executive, as so reduced, constitutes an "excess parachute payment." For
purposes of this Section 6)h), the terms "excess parachute payment,"
"present value," "parachute payment," and "base amount" will have the
meanings assigned to them by Section 280G of the Code. The determination
of whether any reduction in such payments or benefits to be provided under
this Agreement is required pursuant to the preceding sentence will be made
at the expense of the Company, if requested by the Executive or the
Company, by the Accounting Firm. The fact that the
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Executive's right to payments or benefits may be reduced by reason of the
limitations contained in this Section 6)h) will not of itself limit or
otherwise affect any other rights of the Executive other than pursuant to
this Agreement. In the event that any payment or benefit intended to be
provided under this Agreement or otherwise is required to be reduced
pursuant to this Section 6)h), the Executive will be entitled to designate
the payments and/or benefits to be so reduced in order to give effect to
this Section 6)h). The Company will provide the Executive with all
information reasonably requested by the Executive to permit the Executive
to make such designation. In the event that the Executive fails to make
such designation within ten (10) business days of the Termination Date,
the Company may effect such reduction in any manner it deems appropriate.
7) Letter of Credit, etc. In order to better ensure the availability of funds to
pay all amounts provided for in Sections 4), 5) and 6), the Chief Financial
Officer may on behalf of the Company establish a "grantor" trust or standby
Letter or Letters of Credit or other suitable arrangements in an amount
sufficient to cover such amounts. The financial facility or arrangement
selected by the Chief Financial Officer will be irrevocable as of a Change in
Control and will become available to the Executive upon the Termination Date
and upon presentation of the documents specified in the Letter of Credit or
other financial facility or arrangement. All funds provided by the Company to
cover such payment, if any, will revert to the Company after payment in full
to the Executive, subject to the applicable terms of the documents
implementing such arrangements.
8) Continuing Obligations
a) All documents, records, techniques, business secrets and other information
which have come into the Executive's possession from time to time during
his or her employment with the Company will be deemed to be confidential
and proprietary to the Company and, except for personal documents and
records of the Executive, will be returned to the Company.
b) The Executive will retain in confidence any confidential information
concerning the Company and its subsidiaries and their respective
businesses so long as such information is not publicly disclosed, except
that Executive may disclose any such information required to be disclosed
in the normal course of employment with the Company or pursuant to any
court order or other legal process.
c) The Executive will not, for a period of three (3) years after the
Termination Date, directly or indirectly solicit, or directly or
indirectly assist any third party in soliciting, any employee of the
Company or any of its subsidiaries or affiliated companies to join the
employ of any entity that competes with the Company or any of its
subsidiaries or affiliated companies.
9) Successors
a) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all
of the
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business and/or assets of the Company, by agreement in form and substance
satisfactory to the Executive, to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company
would be required to perform it if no such Change in Control had taken
place. Failure of such successor entity to enter into such agreement
prior to the effective date of any such succession (or, if later, within
three business days after first receiving a written request for such
agreement) will constitute a breach of this Agreement and will entitle
the Executive to terminate his employment pursuant to Section 2)a)iv)
above and to receive the payments and benefits provided under Sections
4), 5) and 6) above.
b) This Agreement will inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive
dies while any amounts are payable hereunder, all such amounts, unless
otherwise provided herein, will be paid in accordance with the terms of
this Agreement to his successors, heirs, distributees, devisees, legatees
or other designees or, if there is no such designee, to his estate.
10) Notices
For the purposes of this Agreement, notices and all other communications
provided for herein will be in writing and will be deemed to have been duly
given when delivered or mailed by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to the Executive:
0000 Xxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
If to the Company:
Sabre
Attn: Corporate Secretary
P. O. Box 619615
Mail Drop 4204
XXX Xxxxxxx, Xxxxx 00000-0000
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address
will be effective only upon receipt.
11) Governing Law THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF
THIS AGREEMENT WILL BE GOVERNED BY AND ENFORCED UNDER THE LAWS OF THE STATE
OF DELAWARE.
12) Miscellaneous No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such
other party will be deemed
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a waiver of similar or dissimilar provisions or conditions at the same or
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 (or in any employment or other written agreement relating to the
Executive).
13) Separability The invalidity or unenforceability of any provisions of this
Agreement will not affect the validity or enforceability of any other
provision of this Agreement, which will remain in full force and effect.
14) Non-assignability This Agreement is personal in nature and neither of the
parties hereto will, without the consent of the other, assign or transfer
this Agreement or any rights or obligations hereunder, except as provided in
Section 9) above. Without limiting the foregoing, the Executive's right to
receive payments hereunder will not be assignable or transferable, whether
by pledge, creation of a security interest or otherwise, other than a
transfer by his will or by the laws of descent or distribution, and in the
event of any attempted assignment or transfer by Executive contrary to this
Section, the Company will have no liability to pay any amount so attempted
to be assigned or transferred to any person other than the Executive or, in
the event of his death, his designated beneficiary or, in the absence of an
effective beneficiary designation, the Executive's estate.
15) Termination This Agreement will remain in effect for three (3) years from
the Effective Date. It will be automatically renewed for successive three
(3) year periods unless, no fewer than one hundred eighty (180) days prior
to the expiration of a three (3) year period, the Company notifies the
Executive in writing of its intent to terminate the Agreement; except that
such termination will not be made, and if made will have no effect, (a) as
to any payments or benefits payable hereunder to an Executive whose
employment has terminated pursuant to Section 2)a) or 2)b) above, or (b)
within two (2) years after a Change in Control or (c) during any period of
time when the Company has knowledge that any third person has taken steps
reasonably calculated to effect a Change in Control until, in the opinion of
the Board (as constituted at the time of the termination of this Agreement),
the third person has abandoned or terminated its efforts to effect a Change
in Control.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered as of the day and year first above set forth, thereby mutually and
voluntarily agreeing that this Agreement supersedes and replaces any prior
similar agreements for such termination benefits.
SABRE HOLDINGS CORPORATION
By: /s/ XXXXXXX X. XXXXXXX
------------------------------------------------------------
Xxxxxxx X. Xxxxxxx
Senior Vice-President, Chief Financial Officer and Treasurer
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SABRE INC.
By: /s/ XXXXXXX X. XXXXXXX
----------------------------------------------------
Xxxxxxx X. Xxxxxxx
Executive Vice-President and Chief Financial Officer
Xxxxxx X. Xxxxxxxxx
Signed: /s/ XXXXXX X. XXXXXXXXX
---------------------------------------
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