EMPLOYMENT AGREEMENT
Exhibit
10.1
AMENDED
AND RESTATED
Avis
Budget Group, Inc. (the "Company") and Xxxxxx X. Xxxxxx (the
"Executive") are parties to this certain Employment Agreement
amended and restated as of December 29, 2008 (this
"Agreement").
WHEREAS,
Cendant Corporation (which has been renamed Avis Budget Group, Inc.) and the
Executive were parties to a certain Employment Agreement effective as of April
14, 2003 (the "2003 Agreement"); and
WHEREAS,
Cendant Corporation (which has been renamed Avis Budget Group, Inc.) and the
Executive amended the 2003 Agreement in June, 2006, effective August 1, 2006
(the "2006 Agreement"); and
WHEREAS,
the Company and the Executive desire to amend and restate the 2006 Agreement
in
its entirety as set forth herein.
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 that this Agreement is amended and restated to read as
follows:
SECTION
I
EFFECTIVENESS
This
Agreement shall be effective as of August 1, 2006 (the "Effective
Date").
SECTION
II
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 as provided in Section III below
and upon the terms and conditions provided in this Agreement. During
the Period of Employment, the Executive shall serve as Chief Executive Officer
of the Company and shall report to, and be subject to the direction of, the
Board of Directors of the Company (the "Board"). The
Executive shall perform such duties and exercise such supervision with regard
to
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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. 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 in Parsippany, New Jersey (the
"Business Office"), except for normal and reasonable business
travel in connection with his duties hereunder.
In
addition, effective upon the Effective Date, the Executive shall serve as
Chairman, and a member, of the Board; provided, however, that the Executive's
continued service as a member of the Board shall at all times remain subject
to
any and all nomination and election procedures in accordance with the Company's
by-laws.
SECTION
III
PERIOD
OF EMPLOYMENT
The
period of the Executive's employment under this Agreement (the "Period
of Employment") shall begin on the Effective Date and shall end on the
fourth anniversary of the Effective Date (the "Term"), subject
to earlier termination as provided in this Agreement. Effective upon
the expiration of the Term, Executive's employment hereunder shall be deemed
to
be automatically extended, upon the same terms and conditions, for an additional
period of one year (the "Additional Term") commencing upon the
expiration of the Term unless either party shall have given written notice
to
the other, at least six (6) months prior to the expiration of the Term of its
intention not to extend the Period of Employment hereunder; provided that any
such notice of non-extension delivered by the Company to Executive shall be
deemed to constitute a Constructive Discharge (as defined below) of the
Executive.
SECTION
IV
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.
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(b) Annual
Incentive Awards. The Executive shall be eligible to earn a
target Annual Bonus for each fiscal year of the Company ending during the Period
of Employment (each, an "Annual Bonus") equal to 150% of the
Executive's Base Salary for such fiscal year, if the Company achieves the target
performance goals established by the Compensation Committee (the
"Committee") for such fiscal year. The
Committee may establish such metrics whereby the Executive may earn an Annual
Bonus in excess of the target Annual Bonus or an Annual Bonus less than the
target Annual Bonus.
Any
Annual Bonus that becomes payable to the Executive pursuant to this Section
shall be paid to the Executive as soon as reasonably practicable following
receipt by the Board of the audited consolidated financial statements of the
Company for the relevant fiscal year, but in no event later than two and a
half
(2 1/2) months following the end of the applicable fiscal year in which such
Annual Bonus was earned. The Executive shall be entitled to receive
any Annual Bonus that becomes payable in a lump sum cash payment, or, at his
election, in any form that the Board generally makes available to the Company's
executive management team; provided that any such election is made by the
Executive in compliance with Section 409A ("Section 409A") of
the Internal Revenue Code of 1986, as amended (the "Code") and
the regulations promulgated thereunder.
(c) Long-Term
Incentive Awards. The parties hereby acknowledge that (i)
pursuant to the 2006 Agreement, the Executive was awarded a long-term incentive
equity award with a grant date value equal to $6 million (the
"Initial Grant") and (ii) the Initial Grant is
subject to such terms and conditions, including relating to vesting conditions,
as determined by the Committee (but subject to accelerated vesting in accordance
with Section VIII below), and is evidenced in a written grant agreement and
granted pursuant to a stock plan of the Company. During the Period of
Employment, the Executive shall be eligible for long term incentive awards
as
determined by the Committee in its discretion.
(d) 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 a basis no less favorable than as provided to any other
executive of the Company. 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 program. Without
limiting the generality of the foregoing, the Executive will be provided
benefits and perquisites on such terms and conditions as determined by the
Board, which determination will be based in part upon comparisons to chief
executive officers of public companies of comparable size and industry to the
Company and by comparison to those benefits the Executive received pursuant
to
the 2003 Agreement.
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(e) Further
Consideration. The Company acknowledges and agrees to provide the
Executive with the following benefits notwithstanding anything herein to the
contrary. Upon the Executive's termination of employment from the
Company and its subsidiaries for any reason, including, without limitation,
due
to or following any non-renewal of this Agreement, Resignation, or termination
by the Company with or without Cause, the Executive and each person who is
his
covered dependent at such time under each applicable benefit plan sponsored
or
provided by the Company shall remain eligible to continue to participate in
all
of such plans (as they may be modified from time to time with respect to all
senior executive officers), (the "Post-Employment Plans") until
the end of the plan year in which the Executive reaches, or would have reached,
age seventy-five (75) (such benefits, the "Post-Employment
Benefits"). The Executive is currently eligible to
participate in the following Post-Employment Plans: Executive Physical Exams,
Medical Expense Reimbursement Plan (MERP), Medical Insurance, Dental Insurance,
Group Life Insurance (up to $1 million coverage on Executive's life), Vision
Service Plan. Coverage under such Post-Employment Plans shall be
subject to the Executive and/or such dependents, as applicable, continuing
to
pay the applicable employee portion of any premiums, co-payments, deductibles
and similar costs. Solely with respect to the Executive's dependents,
such coverage shall terminate upon such earlier date if and when they become
ineligible for any such benefits under the terms of such plans and provided,
that once the Executive or his dependents become eligible for Medicare or any
other government-sponsored medical insurance plan, or if the Executive is
eligible to participate in any other company's medical insurance plan as an
employee after the termination of his employment, the Executive or his
dependents shall utilize such government plan or other company plan, and the
Company's insurance obligations as part of the Post-Employment Benefits
hereunder shall become secondary to such government plan or other company
plan. Notwithstanding the foregoing, the Company may meet any of its
foregoing obligations under the Post-Employment Plans by paying for, or
providing for the payment of, such benefits directly or through alternative
plans or individual policies which are no less favorable in all material
respects (with respect to both coverage and cost to the Executive) to the
Post-Employment Plans. If the Company meets its obligations by paying
for the Post-Employment Plans pursuant to the foregoing sentence, any
reimbursements required to be made by the Company to the Executive shall be
made
on or before the last day of the calendar year following the calendar year
in
which the expense was incurred. In addition, in no event shall the
Post-Employment Benefits provided or the amount of the expenses eligible for
reimbursement during one calendar year affect the Post-Employment Benefits
provided or the amount of expenses eligible for reimbursement in any other
calendar year.
SECTION
V
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. Further, the Executive will receive access to Company
aircraft or
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alternative
air transportation, subject to applicable Company policies.
SECTION
VI
DEATH
AND DISABILITY
The
Period of Employment shall end upon the Executive's death. If the
Executive experiences a Disability (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. The Company's obligation to make payments to the
Executive under this Agreement shall cease as of such date of termination,
except for Base Salary and any Annual Bonus earned but unpaid as of the date
of
such termination (the "Accrued Obligations"), and, in such
event (a) each of the Executive's then outstanding options to purchase shares
of
Company common stock that were granted prior to the Effective Date and options
to purchase shares of Wyndham Worldwide Corporation common stock (and its
successors) (the "Pre-Existing Options") shall become
immediately and fully vested and exercisable (to the extent not already vested)
and, shall remain exercisable during the extended post-termination exercise
period set forth in the 2003 Agreement, (b) each option to purchase shares
of
the Company common stock or stock appreciation right granted on or after the
Effective Date shall become immediately and fully vested and exercisable (to
the
extent not already vested) and, notwithstanding any term or provision relating
to such option to the contrary, 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, (c) all other
long-term equity awards (including, without limitation, the Initial Grant)
then
outstanding shall become immediately vested, and (d) the Company shall pay
the
Executive (or his surviving spouse, estate or personal representative, as
applicable) a cash amount equal to the Executive's target Annual Bonus for
the
year in which the Executive is terminated multiplied a fraction the numerator
of
which is the total number of days during the applicable calendar year during
which the Executive was employed by the Company and the denominator of which
is
365.
SECTION
VII
EFFECT
OF TERMINATION OF EMPLOYMENT
(a) Without
Cause Termination and Constructive Discharge. Subject to the
provisions of Section VII(d), if the Executive's employment terminates during
the Period of Employment and, in the event of a Corporate Transaction, prior
to
January 15th of
the year following the year in which the Corporate Transaction occurs, due
to
either a Without Cause Termination or a Constructive Discharge (each as defined
below): (i) the Accrued Obligations shall be paid to the Executive in accordance
with paragraph (d) below, (ii) the Company shall pay the Executive (or his
surviving spouse, estate or personal representative, as applicable), within
five (5) days following the Release Date (as defined in paragraph (d)
below) (or, in the event that the Release Date (as defined in Section VII(d)
below is extended in accordance with the dispute provisions set forth in Section
VII(d) below, upon
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resolution
of the dispute), 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 Annual Bonus; (iii) each of the Executive's then outstanding Pre-Existing
Options shall become immediately and fully vested and exercisable (to the extent
not already vested) and in accordance with the terms and conditions applicable
to such options set forth in the 2003 Agreement, and shall remain
exercisable for the extended post-termination exercise period set forth in
the
2003 Agreement; (iv) each option to purchase shares of the Company common
stock or stock appreciation right granted on or after the Effective
Date shall become immediately and fully vested and exercisable (to the
extent not already vested) and, notwithstanding any term or provision thereof
to
the contrary, 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, and (v) all other
long-term equity awards (including, without limitation, restricted stock units)
shall become immediately vested.
(b) Termination
for Cause; Resignation. If the Executive's employment terminates
due to a Termination for Cause or a Resignation, the Accrued Obligations shall
be paid to the Executive in accordance with paragraph (d)
below. Outstanding stock options and other equity awards held by the
Executive as of the date of termination shall be treated in accordance with
their terms. 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 termination of the Executive by the Company as a
result of (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 or (e) the
Executive purposefully or negligently makes (or has been found to have made)
a
false certification to the Company pertaining to its financial
statements.
(ii) "Constructive
Discharge" means (a) any material failure of the Company to fulfill its
obligations under this Agreement (including without limitation any material
reduction of the Base Salary, as the same may be increased during the Period
of
Employment, or any material reduction in any other material element of
compensation) or any material diminution to the Executive's duties and
responsibilities relating to service as an executive officer, (b) the Business
Office is relocated to any location that increases the Executive's one-way
commute by more than 30 miles or the Business Office is relocated to New York
City provided, in each case, that such
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relocation
constitutes a material negative change to the Executive's employment
relationship, (c) during the Period of Employment, the Executive is not the
Chief Executive Officer and the most senior executive officer of the Company;
or
does not report directly to the Board, (d) the Company provides notification
under Section III of this Agreement that it is not extending the Agreement
for
an Additional Term, provided that the Executive is willing and able to extend
the Agreement and to continue providing services under the Agreement,
(e) the Additional Term expires and the Company does not offer to extend
this Agreement, as amended through such expiration date on substantially similar
terms to then-existing terms and conditions, for a period of not less than
2
years and not more than 4 years, provided that the Executive is willing and
able to extend the Agreement and to continue providing services under the
Agreement, (f) the occurrence of a "Corporate Transaction" as defined
below, (g) the Executive is not nominated to be a member of the Board, or
(h) failure of a successor to the Company to assume this Agreement in accordance
with Section XIV below. The Executive shall provide the Company a
written notice of his intention to terminate employment pursuant to a
Constructive Discharge within 60 days after the Executive knows or has reason
to
know of the occurrence of any such event which notice describes the
circumstances being relied on for the termination with respect to this
Agreement. Notwithstanding the above, the Company shall have thirty (30)
days after receipt of such notice to remedy the event prior to the termination
for Constructive Discharge and, upon the timely remedy of such event, such
event
shall no longer constitute a basis for Constructive Discharge and the
Executive's notice of termination pursuant to a Constructive Discharge shall
be
rescinded.
(iii) "Without
Cause Termination" or "Terminated Without
Cause" means termination of the Executive's employment by the Company
other than due to death, Disability, or Termination for Cause.
(iv) "Resignation"
means a termination of the Executive's employment by the Executive, other than
in connection with a Constructive Discharge or other than due to death or
Disability.
(v) "Corporate
Transaction" means either:
(1) any
"person," as such term is used in Sections 13(d) and 14(d) of the Securities
and
Exchange Act, as amended (the "Exchange Act")
(other than (A) the Company, (B) any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, and (C) any
corporation owned, directly or indirectly, by the stockholders of the Company
in
substantially the same proportions as their ownership of Company common stock),
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
50% or more of the combined voting power of the Company's then outstanding
voting securities (excluding any person who becomes such a beneficial owner
in
connection with a transaction immediately following
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which
the
individuals who comprise the Board immediately prior thereto constitute at
least
a majority of the Board of the entity surviving such transaction or, if the
Company or the entity surviving the transaction is then a subsidiary, the
ultimate parent thereof); or
(2) the
following individuals cease for any reason to constitute a majority of the
number of directors then serving: individuals who, on the Effective Date,
constitute the Board and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation, relating to the
election of directors of the Company) whose appointment or election by the
Board
or nomination for election by the Company's stockholders was approved or
recommended by a vote of at least one-half (1/2) of the directors then still
in
office who either were directors on the Effective Date or whose appointment,
election or nomination for election was previously so approved or
recommended.
(d) Conditions
to Payment and Acceleration; Section 409A.
(i) Notwithstanding
anything contained herein to the contrary, to the extent required in order
to
avoid accelerated taxation and/or tax penalties under Section 409A, the
Executive shall not be considered to have terminated employment with the Company
for purposes of this Agreement and no payments shall be due to the Executive
under Section VII of this Agreement until the Executive would be considered
to
have incurred a “separation from service” from the Company within the meaning of
Section 409A.
(ii) All
payments due to the Executive under this Section VII shall be subject to, and
contingent upon, the Executive (or his beneficiary or estate) (x) executing
a
release of claims against the Company and its affiliates (in such reasonable
form determined by the Company in its sole discretion) within forty-five days
following the Executive's separation from service (or, in the event of a
dispute, upon resolution of the dispute, provided that such extension does
not
result in, as applicable, the disputed payments constituting deferred
compensation within the meaning of Section 409A or the imposition of additional
taxes under Section 409A) and (y) failing to revoke such release (the date
on
which the release becomes irrevocable, the "Release
Date").
(iii) To
the
extent required in order to avoid accelerated taxation and/or tax penalties
under Section 409A, amounts that would otherwise be payable and benefits that
would otherwise be provided pursuant to this Agreement during the six-month
period immediately following the Executive’s termination of employment
shall instead be paid on the first business day after the date that is six
months following the Executive’s termination of employment (or upon the
Executive’s death, if earlier).
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(iv) The
intent of the Parties is that payments and benefits under this Agreement comply
with Section 409A and, accordingly, to the maximum extent permitted, this
Agreement shall be interpreted and administered to be in compliance therewith.
Each amount to be paid or benefit to be provided under this Agreement shall
be
construed as a separate identified payment for purposes of Section 409A and
any
payments described in this Agreement that are due within the "short term
deferral period" as defined in Section 409A shall not be treated as deferred
compensation unless applicable law requires otherwise.
(v) The
payments due to the Executive under this Section VII 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
VIII
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 information 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, the Executive shall
cooperate as reasonably requested with the Company and its affiliates in
connection with any claims or legal actions in which the Company or any of
its affiliates is or may become a party. The 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 this
Agreement or 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. 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
as may be required by law. 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. 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 a two (2) year period thereafter (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.
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(ii) During
the Restricted Period, the Executive shall not make any statements or perform
any acts intended to have the effect of advancing the interest of any existing
competitors (or any entity the Executive knows to be a prospective competitor)
of the Company or any of its affiliates or in any way injuring the
interests of the Company or any of its affiliates. During the
Restricted Period, the Executive, without prior express written approval by
the
Board, shall not engage in, or directly or indirectly (whether for compensation
or otherwise) own or hold proprietary interest in, manage, operate, or control,
or join or participate in the ownership, management, operation or control of,
or
furnish any capital to or be connected in any manner with, any party which
competes in any way or manner with the business of the Company or any of its
affiliates, as such business or businesses may be conducted from time to time,
either as a general or limited partner, proprietor, common or preferred
shareholder (other than being less than a 5% shareholder in a publicly
traded company), officer, director, agent, employee, consultant, trustee,
affiliate, or otherwise. 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 those countries in the world where
the
Company then conducts business or has a plan to conduct business.
(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 operation 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 any person with which the Executive may be affiliated,
to
engage, employ or compensate, any employee of the Company or any of its
affiliates. The Executive hereby represents and warrants that the
Executive has not entered into any agreement, understanding or arrangement
with
any employee of the Company or any of its affiliates pertaining to any business
in which the Executive has participated or plans to participate, or to the
employment, engagement or compensation of any such employee.
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(v) For
the
purposes of this Agreement, proprietary interest means legal or equitable
ownership, whether through stock holding or otherwise, of an equity interest
in
a business, firm or entity or ownership of more than 5% of any class of equity
interest in a publicly-held company and the term "affiliate" shall include
without limitation all subsidiaries and material licensees of the
Company.
(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 VIII 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 VIII.
(e) The
period of time during which the provisions of this Section VIII 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 VIII 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
IX
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 (including payment of expenses in advance
of
final disposition of a proceeding).
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SECTION
X
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 VII hereof
and (ii) it shall be determined that any payment 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
X) (a "Payment") would be subject to the excise tax imposed by
Section 4999 of the Code, 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 X,
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, provided, however, that the payments or
benefits to be eliminated in effecting such reduction shall be agreed upon
between the Company and the Executive. All determinations required to
be made under this Section X, 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 certified public accounting firm as may be designated
by the Company. In no event will the Gross-Up Payment be made later
than forty-five (45) days following the date on which the Executive remits
the
Excise Tax to the Internal Revenue Service.
SECTION
XI
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.
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SECTION
XII
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
XIII
EFFECT
OF PRIOR AGREEMENTS
Except
as
otherwise specifically set forth herein, this Agreement shall supersede any
prior agreements between the Company, and the Executive (including but not
limited to the 2003 Agreement and 2006 Agreement) hereof, and any such prior
agreement shall be deemed terminated without any remaining obligations of either
party thereunder.
SECTION
XIV
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 or other entity which assumes this Agreement and all obligations
and
undertakings of the Company hereunder. If (i) there is a merger,
consolidation, sale of all or substantially all of the Company's assets, or
other business combination involving the Company, or (ii) all or substantially
all of the stock of the Company is acquired by another company, the term "the
Company" shall mean the successor to the Company's business or assets referred
to in (i) above or such company referred to in (ii) above, and this Agreement
shall continue in full force and effect. Notwithstanding the
foregoing, the Company shall require any successor thereto (whether direct
or
indirect, by purchase, merger, consolidation, or otherwise), by agreement in
form and substance reasonably 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 succession had
taken
place.
SECTION
XV
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
13
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
XVI
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
XVII
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 VIII 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 expenses
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.
14
(d) The
parties agree that this Section XVII has been included to rapidly and
inexpensively resolve any disputes between them with respect to this Agreement,
and that this Section XVII shall be grounds for dismissal of any court action
commenced by either party with respect to this Agreement, other than
post-arbitration 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
XVIII
SURVIVAL
Sections
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
XIX
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 invalid 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 jurisdiction 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.
*****
15
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the
Effective Date.
/s/
Xxxx Xxxxxxxxxx
By:
Xxxx
Xxxxxxxxxx
Title: Executive
Vice
President, Human Resources
/s/ Xxxxxx
X. Xxxxxx
Xxxxxx
X.
Xxxxxx
Each
of
the undersigned subsidiaries of the Company hereby guarantees to the Executive
the prompt and complete payment and performance by the Company when due of
the
Company’s obligations to make payments due to the Executive that are delayed in
accordance with Section VII(d)(iii) in consideration for the services the
Executive renders to such subsidiary in his role as Chief Executive Officer
of
Avis Budget Group, Inc.; provided that, as to any subsidiary, this guarantee
shall be null and void and have no effect whatsoever with respect to such
subsidiary for any period (including as of the Effective Date) during which
this
guarantee conflicts with or constitutes a breach of any obligation of such
subsidiary under any currently applicable agreement or other obligation
applicable to such subsidiary or any applicable law, rule or regulation (whether
currently applicable or applicable at any time in the future).
IN
WITNESS WHEREOF, the undersigned have executed this Guarantee as of the
Effective Date.
AVIS
BUDGET CAR RENTAL,
LLC
AVIS
BUDGET HOLDINGS, LLC
AVIS
BUDGET FINANCE, INC.
AVIS
CAR RENTAL GROUP,
LLC
ARACS
LLC
AVIS
RENT A CAR SYSTEM,
LLC
AVIS
ASIA AND PACIFIC,
LIMITED
AVIS
CARIBBEAN, LIMITED
AVIS
ENTERPRISES, INC.
AVIS
GROUP HOLDINGS, LLC
AVIS
INTERNATIONAL, LTD.
PF
CLAIMS MANAGEMENT, LTD
AB
CAR RENTAL SERVICES,
INC.
AVIS
OPERATIONS, LLC
BGI
LEASING, INC.
RUNABOUT,
LLC
WIZARD
SERVICES, INC.
/s/
Xxxx Xxxxxxxxxx
By:
Xxxx
Xxxxxxxxxx
Title: Executive
Vice
President, Human Resources
16
BUDGET
RENT A CAR SYSTEM,
INC.
BUDGET
TRUCK RENTAL, LLC
PR
HOLDCO, INC.
/s/ Xxxxxx
Xxxxxxxxx
By:
Xxxxxx
Xxxxxxxxx
Title: Senior
Vice
President, Human Resources
17