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Exhibit 10.2 EXECUTION VERSION
EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT (the "Agreement") is dated as of
January 6, 2009, by and between Orbitz Worldwide, Inc. (the
"Company") and Barnaby Harford ("Executive").
WHEREAS,
the Company desires to employ Executive, and Executive desires to
serve the Company, in accordance with the terms and conditions of
this Agreement.
NOW
THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:
1.
Term of Employment . Subject to the provisions of
Section 9 of this Agreement, Executive shall be employed by
the Company for a period commencing on January 6, 2009 (the
"Effective Date") and ending on January 6, 2013 (the
"Employment Term") on the terms and subject to the conditions set
forth in this Agreement; provided , however , that
commencing with January 6, 2013 and on each January 6
thereafter (each an "Extension Date"), the Employment Term shall be
automatically extended for an additional one-year period, unless
the Company or Executive provides the other party hereto
180 days prior written notice before the next Extension Date
that the Employment Term shall not be so extended.
2.
Position .
(a) During
the Employment Term, Executive shall serve as the Chief Executive
Officer of the Company. In such position, Executive shall have such
duties and authorities consistent with the position of Chief
Executive Officer, as described in the Company’s By-Laws as
currently in effect (and as may be expanded, but not reduced, in
the future), and such other duties commensurate with the position
of Chief Executive Officer as shall be determined from time to time
by the Board of Directors of the Company (the "Board"). Executive
shall report to the Board, and all employees of the Company shall
report to Executive or his designee. Effective as of the Effective
Date, Executive will become a member of the Board without
additional compensation. Thereafter, during the Employment Term,
the Company shall nominate Executive to be elected to the Board and
shall use its reasonable best efforts, subject to fiduciary
obligations of the Board, to have Executive re-elected to the
Board. Upon the termination of Executive’s employment for any
reason, Executive shall resign from the Board (and any committees
thereof) and the board of directors (and any committees thereof) of
any of the Company’s affiliates effective as of the effective
date of such termination.
(b) During
the Employment Term, Executive will devote Executive’s full
business time and efforts to the performance of Executive’s
duties hereunder and will not engage in any other business,
profession or occupation for compensation or otherwise which would
conflict or interfere with the rendition of such services either
directly or indirectly, without the prior written consent of the
Board; provided that nothing herein shall preclude
Executive, (i) subject to the prior approval of the Board,
from accepting appointment to or continuing to serve on any board
of directors or advisory committee of any business corporation or
from accepting
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appointment to or continuing to serve on any board of directors or
trustees of charitable, civic, educational, professional, community
or industry organizations (Executive has previously disclosed to
the Company all such entities with which Executive is currently so
affiliated), (ii) from participating in charitable, civic,
educational, professional or industry organizations or
(iii) from managing Executive’s passive personal
investments; provided in each case, and in the aggregate,
that such activities do not conflict or interfere with the
performance of Executive’s duties hereunder or conflict with
Section 10.
(c) Subject
to the provisions hereof, Executive’s principal place of
employment during the Employment Term shall be in Chicago,
Illinois.
(d) Executive
represents and warrants that, as of the Effective Date, he is a
lawful permanent resident of the United States and is eligible
under the immigration laws of the United States to be employed by
the Company under the terms and conditions described herein.
3.
Base Salary . During the Employment Term, the Company shall
pay Executive a base salary at the annual rate of $625,000, payable
in regular installments in accordance with the Company’s
usual payment practices. Executive shall be entitled to such
increases in Executive’s Base Salary, if any, as may be
determined from time to time in the sole discretion of the Board;
provided that Executive’s Base Salary shall be
increased to $675,000 on the first anniversary of the Effective
Date. During the Employment Term, Executive’s Base Salary
shall not be reduced, except pursuant to temporary across-the-board
salary reductions that similarly affect all officers of the Company
reporting directly to Executive and which are effective on or after
the first anniversary of the Effective Date. Executive’s
annual base salary, as in effect from time to time, is hereinafter
referred to as the "Base Salary." Notwithstanding the foregoing,
any such reduction of Base Salary shall not be taken into account
for the purpose of determining the amount of severance owed to
Executive under Section 9 hereof.
4.
Annual Cash Bonus . Executive will be eligible to receive an
annual cash incentive compensation award in respect of each fiscal
year of the Company during the Employment Term, commencing with
2009, with a target payment equal to 100% (and a maximum payment of
200%) of earned Base Salary during each such fiscal year, subject
to the terms and conditions of the Company’s annual bonus
plan, and further subject to such performance goals, criteria or
targets reasonably determined by the Board (or the compensation
committee thereof (the "Committee")) in its sole discretion, in
respect of each such fiscal year (each such annual bonus, an
"Annual Bonus"). As the Annual Bonus is subject to the attainment
of performance criteria, it may be paid, to the extent earned or
not earned, at below-target levels, and above target levels (with a
maximum of 200% of earned Base Salary for the applicable fiscal
year). Notwithstanding the foregoing, so long as Executive remains
employed through June 30, 2009, Executive’s Annual Bonus
with respect to the first half of fiscal year 2009 shall not be
less than two-thirds of Executive’s earned Base Salary from
the Effective Date through June 30, 2009 and, with respect to
the full fiscal year portion of the Annual Bonus, one-third of
Executive’s earned Base Salary from the Effective Date
through June 30, 2009 (collectively, the "Guaranteed Bonus"). The
Guaranteed Bonus shall be paid to Executive in cash prior to two
and one-half (2 1 /2) months after the end of the 2009
fiscal year. The Annual Bonus in respect of each fiscal year of the
Company during the Employment Term (which, for the avoidance of
doubt, does not
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include the Guaranteed Bonus), if any, shall be paid to Executive
prior to two and one-half (2 1 /2) months after the end
of the applicable fiscal year.
5.
Long-Term Incentive Awards .
(a)
Initial Grant . As of the Effective Date, the Company shall
grant to Executive, pursuant to the Orbitz Worldwide, Inc. 2007
Equity and Incentive Plan (the "Equity and Incentive Plan"), a
nonqualified stock option to purchase 3,015,682 shares of Company
stock (the "Options").
(b)
Terms and Conditions Governing Initial Grant . Options
granted to Executive as part of the initial grant shall:
(i) have a seven (7)-year term; (ii) subject to
Executive’s continued employment, vest over the four-year
period beginning on the Effective Date (25% of the stock options
shall vest on the first anniversary of the Effective Date, and the
remaining 75% of the stock options shall vest ratably over the
subsequent thirty-six (36) month period, with the final
portion of Options vesting on the day prior to the fourth
anniversary of the Effective Date); and (iii) be subject to
the terms and conditions of the applicable stock option award
agreement under which such grant is made, a copy of which is
attached hereto as Exhibit A , and the Equity and
Incentive Plan. Notwithstanding anything herein to the contrary, in
the event of any inconsistency between either the terms and
conditions of the applicable stock option award agreement described
in this Section 5(b) and the terms and conditions set forth in this
Agreement, the provisions of this Agreement shall govern.
(c)
Initial Grant – Termination of Employment .
(i) In
the event Executive’s employment is terminated for any reason
other than as a result of death, Disability (as defined in
Section 9(b)), without Cause (as defined in Section 9(a))
by the Company, Constructive Termination (as defined in
Section 9(c)), or pursuant to Sections 9(e) or (f)(i) as a
result of the Company’s election not to extend the Employment
Term pursuant to Section 1, each vested Option outstanding at
the time of such termination of employment shall remain exercisable
until the earlier of ninety (90) days following such
termination or the expiration of such Option. In the event
Executive’s employment terminates pursuant to Section 9(f)(i)
as a result of the Company’s election not to extend the
Employment Term pursuant to Section 1, or as a result of death
or Disability, each vested Option outstanding at the time of such
termination of employment shall remain exercisable until the
earlier of the first anniversary of such termination or the
expiration date of such Option.
(ii) In
the event Executive’s employment is terminated by the Company
without Cause or for Disability, terminates as a result of
Executive’s death, or if Executive resigns as a result of a
Constructive Termination, subject to, except in the case of death
or Disability, Executive’s execution and delivery of a
separation and release agreement that is no longer subject to
revocation under applicable law, substantially in the form attached
hereto as Exhibit B (the "General Release"), a number
of previously unvested Options shall vest equal to the number of
Options that would have vested in the eighteen (18)-month period
following such termination if Executive had remained in employment
and each vested Option outstanding at the time of such termination
of employment shall remain exercisable until the earlier of the
first anniversary of such termination or the expiration date of
such Option (or if the condition of executing and
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delivering the General Release is not satisfied, then until the
earlier of ninety (90) days following such termination or the
expiration date of such Option).
(iii) In
the event Executive resigns his employment pursuant to Section 9(e)
hereof following a reacquisition of the Company, directly or
indirectly, by Travelport Limited (the "Reacquisition"), then,
subject to Executive’s execution and delivery of the General
Release a number of previously unvested Options shall vest equal to
the number of Options that would have vested in the twelve
(12)-month period following such termination if Executive had
remained in employment and each vested Option outstanding at the
time of such termination of employment shall remain exercisable
until the earlier of the first anniversary of such termination or
the expiration date of such Option.
(iv) Notwithstanding
anything herein to the contrary, in the event Executive’s
employment is terminated by the Company without Cause, or if
Executive resigns as a result of a Constructive Termination, and
such termination or resignation is in connection with, or within
twenty-four (24) months following a Change in Control or
Executive’s employment is terminated by the Company without
Cause or if Executive resigns as a result of a Constructive
Termination and a Change in Control is consummated within ninety
(90) days following such termination of employment or
resignation and such termination of employment or resignation as a
result of a Constructive Termination is in contemplation of a
Change in Control, then, subject to Executive’s execution and
delivery of the General Release and compliance with all terms and
conditions contained herein, all outstanding Options shall vest in
full and each vested Option outstanding at the time of such
termination of employment shall remain exercisable until the
earlier of the first anniversary of such termination or the
expiration date of such Option.
(v) Notwithstanding
the foregoing, if Executive’s employment is terminated by the
Company without Cause, or if Executive resigns as a result of a
Constructive Termination (other than the diminution of duties or
responsibilities directly resulting from the Reacquisition and the
Company becoming a non-publicly traded subsidiary of Travelport
Limited), and such termination or resignation is in connection
with, or within twelve (12) months following the Reacquisition
or Executive’s employment is terminated by the Company
without Cause or if Executive resigns as a result of a Constructive
Termination and the Reacquisition occurs within ninety
(90) days following such termination of employment of
employment or resignation and such termination of employment or
resignation is in contemplation of the Reacquisition, then, subject
to Executive’s execution and delivery of the General Release
and compliance with all terms and conditions contained herein, all
outstanding Options shall vest in full and each vested Option
outstanding at the time of such termination of employment shall
remain exercisable until the earlier of the first anniversary of
such termination or the expiration date of such Option.
(d) Notwithstanding
anything herein to the contrary, in the event (X) Executive is
terminated for Cause pursuant to Section 9(a) and such termination
for Cause is based on Executive’s willful misconduct
involving a financial matter of the Company, including, without
limitation, Executive purposefully or knowingly making a false
certification to the Company pertaining to its financial
statements, (Y) of Executive’s material breach of the
restrictive covenants set forth in Sections 10 or 11 or (Z) of
Executive’s material violation of the Company’s Code of
Conduct or Code of Ethics, the Board may determine in good faith
that:
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(A) any
portion of the Options granted pursuant to Section 5(a) to
Executive and then held by Executive shall be automatically
forfeited,
(B) any
shares of Company common stock acquired pursuant to any exercise of
Options that occurred within two (2) years prior to
(x) such termination of employment for Cause or (y) such
breach, as applicable, and then held by Executive shall be subject
to repurchase by the Company at the exercise price paid for such
shares upon exercise of the Options, and
(C) in
the event Executive has sold or otherwise disposed of shares of
Company common stock acquired pursuant to any exercise of
Employment Options (net of any shares withheld by the Company or
sold in connection with a broker-assisted exercise program at the
time of such exercise of such Employment Options for the payment of
withholding taxes) and such exercise occurred within two (2) years
prior to (x) such termination of employment for Cause or
(y) such breach, as applicable, Executive shall pay to the
Company the proceeds received from such sale or other disposition,
less the exercise price paid for the applicable shares and the
taxes paid with regard to such sale.
Notwithstanding the foregoing, in the
event Executive is terminated for Cause pursuant to Section 9(a)
and such termination for Cause is based on conduct other than
Executive’s willful misconduct involving a financial matter
of the Company, the Board may determine in good faith that the
provisions of Section 5(d)(A) through (C) shall apply to
the extent necessary for the Company to recover any damages it
incurs as a result of such conduct.
(e)
Future Long-Term Incentives . Beginning in 2009 and in each
calendar year during the Employment Term thereafter, Executive
shall be eligible to receive a long-term incentive award
commensurate with Executive’s position as the Chief Executive
Officer of the Company, in such amount and form, and subject to
such terms and conditions, as may be determined by the Committee in
its sole discretion.
6.
Employee Benefits . During the Employment Term, Executive
shall be entitled to participate in the Company’s other
employee benefit plans as in effect from time to time (collectively
"Employee Benefits"), on the same basis as those benefits are
generally made available to other executives of the Company. During
the Employment Term, Executive shall be entitled to vacation
consistent with Company practice and policy for senior level
executives, but not less than four (4) weeks’ annual
vacation (pro rated for partial years).
7.
Business Expenses . During the Employment Term, reasonable
business expenses incurred by Executive in the performance of
Executive’s duties hereunder shall be reimbursed by the
Company in accordance with Company policies.
8.
Relocation and Moving Expenses . During the six (6)-month
period beginning on the Effective Date, the Company shall pay
Executive a cash stipend of $25,000 per month to cover transitional
relocation expenses, such as housing (including apartment rental),
travel and other similar expenses. In addition, the Company shall
reimburse Executive for reasonable moving expenses incurred by
Executive and his family during their relocation from
Executive’s
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primary residence to the Company’s headquarters, such
reimbursement to be in accordance with the Company’s
relocation policy.
9.
Termination . The Employment Term and Executive’s
employment hereunder may be terminated by either party at any time
and for any reason; provided that Executive will be required
to give the Company at least thirty (30) days advance written
notice of any resignation of Executive’s employment.
Notwithstanding any other provision of this Agreement, the
provisions of this Section 9 shall exclusively govern
Executive’s rights upon termination of employment with the
Company and its affiliates.
(a)
By the Company For Cause or By Executive Other Than as a Result
of a Constructive Termination .
(i) The
Employment Term and Executive’s employment hereunder may be
terminated by the Company for Cause (as defined below) and shall
terminate automatically upon Executive’s resignation other
than as a result of a Constructive Termination or pursuant to
Section 9(f)(i); provided that Executive will be
required to give the Company at least thirty (30) days advance
written notice of a resignation other than as a result of a
Constructive Termination or pursuant to Section 9(f)(i). For
purposes of this Agreement, " Cause " shall mean
(A) Executive’s willful failure to substantially perform
Executive’s duties to the Company (other than as a result of
total or partial incapacity due to mental or physical illness or
incapacity), (B) any act of fraud, misappropriation,
embezzlement or similar conduct against the Company or any
subsidiary (other than with respect to any good faith dispute
involving Executive’s claim for reimbursement of business
expenses), (C) conviction or a plea of "no contest", "guilty"
or the equivalent thereof for (x) a felony under the laws of
the United States or any state thereof or (y) a crime
involving moral turpitude for which the potential penalty includes
imprisonment of at least one year (which conviction, due to the
passage of time or otherwise, is not subject to further appeal),
(D) Executive’s gross negligence in the performance of his
duties, (E) Executive purposefully or knowingly makes a false
certification to the Company pertaining to its financial
statements, (F) Executive’s breach of the provisions of
Sections 10 or 11 of this Agreement (excluding a breach of
Section 11(a) by a statement made by Executive in good faith
in Executive’s employment capacity) or a material breach of
the Company’s Code of Conduct, Code of Ethics or other
material policy, (G) by reason of any court or administrative
order, arbitration award or other ruling, Executive’s ability
to fully perform his duties as Chief Executive Officer or as a
member of the Board is materially impaired or (H) Executive
knowingly misleads the Board with respect to a material matter. In
the event that the Company asserts that grounds exist for
Termination for Cause, unless such grounds are egregious and have
caused the Company plain material harm, the Company shall so notify
Executive with written notice and within no less than five
(5) days, nor more than fifteen (15) days, afford Executive a
hearing before the full Board or a committee consisting of all of
the independent directors of the Board, at the Board’s
option, regarding any disputed facts. The Board or the committee of
the Board, as the case may be, shall immediately make a
determination regarding the existence of Cause upon completion of
any such hearing; provided , however , that any
determination that Cause exists shall require an affirmative
resolution of the Board or the designated committee of the Board
acted upon in accordance with applicable Company By-laws concurred
by at least a majority of the independent directors of the
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Board. Notwithstanding the foregoing, the Board, if acting in good
faith, shall be entitled to immediately and unilaterally restrict
or suspend Executive’s duties without pay pending
determination of the existence of Cause, and any such restriction
or suspension shall not be deemed the occurrence of a Constructive
Termination. The foregoing procedure, however, shall not create any
presumption of Cause actually existing during any dispute
determined under such procedure.
(ii) If
Executive’s employment is terminated by the Company for
Cause, or if Executive resigns other than as a result of a
Constructive Termination or pursuant to Section 9(f)(i),
Executive shall be entitled to receive:
(A) the Base Salary through the date
of termination, payable in accordance with the Company’s
usual payment practices; (B) any
Annual Bonus earned, but unpaid, as of the date of termination for
the immediately preceding fiscal year, paid in accordance with
Section 4 (except to the extent payment is otherwise deferred
pursuant to any applicable deferred compensation arrangement with
the Company); (C) reimbursement,
within sixty (60) days following submission by Executive to
the Company of appropriate supporting documentation) for any
unreimbursed business expenses properly incurred by Executive in
accordance with Company policy prior to the date of
Executive’s termination; provided claims for such
reimbursement (accompanied by appropriate supporting documentation)
are submitted to the Company within ninety (90) days following
the date of Executive’s termination of employment; and
(D) such Employee Benefits, if any,
as to which Executive may be entitled under the employee benefit
plans of the Company (the amounts described in clauses (A) through
(D) hereof being referred to as the "Accrued Rights").
Following such termination of Executive’s employment by the
Company for Cause or resignation by Executive other than as a
result of a Constructive Termination or pursuant to
Section 9(f)(i) hereof, except as set forth in this
Section 9(a)(ii), Executive shall have no further rights to
any compensation or any other benefits under this Agreement other
than the rights provided in Section 13(p).
(b)
Disability or Death .
(i) The
Employment Term and Executive’s employment hereunder shall
terminate upon Executive’s death and may be terminated by the
Company as a result of Executive’s Disability. For purposes
of this Agreement, "Disability" shall mean Executive becoming
physically or mentally incapacitated and therefore unable for an
aggregate of one hundred eighty (180) days during any three
hundred sixty-five (365) day period to perform
Executive’s duties. Notwithstanding the foregoing, in the
event that as a result of an earlier absence because of physical or
mental incapacity Executive incurs a "separation from service"
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within the meaning set forth in Section 409A of the Internal
Revenue Code of 1986, as amended (the "Code"), and the rules,
regulations and guidance promulgated thereunder (collectively,
"Code Section 409A"), Executive shall on such date
automatically be terminated from employment because of Disability.
(ii) Upon
termination of Executive’s employment hereunder for either
Disability or death, Executive or Executive’s estate (as the
case may be) shall be entitled to receive:
(A) the Accrued Rights;
(B) a pro rata portion of any Annual
Bonus that Executive would have been entitled to receive pursuant
to Section 4 hereof in such year based upon the percentage of
the fiscal year that shall have elapsed through the date of
Executive’s termination of employment, payable when such
Annual Bonus would have otherwise been payable to Executive
pursuant to Section 4 had Executive’s employment not
terminated (the "Pro-Rata Bonus"); and
(C) vesting of any equity-based
awards then held by Executive with respect to the Company or its
affiliates as, and to the extent, described in Section 5 or in
the definitive documentation related to such awards. Following
Executive’s termination of employment due to death or
Disability, except as set forth in this Section 9(b)(ii),
Executive shall have no further rights to any compensation or any
other benefits under this Agreement other than the rights provided
in Sections 13(p) and (q).
(c)
By the Company Without Cause or Resignation by Executive as a
result of Constructive Termination not in connection with a Change
in Control .
(i) The
Employment Term and Executive’s employment hereunder may be
terminated by the Company without Cause or by Executive as a result
of a Constructive Termination.
(ii) For
purposes of this Agreement, a "Constructive Termination" shall be
deemed to have occurred upon (A) any reduction in
Executive’s Base Salary or target Annual Bonus, except for
any reduction not to exceed ten percent (10%) of the
Executive’s Base Salary or target Annual Bonus (as each may
be increased from time to time and without consideration of any
prior reduction), provided such reduction is pursuant to
temporary across-the-board reductions that similarly affect all
officers of the Company reporting directly to Executive and which
are effective on or after the first anniversary of the Effective
Date, (B) a diminution to Executive’s title or a
material diminution to Executive’s duties and
responsibilities; provided , that, the occurrence of the
following events shall not be deemed a material diminution to
Executive’s duties and responsibilities: (x) the
appointment of another person to serve as President of the Company
if such person reports to Executive; and such person has been
recommended by Executive to the Board; (y) the Reacquisition;
or (z) as a result of the acquisition of the Company by
non-operating entities controlled, individually or in the
aggregate, by The Blackstone Group, Technology Crossover Ventures
and One Equity Partners, and their related affiliates (the
"Sponsors"), so long as Executive is the Chief Executive Officer of
the
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most senior operating entity (other than the Sponsors) conducting
the business of the Company, (C) the primary business office
for Executive being relocated by more than fifty (50) miles
from the city limits of Chicago, Illinois, (D) any material
breach of this Agreement by the Company, including but not limited
to the failure to nominate Executive for election or re-election to
the Board (or, if applicable the board of directors of the most
senior operating entity (other than the Sponsors) conducting the
business of the Company) and the failure of any successor to the
business operations of the Company to assume the obligations of the
Company under this Agreement; provided that any of the
events described in clauses (A) through (D) of this
Section 9(c)(ii) shall constitute a Constructive Termination
only if the Company fails to cure such event within thirty
(30) days after receipt from Executive of written notice of
the event which constitutes a Constructive Termination and
Executive terminates employment as a result thereof within one
hundred eighty (180) days of the event; provided ,
further , that a "Constructive Termination" shall cease to
exist for an event on the sixtieth (60th) day following the later
of its occurrence or Executive’s knowledge thereof, unless
Executive has given the Company written notice thereof prior to
such date.
(iii) If
Executive’s employment is terminated by the Company without
Cause (other than by reason of death or Disability) or if Executive
resigns as a result of a Constructive Termination, and if Section
9(d) does not apply, Executive shall be entitled to receive:
(A) the Accrued Rights;
(B) subject to Executive’s
execution and delivery of the General Release within sixty
(60) days following termination of employment, continued
payment of Executive’s then-current Base Salary for a period
of twenty-four (24) months, payable in accordance with the
Company’s usual payment practices; provided that the
first payment shall be made on the sixtieth (60th) day following
termination of employment and shall include payment of any amounts
that would otherwise be due prior thereto;
(C) subject to Executive’s
execution and delivery of the General Release within sixty
(60) days following termination of employment, the Pro-Rata
Bonus, if any; (D) subject to
Executive’s continued compliance with the provisions of
Sections 10 and 11, Company-paid COBRA continuation medical
benefits for Executive (and his eligible dependents) for a period
of twelve (12) months following Executive’s termination
date; provided that if it is determined as of the date of
termination of employment that Executive would have to include as
taxable income the value of such medical benefits received under
Section 105(h) of the Code, then the Company shall provide to
Executive a payment each month for a period of twelve (12) months,
of an amount equal to the monthly amount of COBRA continuation
coverage premium under the Company’s group medical plans less
the amount of Executive’s portion of the premium as if
Executive was an active employee under the same terms as provided
to senior executive officers of the Company and at the same
coverage levels as in effect immediately prior to
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such termination of employment along with a full tax gross-up so
Executive has no after tax consequences with respect such payments
and gross-up; and (E) vesting of any
equity-based awards then held by Executive with respect to the
Company or its affiliates as, and to the extent, described in
Section 5 and the definitive documentation related to such
awards. Following Executive’s termination of employment by
the Company without Cause (other than by reason of
Executive’s death or Disability) or by Executive’s
resignation as a result of a Constructive Termination under
circumstances described in this Section 9(c)(iii), Executive shall
have no further rights to any compensation or any other benefits
under this Agreement except as set forth in this
Section 9(c)(iii) other than the rights provided in Sections
13(p) and (q).
(d)
By the Company Without Cause or Resignation by Executive as a
result of Constructive Termination following a Change in Control or
a Change in Control following such Termination . If
Executive’s employment is terminated by the Company without
Cause (other than by reason of death or Disability) or if Executive
resigns as a result of a Constructive Termination in either case in
connection with, or within twenty-four (24) months following a
Change in Control or Executive’s employment is terminated by
the Company without Cause (other than by reason of death or
Disability) or Executive resigns as a result of a Constructive
Termination and a Change in Control is consummated within ninety
(90) days following such termination of employment or
resignation and such termination of employment or resignation as a
result of a Constructive Termination is in contemplation of a
Change in Control, Executive shall be entitled to receive:
(A) the Accrued Rights;
(B) (1) For a termination of
employment following a Change in Control, subject to
Executive’s execution and delivery of the General Release
within sixty (60) days following termination of employment, a
lump sum cash payment equal to the sum of (x) two (2) years of
Executive’s then-current Base Salary, (y) two
(2) years of Executive’s then-current target Annual
Bonus and (z) a pro-rata portion of the target Annual Bonus
for the year of termination based upon the percentage of the fiscal
year that shall have elapsed through the date of Executive’s
termination of employment, paid on ninety-first (91st) day
following such termination of employment.
(2)
For a Change in Control occurring after a termination of
employment, Executive shall continue to receive the amounts
specified in Section 9(c)(iii)(B) and the excess of the
amounts specified in Section 9(d)(B)(1) over the amounts
specified in Section 9(c)(iii)(B) shall be paid in a lump sum
on the date that is six months and one day following such
termination of employment. Any additional benefits and vesting of
any equity-based awards provided in this Section 9(d) shall apply
on the date such Change in Control is consummated.
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(C) subject to Executive’s
continued compliance with the provisions of Sections 10 and 11,
Company-paid COBRA continuation medical benefits for Executive (and
his eligible dependents) for a period of twenty-four
(24) months following Executive’s termination date;
provided that if it is determined as of the date of
termination of employment that Executive would have to include as
taxable income the value of such medical benefits received under
Section 105(h) of the Code, then the Company shall provide to
Executive a payment each month for a period of twenty-four
(24) months, of an amount equal to the monthly amount of COBRA
continuation coverage premium under the Company’s group
medical plans less the amount of Executive’s portion of the
premium as if Executive was an active employee under the same terms
as provided to senior executive officers of the Company and at the
same coverage levels as in effect immediately prior to such
termination of employment along with a full tax gross-up so
Executive has no after tax consequences with respect such payments
and gross-up; and (D) vesting of any
equity-based awards then held by Executive with respect to the
Company or its affiliates as, and to the extent, described in
Section 5 and the definitive documentation related to such
awards.
Following
Executive’s termination of employment by the Company without
Cause (other than by reason of Executive’s death or
Disability) or by Executive’s resignation as a result of a
Constructive Termination, in either case in connection with, or
within twenty-four (24) months following, a Change in Control
or Executive’s employment is terminated by the Company
without Cause (other than by reason of death or Disability) and a
Change in Control is consummated within ninety (90) days
following such termination of employment and such termination of
employment is in contemplation of a Change in Control, except as
set forth in this Section 9(d), Executive shall have no
further rights to any compensation or any other benefits under this
Agreement other than the rights provided in Sections 13(p) and (q).
For
purposes of this Agreement, "Change in Control" shall have the
meaning set forth in the Equity and Incentive Plan; provided
that such Change in Control also constitutes a change in ownership
or effective control of the Company or a change in the ownership of
a substantial portion of the assets of the Company within the
meaning of Code Section 409A; provided , further
, however , the Reacquisition shall not constitute a "Change
in Control" except as provided in Section 9(e).
12
(e)
Resignation by Executive Following Reacquisition of the Company
by Travelport Limited . Notwithstanding anything herein to the
contrary, if the Reacquisition occurs during the Employment Term,
Executive may elect to resign his employment with the Company, with
such resignation to be effective during the ninety (90) day
period beginning on the first anniversary of the consummation of
such Reacquisition ( provided notice of such intended
resignation is provided to the Company in writing at least one
hundred twenty (120) days prior to the effective date of such
resignation; for the avoidance of doubt, such notice may be
provided to the Company during the one (1) year period
following the Reacquisition) and be entitled to receive:
(A) the Accrued Rights;
(B) subject to Executive’s
execution and delivery of the General Release within sixty
(60) days following termination of employment, continued
payment of Executive’s then-current Base Salary for a period
of twelve (12) months; provided that the first payment
shall be made on the sixtieth (60th) day following termination of
employment and shall include payment of any amounts that would
otherwise be due prior thereto (unless earlier payment is permitted
under Code Section 409A); (C)
subject to Executive’s continued compliance with the
provisions of Sections 10 and 11, Company-paid COBRA continuation
medical benefits for Executive (and his eligible dependents) for a
period of twelve (12) months following Executive’s
termination date; provided that if it is determined as of
the date of termination of employment that Executive would have to
include as taxable income the value of such medical benefits
received under Section 105(h) of the Code, then the Company shall
provide to Executive a payment each month for a period of twelve
(12) months, of an amount equal to the monthly amount of COBRA
continuation coverage premium under the Company’s group
medical plans less the amount of Executive’s portion of the
premium as if Executive was an active employee under the same terms
as provided to senior executive officers of the Company and at the
same coverage levels as in effect immediately prior to such
termination of employment along with a full tax gross-up so
Executive has no after tax consequences with respect such payments
and gross-up; and (D) vesting of any
equity-based awards then held by Executive with respect to the
Company or its affiliates as, and to the extent, described in
Section 5 and the definitive documentation related to such
awards.
Following
Executive’s resignation following the Reacquisition, except
as set forth in this Section 9(e), Executive shall have no
further rights to any compensation or any other benefits under this
Agreement other than the rights provided in Sections 13(p) and (q).
Notwithstanding
the foregoing, if Executive’s employment is terminated by the
Company without Cause, or if Executive resigns as a result of a
Constructive Termination (other than the diminution of duties or
responsibilities directly resulting from the Reacquisition and the
Company becoming a non-publicly traded subsidiary of Travelport
Limited), and such
13
termination or resignation is in connection with, or within twelve
(12) months following the Reacquisition or Executive’s
employment is terminated by the Company without Cause or if
Executive resigns as a result of a Constructive Termination and the
Reacquisition occurs within ninety (90) days following such
termination of employment of employment or resignation and such
termination of employment or resignation is in contemplation of the
Reacquisition, Executive shall be entitled to the payments,
benefits and accelerated vesting provided in and paid in accordance
with Section 9(d) and the Reacquisition shall be treated as a
Change in Control under Section 9(d).
(f)
Expiration of Employment Term .
(i)
Election Not to Extend the Employment Term . In the event
either party elects not to extend the Employment Term pursuant to
Section 1, unless Executive’s employment is earlier
terminated pursuant to paragraphs (a), (b), (c), (d) or
(e) of this Section 9, Executive’s termination of
employment hereunder (whether or not Executive continues as an
employee of the Company thereafter) shall be deemed to occur on the
close of business on the day immediately preceding the next
scheduled Extension Date and Executive shall be entitled to receive
the Accrued Rights. Following such termination of Executive’s
employment hereunder as a result of either party’s election
not to extend the Employment Term, except as set forth in this
Section 9(f)(i), Executive shall have no further rights to any
compensation or any other benefits under this Agreement other than
the rights provided in Sections 13(p) and (q) and any bonuses
earned in the final year of the Employment Term, to the extent
earned and unpaid, payable in accordance with Section 4.
(ii)
Continued Employment Beyond the Expiration of the Employment
Term . Unless the parties otherwise agree in writing,
continuation of Executive’s employment with the Company
beyond the expiration of the Employment Term shall be deemed an
employment at-will and shall not be deemed to extend any of the
provisions of this Agreement and Executive’s employment may
thereafter be terminated at will by either Executive or the
Company; provided that the provisions of Sections 10,
11, 12, and 13(q) of this Agreement shall survive any termination
of this Agreement or Executive’s termination of employment
hereunder.
(g)
Notice of Termination . Any purported termination of
employment by the Company or by Executive (other than due to
Executive’s death) shall be communicated by written Notice of
Termination to the other party hereto in accordance with
Section 13(i) hereof. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
employment under the provision so indicated.
10.
Non-Competition .
(a) From
the date hereof while employed by the Company and for a one (1)-
year period following the date Executive ceases to be employed by
the Company (the "Restricted Period"), irrespective of the cause,
manner or time of any termination (unless Executive’s
employment terminates in accordance with Section 9(f)(i), in
which case the Restricted Period shall be six (6) months),
Executive shall not use his status with the Company or any of its
14
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
(but assuming Executive is holding a similar position and earning
the same level of income).
(b) During
the Restricted Period, other than in the reasonable good faith
performance of Executive’s duties hereunder, Executive shall
not make any statements or perform any acts intended to or which
may have the effect of advancing the interest of any Competitors of
the Company or on behalf of a Competitor in any way injuring the
interests of the Company or any of its subsidiaries or any entities
in which the Company has an equity interest of five
(5) percent or more (such entities, "Affiliates"), and the
Company and its subsidiaries or Affiliates shall not make or
authorize any person to make any statement or perform any act that
would in any way injure the personal or business reputation or
interests of Executive; provided , however , that,
subject to Section 11, nothing herein shall preclude the
Company and its subsidiaries and Affiliates or Executive from
(x) giving truthful testimony under oath in response to a
subpoena or other lawful process, (y) giving truthful answers
in response to questions from a government investigation or
(z) complying with disclosure requirements imposed by
securities laws, stock exchange rules or similar laws, regulations
or rules; provided , further , however , that
nothing herein shall prohibit the Company and its subsidiaries and
Affiliates or Executive from disclosing the fact of any termination
of Executive’s employment or the circumstances for such a
termination or rebutting such statement of the other. For purposes
of this Section 10(b), the term "Competitor" means the five
entities identified on Exhibit C (and their respective
subsidiaries or online travel agency-related affiliates);
provided , however , the Company shall be entitled in
its sole discretion to update the composition of the entities
identified on Exhibit C up to two (2) times per calendar
year during the Employment Term (such update to become effective
upon ninety (90) days prior written notice to Executive;
provided , however , if such ninety (90) day
period expires after a termination of Executive’s employment
for any reason, such update shall not be effective and, further,
that any new written notice to Executive of such update shall not
be effective if such new notice is given on or following the date
Executive provides the Company written notice of his intended
resignation pursuant to Section 9(e)); provided that in
no event shall more than five entities be identified on
Exhibit C at any time; and provided further , an
entity may only be added to Exhibit C if it is an enterprise
or business that is engaged in, or has plans to engage in, at any
time during the Restricted Period, any activity that competes with
the businesses conducted during or at the termination of
Executive’s employment, or then proposed to be conducted, by
the Company and its affiliates in a manner that is or would be
material in relation to the businesses of the Company or the
prospects for the businesses of the Company (in each case, within
one hundred (100) miles of any geographical area where the
Company or its affiliates manufactures, produces, sells, leases,
rents, licenses, distributes, markets or otherwise provides its
products or services). During the Restricted Period, Executive,
without prior express written approval by the Board, shall not
(A) engage in, or directly or indirectly (whether for
compensation or otherwise) manage, operate, or control, or join or
participate in the management, operation or control of a
Competitor, in any capacity (whether as an employee, officer,
director, partner, consultant, agent, advisor, or otherwise);
(B) develop, expand or promote, or assist in the development,
expansion or promotion of, any division of an enterprise or the
business of a Competitor or (C) own or hold a Proprietary
Interest in, or directly furnish any capital to, any Competitor of
the Company. Executive acknowledges that the Company’s and
its subsidiaries’ and Affiliates’ businesses are
conducted nationally and internationally and
15
agrees that the provisions in the foregoing sentence shall operate
throughout the United States and the world (subject to the
definition of "Competitor").
(c) During
the Restricted Period, Executive, without express prior written
approval from the Board, shall not solicit any then current clients
of the Company or any of its subsidiaries or Affiliates (other than
any general public consumers) for any existing business of the
Company or any of its subsidiaries or Affiliates using Confidential
Information or by making any statement (other than normal
competitive type statements) that would in any way injure the
business reputation of the Company or any of its subsidiaries or
Affiliates, or, other than in the reasonable good faith performance
of Executive’s duties hereunder, discuss with any employee of
the Company or any of its subsidiaries or Affiliates information or
operations for the purpose of assisting any business intended to
compete with the Company or any of its subsidiaries or Affiliates.
(d) During
the Restricted Period, other than in the reasonable good faith
performance of Executive’s duties hereunder, Executive shall
not interfere with the employees or business relationships of the
Company or any of its subsidiaries or Affiliates (other than with
respect to any general public consumers or without using
Confidential Information or without making any statement (other
than normal competitive type statements) that would in any way
injure the business reputation of the Company or any of its
subsidiaries or Affiliates) or solicit or induce any person who is
an employee of the Company or any of its subsidiaries or Affiliates
to terminate any relationship such person may have with the Company
or any of its subsidiaries or Affiliates, nor shall Executive
during such period directly or indirectly engage, employ or
compensate, or cause any person with which Executive may be
affiliated, to engage, employ or compensate, any employee of the
Company or any of its subsidiaries or Affiliates. Notwithstanding
the foregoing, the provisions of Sections 10(c) and (d) hereof
shall not be violated by (A) general advertising or
solicitation not specifically targeted at Company-related persons
or entities, (B) Executive serving as a reference, upon
request, for any employee of the Company or any of its subsidiaries
or affiliates, or (C) actions taken by any person or entity
with which Executive is associated if Executive is not directly or
indirectly involved in the matter (other than with regard to
general direction not specifically related to the Company or any of
its subsidiaries or Affiliates), and, in the case of hiring, has
not identified such Company-related person for soliciting to hire.
(e) For
the purposes of this Agreement, "Proprietary Interest" means any
legal, equitable or other ownership, whether through stock holding
or otherwise, of an interest in a business, firm or entity;
provided , that none of the equity interest or stock options
to purchase shares of private companies held by Executive on the
date hereof and disclosed to the Company or ownership of such
shares on exercise of any stock options (regardless of whet
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