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MANAGEMENT EQUITY AWARD AGREEMENT

Equity Incentive Plan Agreement

MANAGEMENT EQUITY AWARD AGREEMENT | Document Parties: TRAVELPORT LTD | TDS Investor (Cayman) GP Ltd | TDS Investor (Cayman) LP | Travelport Inc You are currently viewing:
This Equity Incentive Plan Agreement involves

TRAVELPORT LTD | TDS Investor (Cayman) GP Ltd | TDS Investor (Cayman) LP | Travelport Inc

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Title: MANAGEMENT EQUITY AWARD AGREEMENT
Governing Law: New York     Date: 5/12/2009

MANAGEMENT EQUITY AWARD AGREEMENT, Parties: travelport ltd , tds investor (cayman) gp ltd , tds investor (cayman) lp , travelport inc
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Exhibit 10.3

 

[2009 LTIP REUs – G.WILSON]

 

MANAGEMENT EQUITY AWARD AGREEMENT
(Restricted Equity Units)

 

THIS MANAGEMENT EQUITY AWARD AGREEMENT (“ Agreement ”) is made as of May 1, 2009 by and between TDS Investor (Cayman) L.P., a Cayman Islands limited partnership (the “ Partnership ”) and < NAME OF EXECUTIVE > (“ Executive ”).

 

RECITALS

 

The Partnership has adopted the TDS Investor (Cayman) L.P. Fourth Amended and Restated 2006 Interest Plan (the “ Plan ”), a copy of which is attached hereto as Exhibit A.

 

In connection with Executive’s employment by the Partnership or one of its Subsidiaries (collectively, the “ Company ”), the Partnership intends concurrently herewith to grant the number of Restricted Equity Units (as defined below) set forth on the signature page hereto.

 

NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement, intending to be legally bound, agree as follows:

 

SECTION 1


DEFINITIONS

 

1.1.          Definitions .   Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Partnership Agreement.  In addition to the terms defined in the Partnership Agreement, the terms below shall have the following respective meanings:

 

Agreement ” has the meaning specified in the Introduction .

 

Board ” means the board of directors of the General Partner (or, if applicable, any committee of the Board).

 

Cause ” shall have the meaning assigned such term in any employment agreement entered into between any Company and Executive, provided that if no such employment agreement exists or such term is not defined, then “ Cause ” shall mean (A) Executive’s failure substantially to perform Executive’s duties to the Company (other than as a result of total or partial incapacity due to Disability) for a period of 10 days following receipt of written notice from any Company by Executive of such failure; provided that it is understood that this clause (A) shall not apply if a Company terminates Executive’s employment because of dissatisfaction with actions taken by Executive in the good faith performance of Executive’s duties to the Company, (B) theft or embezzlement of property of the Company or dishonesty in the performance of Executive’s duties to the Company, other than de minimis conduct that would not typically result in sanction by an employer of an executive in similar circumstances, (C) conviction which is not subject to routine appeals of right or a plea of “no contest” 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,  (D) Executive’s willful malfeasance or willful misconduct in connection with Executive’s duties or any act or omission which is materially injurious to the financial condition or business reputation of the Company or its affiliates, or (E) Executive’s breach of the provisions of any agreed-upon non-compete, non-solicitation or confidentiality provisions agreed to with the Company, including pursuant to this Agreement and pursuant to any employment agreement (excluding a breach of a confidentiality obligation by a statement made by Executive in good faith in Executive’s employment capacity).

 

Company ” has the meaning specified in the Recitals .

 

Constructive Termination ” shall have the meaning assigned such term in any employment agreement entered into between any Company and Executive, provided that if no such employment agreement exists or such term is not defined, then “ Constructive Termination ” means (A) any material reduction in Executive’s base salary or annual bonus opportunity (excluding any change in value of equity incentives or a reduction affecting substantially all similarly situated executives), (B) failure of the Company or its affiliates to pay compensation or benefits when due, in each case which is not cured within 30 days following the  Company’s receipt of written notice from Executive describing the event constituting a Constructive Termination, (C) a material and sustained diminution to Executive’s duties and responsibilities as of the date of this Agreement or (D) the primary business office for Executive being relocated by more than 50 miles; provided that any of the events described in clauses (A)-(D) of this definition of “Constructive Termination” shall constitute a Constructive Termination only if the Company fails to cure such event within 30 days after receipt from Executive of written notice of the event which constitutes Constructive Termination; provided further, that a  “Constructive Termination” shall cease to exist for an event on the 60 th  day following the later of its occurrence thereof or Executive’s knowledge thereof, unless Executive has given the Company written notice thereof prior to such date.

 

Disability ” shall have the meaning assigned such term in any employment agreement entered into between any Company and Executive, provided that if no such employment agreement exists or such term is not defined, then “ Disability ” shall mean Executive shall have become physically or mentally incapacitated and is therefore unable for a period of nine (9) consecutive months or for an aggregate of twelve (12) months in any eighteen (18) consecutive month period to perform Executive’s duties under Executive’s employment.  Any question as to the existence of the Disability of Executive as to which Executive and the Partnership cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to Executive and the Partnership.  If Executive and the Partnership cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing.  The determination of Disability made in writing to the Partnership and Executive shall be final and conclusive for all purposes of this Agreement and any other agreement between any Company and Executive that incorporates the definition of “Disability”.

 

Effective Date ” means the date hereof.

 

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Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended.

 

Executive ” has the meaning specified in the Introduction .

 

Other Documents ” means the Partnership Agreement, any other management equity award agreement between Executive and the Partnership and any employment agreement by and between Executive and any Partnership, in each case as amended, modified, supplemented or restated from time to time in accordance with the terms thereof.

 

Partnership ” has the meaning specified in the Introduction .

 

Partnership Agreement ” shall mean the Agreement of Limited Partnership, as amended, modified or supplemented from time to time, of the Partnership.

 

“Retirement” shall mean the retirement of the Executive from employment with the Company at or beyond the age at which Executive is entitled to retire under the terms of Executive’s contract of employment or earlier with the consent of the Company provided that the Company shall not withhold its consent on the basis of Executive’s age.

 

“Travelport EBITDA” means the earnings before interest, taxes, depreciation and amortization of Travelport, as determined by Travelport’s Board of Directors.

 

Unvested Restricted Equity Units ” means Restricted Equity Units held by Executive that are subject to any vesting, forfeiture or similar arrangement under this Agreement.

 

Vested Restricted Equity Units ” means Restricted Equity Units held by Executive that are no longer subject to any vesting, forfeiture or similar arrangement under this Agreement.

 

SECTION 2

 

GRANT OF RESTRICTED EQUITY UNITS

 

2.1.          Restricted Equity Units .  Subject to the terms and conditions hereof, the Partnership hereby grants Executive                                                Restricted Equity Units as is set forth on the signature page to this Agreement and Executive accepts such Restricted Equity Units from the Partnership.  Each “ Restricted Equity Unit ” represents the right to receive from the Partnership, on the terms and conditions (and at the times) set forth in this Agreement (including Section 3.3), one Class A-2 Interest with a hypothetical capital contribution equal to, on the date hereof, $1 per Class A-2 Interest (but subject to adjustment pursuant to Section 4.3).  The terms of Class A-2 Interests are set forth in, and governed by, the Partnership Agreement and Executive shall have no rights in respect of such Class A-2 Interests until the Company delivers such Class A-2 Interests pursuant to the terms hereof and Executive becomes a Class A-2 Limited Partner pursuant to the Partnership Agreement.

 

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SECTION 3


VESTING, TRANSFER PROHIBITED, DELIVERY AND TERMINATION

 

3.1.                               Vesting Schedule .

 

(a)           The Restricted Equity Units granted to Executive under this Agreement shall be eligible for vesting over a four calendar year period beginning on January 1, 2009, with 25% of the total number of Restricted Equity Units ( i.e.,                     Restricted Equity Units) eligible for vesting in each of calendar years from 2009 through 2012, inclusive. The Restricted Equity Units eligible for vesting for a particular calendar year shall each be referred to as a “Tranche.”

 

(b)           Vesting for each Tranche will be based upon the Travelport EBITDA, cash flow and/or other financial targets established and defined by the Board, in good faith, during that calendar year (for each year, individually, an “Annual Goal,” and collectively, the “Annual Goals”), which shall be established no later than April 30 of each calendar year (May 7 for 2009). For each Tranche the Board will establish Threshold, Target and Stretch levels for each Annual Goal and the percentage weighting for each Annual Goal ( e.g. , 50%) (the “Weight”).   After approval by the Board, such Annual Goals, the Weight for each Annual Goal and the Threshold, Target and Stretch levels for each Annual Goal for that Tranche shall be communicated in writing to Executive.

 

(c)           Subject to Executive’s continuous active employment (which shall not include employment after the Executive has either given or received notice of termination of employment) with the Company through the January 1 immediately following the applicable calendar year (each, a “Vesting Date”), a percentage of the Restricted Equity Units for that Tranche shall vest prorata based upon the achievement of Travelport Limited (“Travelport”) as compared to each Annual Goal and the Weight assigned to each Annual Goal established by the Board as follows for each applicable calendar year:

 

(i)                                      if the Annual Goal result is at Stretch level, 100% of the Restricted Equity Units shall vest; or

 

(ii)                                   if the Annual Goal result is at Target level, 66.7% of the Restricted Equity Units shall vest; or

 

(iii)                                if the Annual Goal result is at Threshold level, 33.3% of the Restricted Equity Units shall vest; or

 

(iv)                               if the Annual Goal result is between Threshold and Target levels, the number of Restricted Equity Units shall vest based on the interpolation between the number that would have vested at Threshold (33.3%) and the number that would have vested at Target (66.7%); or

 

(v)                                  if the Annual Goal result is between Target and Stretch levels, the number of Restricted Equity Units shall vest based on the interpolation between the

 

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number that would have vested at Target (66.7%) and the number that would have vested at Stretch (100%); or

 

(vi)                               if the Annual Goal result is below Threshold level, the Restricted Equity Units for that Annual Goal based on the Weight shall not vest, but the Restricted Equity Units for other Annual Goals shall still be eligible for vesting based upon this Section 3.1(c).

 

For example, if a Tranche is 100 Restricted Equity Units, the Annual Goals for that Tranche are EBITDA and revenue, and the Weight for EBITDA and revenue is 50% each, then 50 Restricted Equity Units are eligible to vest based on Travelport’s achievement of EBITDA as compared with the Threshold, Target and Stretch levels for that calendar year and 50 Restricted Equity Units are eligible to vest based on Travelport’s achievement of revenue as compared with the Threshold, Target and Stretch levels for that calendar year.  The number of Restricted Equity Units, if any, that vest on each January 1 shall be determined on the date on which Travelport’s annual financial statements are certified by Travelport’s Chief Financial Officer and Chief Accounting Officer, and which date shall be no later than March 31 following the applicable calendar year. The number of Restricted Equity Units that vest for a particular calendar year shall be rounded to the nearest number of whole units.

 

(d)                                  For each calendar year’s Tranche of Restricted Equity Units, the number of Restricted Equity Units that do not vest based on Section 3.1(c)(ii)— (vi) shall remain eligible for vesting based upon the Travelport EBITDA, cash flow and/or other financial targets for any other performance period(s) that may, in its sole and complete discretion, be established and defined by the Board in good faith (“the Catch-Up Goals”).  Such Catch-Up Goals may be established by the Board at multiple times on or before December 31, 2012.  The number of Restricted Equity Units, if any, that vest on each January 1 (beginning on January 1, 2011) based on the achievement of Travelport’s results as compared with the Catch-Up Goals shall determined on the date on which Travelport’s annual financial statements for prior calendar year are certified by Travelport’s Chief Financial Officer and Chief Accounting Officer, and which date shall be no later than March 31. The number of Restricted Equity Units that vest based on the Catch-Up Goals shall be rounded to the nearest number of whole units.  All Restricted Equity Units that have not vested on April 1, 2013 shall be forfeited.

 

(e)                                   Notwithstanding the foregoing in the event that:

 

(i)            a Change in Control occurs at a time when Executive is employed by the Company, Executive shall thereupon be deemed to have vested in the unvested Restricted Equity Units at Target (including, for the avoidance of doubt, any Restricted Equity Units that remain unvested due to the failure in any prior calendar year(s) to achieve the Annual Goals at Target)  immediately prior to such Change of Control (and such Restricted Equity Units shall automatically convert to Vested Restricted Equity Units hereunder) and any Restricted Equity Units that remain unvested after such conversion shall be forfeited;

 

(ii)           Executive’s employment with the Company is terminated by the Company other than for Cause, by Executive as the result of a Constructive Termination,

 

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or as a result of death or Disability, Executive shall be deemed to have vested in the unvested Restricted Equity Units that would have vested assuming (1) that Executive’s employment continued for eighteen (18) months following the termination of Executive’s employment (“Accelerated Vesting Date”), (2) that the award vests ratably on a monthly basis beginning on the prior Vesting Date through the Accelerated Vesting Date over the remainder of the performance period that ends on December 31, 2012, and (3) performance at Target.  For example, if Executive was terminated without Cause on September 1, 2009, then Executive will receive 26/48 th (s) vesting of all unvested Restricted Equity Units as of the termination date at Target; and

 

(iii)          Executive’s employment with the Company is terminated for any reason, except as set forth, and to the extent provided, in Sections 3.1(e)(i) and 3.1(e)(ii), Executive shall have no right to further vesting of the Restricted Equity Units that are Unvested Restricted Equity Units (and such Restricted Equity Units shall be Unvested Restricted Equity Units notwithstanding the provisions of this Section 3.1).

 

3.2.                               Transfer Prohibited .  Executive may not sell, assign, transfer, pledge or otherwise encumber (or make any other Disposition of) any Restricted Equity Units, except upon the death of Executive.  Upon any attempted Disposition in violation of this Section 3.2, the Restricted Equity Units shall immediately become null and void.

 

3.3.                               Delivery of Class A-2 Interests .

 

(a)           No fractional Class A-2 Interest covered by a Restricted Equity Unit shall be delivered.  No Class A-2 Interest covered by a Restricted Equity Unit shall be delivered to Executive until both (x) the Restricted Equity Unit becomes a Vested Restricted Equity Unit and (y) each of the following conditions precedent to delivery of such Class A-2 Interest shall have been satisfied in full, as determined in the sole discretion of the Board:

 

(i)                                      One of the following events shall have occurred:

 

(A)                               a Change in Control that also qualifies as a “change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation” (as described in Code Section 409A and related guidance (“ Section 409A ”)) in respect of the Partnership
 
(B)                                 Executive’s “separation from service” from the Partnership and its Subsidiaries, including Retirement;
 
(C)                                 April 15, 2013, regardless of whether Executive is employed by the Company on such date;
 
(D)                                Executive’s death or Disability; or
 
(E)                                  if permissible without the imposition of any additional tax in respect of, or current taxation prior to actual delivery of, the Class A-2 Interests, the date that is 12 months following the occurrence of a Qualified Public Offering.

 

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(ii)                                   Executive shall have paid to the Company such amount as may be requested by the Partnership for purposes of remitting any income tax or other taxes required by law to be withheld with respect to the delivery of the Restricted Equity Units (provided that this condition may be satisfied if Executive instead directs the Company to withhold Class A-2 Interests to cover such required withholding amounts).

 

(iii)                                Executive (or Executive’s executors or beneficiaries) and, if applicable, the spouse of Executive (or Executive’s executors or beneficiaries) shall have executed and delivered to the Partnership an Addendum Agreement pursuant to which Executive (or Executive’s executors or beneficiaries ) shall have become a party to the Partnership Agreement and a Class A-2 Limited Partner.

 

3.4.                               Termination of Restricted Equity Units .

 

(a)                                   Subject to Section 3.1, Unvested Restricted Equity Units shall be canceled if Executive’s employment with the Company is terminated for any reason (including death or Disability).

 

(b)                                  Vested Restricted Equity Units shall be canceled upon the occurrence of the following:

 

(i)                                      Executive’s breach of the provisions of Section 5 of this Agreement (or any similar agreed-upon obligations of Executive to the Company); or

 

(ii)                                   termination of Executive’s employment with the Company for Cause.

 

3.5.          Partnership Agreement; Call Rights .  Executive acknowledges receipt of a copy of the Partnership Agreement and represents that Executive understands that (i) the terms of Class A-2 Interests are set forth in, and governed by, the Partnership Agreement, (ii) Executive shall have no rights in respect of such Class A-2 Interests (including any right to receive distributions under the Partnership Agreement) until the Company delivers such Class A-2 Interests pursuant to the terms hereof and Executive becomes a Class A-2 Limited Partner pursuant to the Partnership Agreement and (iii) the Partnership Agreement may be amended or modified from time to time prior to Executive becoming a party thereto pursuant to the terms of the Partnership Agreement.  Notwithstanding the foregoing or anything to the contrary in the Partnership Agreement, Class A-2 Interests delivered pursuant to a Restricted Equity Unit granted pursuant to this Agreement shall not, until the earlier of (a) the end of the Restricted Period (as defined below) or (b) the breach of any covenant contained in Section 5 of this Agreement (the “ No-Call Period ”), be (i) forfeitable pursuant to Article XII of the Partnership Agreement or (ii) subject to the mandatory purchase provisions of Article XII of the Partnership Agreement; provided that, in each case, any time periods contained in the Partnership Agreement that would otherwise have lapsed during the No-Call Period shall not begin to run until after the expiration of such No-Call Period (or, if later, the date on which the Partnership has actual knowledge of the expiration of such No-Call Period).

 

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SECTION 4

 

DISTRIBUTION EQUIVALENT RIGHTS

 

4.1.                               Payments and Allocations upon Distributions .  If on any date while Restricted Equity Units are outstanding hereunder, the Partnership shall make any distribution to holders of Class A Interests pursuant to Article VIII of the Partnership Agreement, the Partnership shall take the following actions:

 

(a)                                   the Partnership shall cause the Company to promptly pay Executive an amount, in respect of each Vested Restricted Equity Unit, equal to the amount that would have been payable in respect of the Class A-2 Interest underlying such Vested Restricted Equity Unit if it were issued and outstanding on the date of such distribution (such payment amount, the “ Vested Distribution Equivalent Payment ”); and

 

(b)                                  the Partnership shall cause the Company to allocate to a notional account for Executive (the “ Notional Account ”) an amount, in respect of each Unvested Restricted Equity Unit, equal to the amount that would have been payable in respect of the Class A-2 Interest underlying such Unvested Restricted Equity Unit if i


 
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