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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