Exhibit 10.2
[2009 LTIP REUs - US SLT]
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, (C) an act or acts on Executive’s part
constituting (x) a felony under the laws of the United States
or any state thereof or (y) a crime involving moral turpitude,
(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.
“ 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 (i) any material reduction in
Executive’s base salary or incentive compensation opportunity
(excluding any change in value of equity incentives or a reduction
affecting substantially all similarly situated executives) or
(ii) failure of the Company to pay compensation or benefits
when due, in each case which is not cured within 30 days following
the Partnership’s receipt of written notice from Executive
describing the event constituting a Constructive Termination;
provided that any event that would otherwise constitute
“Constructive Termination” hereunder shall cease to
constitute “Constructive Termination” on the 30
th day following the later of (x) the
occurrence thereof and (y) Executive’s knowledge
thereof, unless Executive has given the Partnership 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.
“ 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 .
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“ Partnership Agreement
” shall mean the Agreement of Limited Partnership, as
amended, modified or supplemented from time to time, of the
Partnership.
“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.
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
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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 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.
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(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, 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 ths 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.
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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 (as described in Section 409A);
(C)
April 15, 2013, regardless of
whether Executive is employed by the Company on such
date;
(D)
Executive’s death or
Disability (so long as such Disability qualifies as a
“disability” under Section 409A); or
(E)
if permissible under
Section 409A 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.
(ii)
Executive shall
have paid to the Company such amount as may be requested by the
Partnership for purposes of depositing any federal, state or local
income 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 estate or heirs) and, if applicable, the spouse
of Executive (or Executive’s estate or heirs) shall have
executed and delivered to the Partnership an Addendum Agreement
pursuant to which Executive (or Executive’s estate or heirs)
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).
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(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).
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
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