Attached files
| file | filename |
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| EX-10.1 - RONALD L. NELSON AMENDED AND RESTATED EMPLOYMENT AGREEMENT - AVIS BUDGET GROUP, INC. | employmentagreement.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
_________________
FORM
8-K
_________________
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
Report (Date of Earliest Event Reported): January
29, 2010 (January 27, 2010)
_________________
Avis
Budget Group, Inc.
(Exact
Name of Registrant as Specified in its Charter)
_________________
|
Delaware
|
1-10308
|
06-0918165
|
||
|
(State
or Other Jurisdiction
of
Incorporation)
|
(Commission
File
Number)
|
(IRS
Employer
Identification
No.)
|
|
6
Sylvan Way
Parsippany,
NJ
|
07054
|
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
(973)
496-4700
(Registrant's
telephone number, including area code)
N/A
(Former
name or former address if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
[ ]
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
[ ]
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
[ ]
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
|
[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
5.02
|
Departure
of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers;
Compensatory
Arrangements of Certain Officers.
|
On
January 27, 2010, we amended and restated our agreement with Ronald L. Nelson,
our Chairman and Chief Executive Officer (the "Executive"). Such
agreement was last amended in December 2008 (the "Prior
Agreement").
Consistent
with the Prior Agreement, the amended agreement provides a minimum base salary
of $1 million and participation in employee benefit plans generally available to
our executive officers, and provides for an annual incentive award with a target
amount equal to 150% of the Executive's base salary, subject to attainment by
the Company of performance goals to be determined by the Company's Compensation
Committee. The amended agreement also generally provides the
Executive and his dependents with continuation of certain health and welfare
benefits until the Executive reaches (or would have reached) age 75, reflecting
no change from the Prior Agreement. Also, consistent with the Prior
Agreement, if the Executive's employment with us is terminated by us without
"cause" or due to a "constructive discharge" (as defined in the amended
agreement), the Executive generally will be entitled to a lump sum payment equal
to 299% of the sum of his then-current base salary plus his then-current target
annual bonus, and accelerated vesting of certain equity awards. The
definition of "constructive discharge" has also been amended in certain
respects, including to eliminate the trigger that provided for grounds for a
“constructive discharge” merely upon the occurrence of a “corporate transaction”
(as previously defined).
The
amended agreement has a five-year term ending on January 27, 2015, with no
automatic renewal or severance provisions applicable at the end of such
term. The 280G excise tax gross-up provision contained in the Prior
Agreement has been eliminated.
Effective
June 30, 2010, the Executive will also serve as our President and Chief
Operating Officer. Beginning after June 30, 2012, either the Board of
Directors of the Company or the Executive may elect to transition the Executive
to serve solely as Chairman of the Board and appoint a new CEO. If
the Executive so elects, a fifty percent salary and bonus reduction will be
imposed. If the Board so elects, such salary reduction will be made
in specified increments over the remaining term, based on the year in which such
election is made.
The
amended agreement contemplates a long-term equity incentive award, which was
granted to the Executive on January 27, 2010. The amended agreement
provides that although the Company’s Compensation Committee retains the right to
deliver future awards, the Company does not anticipate granting any additional
equity incentive awards to the Executive during the term of the agreement with
an aggregate grant date value in excess of $12 million, when added to the grant
date value of the January 27, 2010 award. Such award consists of
800,000 restricted stock units ("RSUs"), 25% of which vest one year from the
date of grant and 75% of which will vest in four equal tranches on the second,
third, fourth and fifth anniversaries of the grant date, subject to the
Company's attainment of certain stock price goals generally as
follows:
|
Tranche
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Target
Vesting Stock Price (100% vesting)
|
Threshold
Vesting Stock Price
(50%
vesting)
|
|
2
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$14.59
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$13.45
|
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3
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16.42
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14.52
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4
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18.47
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15.69
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5
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19.62
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16.31
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The
Executive was also granted an option to purchase 160,000 shares of common stock
of the Company, which will vest ratably over five years. Following a
"change in control" (as defined in the award agreement) of the Company, such
RSUs and options generally will become fully vested if the Executive's
employment with us is terminated by us without "cause" or due to a "constructive
discharge" (each term as defined in the amended agreement). Subject
to certain conditions in the award agreements, if the Executive's employment is
terminated by us without "cause" or due to a "constructive discharge" during the
first three years following the grant date (and not in connection with a “change
in control”), the unvested RSUs and options described above would vest,
pro-rata, based on the number of months elapsed since the grant date, with full
vesting potentially occurring only after the third anniversary of the grant date
of the awards. The amended employment agreement provides for
post-termination non-competition and non-solicitation covenants that will last
for one (1) year following the Executive's completion of the full five-year
employment term, subject to certain exceptions, or for two (2) years from the
date of termination if the Executive's employment is terminated earlier for any
reason.
A copy of
the amended agreement is attached hereto as an Exhibit and is incorporated
herein by reference. The foregoing description of the agreement does
not purport to be complete and is qualified in its entirety by reference to the
full text of the agreement.
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Item
9.01
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Financial
Statements and Exhibits.
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(d)
Exhibits.
The
following exhibits are filed as part of this report:
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Exhibit
No.
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Description
|
|
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10.1
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Amended
and Restated Employment Agreement between Avis Budget Group, Inc. and
Ronald L. Nelson.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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AVIS
BUDGET GROUP, INC.
/s/
Jean M. Sera
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|||
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By:
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Jean
M. Sera
Senior
Vice President and Secretary
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Date: January
29, 2010
EXHIBIT
INDEX
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Exhibit
No.
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Description
|
|
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10.1
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Amended
and Restated Employment Agreement between Avis Budget Group, Inc. and
Ronald L. Nelson.
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