EXECUTIVE TERMINATION BENEFITS AGREEMENT
This Executive Termination Benefits Agreement ("Agreement") dated as of
November 13, 2000 ("Effective Date"), is among Sabre Holdings Corporation, a
Delaware corporation ("Sabre Holdings"), Sabre Inc., a Delaware corporation
("Sabre"), and the executive named on the signature page hereof (the
"Executive").
WHEREAS, the Board of Directors recognizes that any likelihood of a
Change in Control affecting the Company, and the uncertainty which it may
raise among management personnel, may result in the departure or distraction
of management personnel to the detriment of the Company and its stockholders;
WHEREAS, the Board of Directors considers it essential to the best
interests of the Company and its stockholders that its key executives be
incentivized to remain with the Company, and to continue to devote their full
attention and dedication to the Company's business and their assigned duties,
in the event of an actual or likely Change in Control;
WHEREAS, the Board of Directors believes the Executive is a key
executive of the Company and, in the event of an actual or likely Change in
Control, the Board of Directors wants the Executive to continue performing
his or her duties, to assess the impact of the potential Change in Control,
to advise the Company whether the potential Change in Control is in the best
interests of the Company and its shareholders, to assist in implementing the
Change in Control, and to take such other actions as the Board might
determine to be appropriate under the circumstances, all without the
Executive being distracted by personal concerns about the impact of the
potential Change in Control on the Executive;
WHEREAS, the Company has agreed for those Executives hired prior to
March 1, 2001, to grant additional awards to the Executive under the LTIP (as
defined in Section 4(f) below), which the Company was not otherwise obligated
to grant, in return for the Executive agreeing that the terms herein shall
override anything to the contrary in any existing Executive Termination
Benefits Agreement (ETBA) or the Long Term Incentive Plan (LTIP) as amended,
even if the ETBA or the LTIP would otherwise have provided a greater benefit,
and the Executive acknowledges the receipt and sufficiency of such additional
grants as good and valuable consideration for Executive's agreement to said
amendments to the LTIP and replacement of existing ETBAs; and
WHEREAS, attached to this Executive Benefits Termination Agreement is
an Addendum setting forth certain terms in addition to the terms set forth in
this Agreement. To the extent any of the terms contained in the attached
Addendum conflict and/or contradict the terms contained in this Agreement,
the terms contained in the Addendum shall control and supersede any such
conflicting and/or contradictory terms contained in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants below and
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and in order to incentivize the Executive to remain
in the employ of the Company in the event of an actual or likely Change in
Control, the Company and the Executive agree as follows:
1
1. DEFINED TERMS. For purposes of this Agreement, the following terms have
the meanings ascribed to them below:
(a) "CAUSE" means any of the following actions by the Executive
leading to termination of employment: conviction for an act of fraud,
embezzlement, theft, or any act constituting a felony, (for which a plea
of no contest or guilty is made by the Executive) insubordination,
persistent inattention to duties or excessive absenteeism, violation of
the Company's work rules, code of conduct or policies or federal law, or
any other conduct which would disqualify the Executive from entitlement to
unemployment benefits.
(b) "CHANGE IN CONTROL" means an occurrence after the Effective Date
of any one or more of the events described in clause (i), (ii), (iii), or
(iv) below.
(i) Any Person directly or indirectly, becomes the beneficial
owner (as defined in Rule 13(d)-3 under the Securities Exchange Act)
of securities of the Company representing twenty-five percent (25%)
or more of the combined voting power of the Company's then
outstanding securities; or
(ii) During any period of two (2) consecutive years, the
individuals who, at the beginning of such period, constitute the
Board of Sabre Holdings Corporation (the "Incumbent Directors";
collectively, the "Incumbent Board") cease for any reason other than
death to constitute at least a majority of the Board, provided,
however, that any individual becoming a director subsequent to the
beginning of such two-year period, or nomination for election by the
Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of
an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board; or
(iii) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially
all of the assets of the Company or the acquisition of assets of
another corporation (a "Business Combination"), in each case,
unless, following such Business Combination, (A) all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the then outstanding shares of
Stock of the Company (the "Outstanding Company Stock") and the
combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors
(the "Outstanding Company Voting Securities") immediately prior to
such Business Combination beneficially own, directly or indirectly,
more than sixty percent (60%) of the then Outstanding Company Stock
and the combined voting power of the then Outstanding Company Voting
Securities entitled to vote generally in the election of directors,
as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as
2
a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or
throughout one or more subsidiaries), (B) no Person (excluding
any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, twenty-five percent
(25%) or more of respectively, the then Outstanding Company
Stock of the corporation resulting from such Business
Combination or the combined voting power of the then Outstanding
Company Voting Securities of such corporation except to the
extent that such ownership existed prior to the Business
Combination, and (C) at least a majority of the members of the
board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the
time of the execution of the initial agreement, or of the action
of the Board, providing for such Business Combination; or
(iv) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
(c) "COMPANY" means either Sabre Holdings or Sabre, except that
with respect to employment or payment the term also includes
indirect subsidiaries and affiliates of Sabre Holdings and
Sabre.
(d) "CONTINUATION PERIOD" is defined in the Addendum to this
Agreement.
(e) "DISABILITY" means the Executive's permanent inability to
perform the essential job functions of his or her position
with or without reasonable accommodation.
(f) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor or replacement
thereto.
(g) "NOTICE OF TERMINATION" means a notice to the Executive or the
Company described in Section 3 below.
(h) "PERSON" has the meaning ascribed to that term in Section
3(a)(9) of the Exchange Act and as used in Sections 13(d) and
14(d) thereof, and includes a "group" as defined in Section
13(d) of the Exchange Act; but excludes the Company and any
direct or indirect subsidiary of the Company and any employee
benefit plan sponsored or maintained by the Company or any
direct or indirect subsidiary of the Company (including any
trustee of such plan acting as trustee).
2. CIRCUMSTANCES TRIGGERING RECEIPT OF SEVERANCE BENEFITS.
(a) Subject to Section 2(c) below, the Company will provide the
Executive with the benefits set forth in Sections 4 and 6
below upon any termination, except for Cause, of the
Executive's employment:
3
(i) by the Company at any time within the first twenty-four
(24) months after a Change in Control;
(ii) by the Company at any time within one hundred eighty
(180) days prior to a Change in Control;
(iii) by the Executive for "Good Reason" (as defined in
Section 2(b) below) at any time within the first
twenty-four (24) months after a Change in Control.
(b) For purposes of Section 2(a)(iii) above, the Executive will be
entitled to terminate employment with the Company and its
subsidiaries for "Good Reason" after a Change in Control if:
(i) without the Executive's written consent, one or more of
the following events occurs at any time during the first
twenty-four (24) months after such Change in Control:
(1) the Executive is not appointed to, or is otherwise
removed from, any office or position with the Company or
its subsidiaries that is held by the Executive
immediately prior to the Change in Control for any
reason other than for Cause or in connection with the
termination of employment with the Company or its
subsidiaries pursuant to Section 2(a)(i) or 2(a)(ii)
above;
(2) the Executive's Base Salary rate or annual incentive
compensation target is reduced below that in effect
immediately prior to the Change in Control for any
reason other than for Cause or in connection with the
termination of employment with the Company and its
subsidiaries pursuant to Section 2(a)(i) or 2(a)(ii)
above;
(3) the Executive's principal office is moved, without
the Executive's consent, to a location that is more than
fifty (50) statute miles from its location immediately
prior to the Change in Control;
(4) for any reason other than for Cause or in connection
with the termination of his employment with the Company
and its subsidiaries pursuant to Section 2(a)(i) or
2(a)(ii) above, the Executive suffers a significant
adverse change in the nature or scope of the
authorities, powers, functions, responsibilities or
duties attached to the position with the Company which
the Executive held immediately prior to the Change in
Control;
(5) the Executive determines in good faith that a change
in circumstances has occurred following a Change in
Control which has rendered the Executive substantially
unable to carry out, has
4
substantially hindered the Executive's performance
of, or has caused the Executive to suffer a
substantial reduction in, any of the authorities,
powers, functions. responsibilities or duties
attached to the position held by the Executive
immediately prior to the Change in Control;
(6) for any reason other than in connection with the
termination of employment or in connection with a bona
fide restructuring of the Executive's benefits that does
not reduce the overall level of such benefits, the
Company asserts the intention to reduce or reduces any
benefit provided to the Executive below the level of
such benefit provided immediately prior to the Change in
Control, other than pursuant to the terms of any
employment agreement between the Company or a subsidiary
of the Company and the Executive ("Employment
Agreement") (unless the Company agrees to fully
compensate Executive for any such reduction);
(7) a successor where applicable, does not assume and
agree to the terms of this Agreement in accordance with
Section 9 below; or
(8) the Company purports to terminate Executive's
employment other than in accordance with a Notice of
Termination.
(ii) the Executive notifies the Company in writing (addressed
in care of the Chairman of the Board of the Company) of
the occurrence of such event;
(iii) within thirty (30) days following receipt of such
written notice, the Company does not cure such event to
the reasonable satisfaction of the Executive and deliver
to the Executive a written statement that it has done
so; and
(iv) within sixty (60) days following the expiration of the
period specified in Section 2(b)(iii) above (without the
occurrence of a cure and written notice thereof as
described in Section 2(b)(iii) above), the Executive
voluntarily terminates employment with the Company.
(c) Notwithstanding Sections 2(a) and 2(b) above, no benefits will
be payable by reason of this Agreement in the event of:
(i) Termination of the Executive's employment with the
Company by reason of the Executive's death or
Disability, so long as neither the Executive nor the
Company previously received a Notice of Termination for
the Executive;
5
(ii) Termination by the Executive of the Executive's
employment with the Company at or after age sixty-five
(65) if the Executive is then eligible for retirement;
or
(iii) Termination of the Executive's employment with the
Company for Cause.
This Section 2(c) will not preclude the payment of any amounts
otherwise payable to the Executive under any of the Company's
employee benefit plans, programs and arrangements and/or under any
Employment Agreement. The Executive will not be deemed to have been
terminated for Cause unless (A) reasonable notice is given to the
Executive that the Board of Directors intends to meet to consider
terminating the Executive for Cause, (B) a meeting of the Board of
Directors is held at which the Executive (and his legal counsel if
desired by the Executive) is given an opportunity to present a
defense, (C) following that meeting, a resolution is approved by the
affirmative vote of at least seventy-five percent (75%) of the
members of the Board of Directors of the Company, which concludes
that Cause exists, specifies the acts or failures to act
constituting Cause, and approves the termination of the Executive
for Cause.
3. NOTICE OF TERMINATION. Any termination of the Executive's employment
with the Company as contemplated by Section 2 above (excluding Subsection
2(b)(i)(8)) will be communicated by written notice to the Executive or the
Company delivered in person or by certified mail. Any "Notice of Termination"
will: (i) state the effective date of termination, which will not be less than
thirty (30) days or more than sixty (60) days after the date the Notice of
Termination is delivered (the "Termination Date"), except that the Termination
Date may be immediate if Cause exists; (ii) state the specific provision in this
Agreement being relied upon for termination; (iii) state the facts and
circumstances claimed to provide a basis for such termination in reasonable
detail, and (iv) in the case of termination for Cause, be signed by the Chairman
of the Board of the Company.
4. TERMINATION BENEFITS. Subject to the conditions set forth in Section 2
above, the Company will pay or provide to the Executive (net of any applicable
payroll or other taxes required to be withheld) the following:
(a) COMPENSATION. The Compensation to be provided to the Executive
are set forth in the Addendum.
(b) HEALTH INSURANCE BENEFITS. The Company will pay to the
Executive an amount equal to the portion of the cost, at
standard independent insurance premium rates as of the
Termination Date (or, if applicable and higher, the portion of
the cost to the Executive of exercising his right of continued
coverage under the Consolidated Omnibus Budget Reconciliation
Act of 1986, as amended) ("COBRA"), of purchasing benefits for
the Executive on an individual basis that are equal to the
Executive's Company-paid participation (including dependent
coverage) (but excluding the employee paid portion of the
premium or other cost) in the travel accident, major
6
medical, dental and vision care insurance plans
immediately prior to the event giving rise to termination,
calculated as if such benefits were continued during the
Continuation Period, and paid in a lump sum on the first
day of the month following the Termination Date; such
payment to be in lieu of (or offset by) any rights to
continued coverage under such plans on a Company-funded
basis. Notwithstanding the foregoing, if the Executive
notifies the Company that, as of the Termination Date, he
or she was unable to obtain any aspect of the
above-mentioned insurance coverage (including dependent
coverage) at the above mentioned rates, the Company will
continue to provide any such coverage to the Executive
(less the active employee cost, which Executive shall
continue to pay). Any Company provided coverage shall run
concurrently with COBRA.
(c) RETIREMENT BENEFITS. Benefits under the Sabre Supplemental
Executive Retirement Plan ("SERP"), as amended, will be
continued in accordance with the terms of the SERP. In
addition, the Executive will be deemed to be completely vested
in the Executive's currently accrued benefits under the Sabre
401(k) Savings Plan and the Legacy Pension Plan.
(d) RELOCATION BENEFITS. If the Executive moves his or her
residence in excess of fifty (50) statute miles in order to
pursue other business or employment opportunities within the
Continuation Period and requests in writing that the Company
provide relocation services, the Executive will be reimbursed
for any reasonable expenses incurred in that initial
relocation (including taxes payable on the reimbursement)
which are not reimbursed by another employer. Benefits under
this provision will include assistance in selling the
Executive's home and all other assistance and benefits that
were customarily provided by the Company to transferred
executives at the same management level as the Executive prior
to the Change in Control.
(e) EXECUTIVE OUTPLACEMENT COUNSELING. At the request of the
Executive made in writing within the Continuation Period, the
Company will engage an outplacement counseling service of
national reputation to reasonably assist the Executive in
obtaining employment.
(f) STOCK BASED COMPENSATION PLANS.
(i) Upon a Change in Control (as defined for the limited
purpose of this Section 4(f)(i) by substituting "15%" for
"25%" in Sections 1(b)(i) and 1(b)(iii)(B)), whether or not
the Executive's employment terminates, any issued and
outstanding Equity Awards (hereinafter defined) granted prior
to November 13, 2000, will immediately vest and become
exercisable in accordance with the Company's 1996 Long Term
Incentive Plan, Amended and Restated 1996 Long Term Incentive
Plan, or any successor plans (collectively the "LTIPs") (and
for purposes hereof, any
7
interpretation or rulings under the LTIP shall equally apply
to this agreement).
(ii) Notwithstanding anything to the contrary in the LTIP or
in any stock option agreement, upon a Change in Control (as
defined hereunder), any issued and outstanding Stock Options,
Stock Appreciation Rights, Restricted Stock, Performance
Shares, Stock Equivalent Units, Deferred Stock, Stock Purchase
Rights, Other Stock-Based Awards, Performance Awards, or any
other equity-based compensation (collectively, "Equity
Awards") granted on or after November 13, 2000, shall continue
in effect or, if such continuation is not possible, shall be
equitably converted to equivalent Equity Awards of any
successor entity such that the relative value of the Equity
Awards is the same following conversion as the value
immediately prior to the conversion, or, if such continuation
or conversion is not possible (but only if it is not
possible), all such Equity Awards shall become fully vested
and exercisable in accordance with the LTIP.
(iii) Notwithstanding anything to the contrary in the LTIP or
in any option agreement, if any Equity Awards are not vested
in accordance with (ii) above, then they shall become vested
if the Executive is involuntarily terminated without Cause or
voluntarily terminates for Good Reason if the Termination Date
occurs within two (2) years after a Change in Control (as
defined hereunder), and, if subject to an exercise right,
shall remain fully exercisable for at least three (3) months
following such termination (or, if longer, pursuant to the
terms of such Equity Awards). Such vesting shall also occur
for any Equity Award forfeited or cancelled within one hundred
eighty (180) days prior to a Change in Control if the
Executive is involuntarily terminated without Cause within
such one hundred eighty (180) day period, except that any such
previously forfeited or cancelled Equity Awards shall not be
reissued, reinstated or replaced, but rather shall be
automatically cashed out (i.e., settled in cash) based on
either the excess of the fair market value of the Company's
stock at the Executive's termination of employment date (and
not the Change in Control date) over the exercise price, if
any, of the Equity Award, or, in the case of Restricted Stock,
Performance Shares, Deferred Stock, or similar Awards, based
on the fair market value of the Company's stock at the
Executive's termination of employment date.
(g) LIFE INSURANCE. The Company will, for the Continuation Period,
continue to provide the Executive with the same group term life insurance
coverage as in effect immediately prior to the date of the Change in
Control.
(h) OTHER PERQUISITES. The Company will pay to the Executive an
amount equal to the cost to the Company of providing or continuing any
other perquisites (excluding travel privileges) and benefits of the
Company that were in effect immediately prior to the Change in Control
(including, without limitation, a lump sum car allowance),
8
calculated as if such benefits were continued during the Continuation
Period, and payable in a lump sum on the first day of the month following
the Termination Date.
(i) ACCRUED AMOUNTS. The Company will pay to the Executive all other
amounts accrued or earned by the Executive through the Termination Date
and amounts otherwise owing under the then existing plans and policies of
the Company, including but not limited to all amounts of compensation
previously deferred by the Executive (together with any accrued interest
thereon) and not yet paid by the Company, and any accrued vacation pay not
yet paid by the Company.
5. PAYMENT OF CERTAIN LEGAL FEES AND COSTS.
(a) If a dispute arises regarding a termination of the Executive or
the interpretation or enforcement of this Agreement, after a Change in
Control, the parties will submit the dispute, within thirty (30) business
days following service of notice of such dispute by one party on the
other, to the Judicial Arbitration and Mediation Services
(J*A*M*S/Endispute) for prompt resolution in Dallas, Texas, under its
rules for labor and employment disputes. The Arbitrator will have no
authority to order a modification or amendment of this Agreement. The
decision of the Arbitrator will be final and binding upon the parties. All
reasonable fees and expenses, including, without limitation, any
arbitration or legal expenses, incurred by the Executive in contesting or
disputing any such termination (in whole or in part) or in obtaining or
enforcing any right or benefit provided for in this Agreement (in whole or
in part) or in otherwise pursuing his or her claim (in whole or in part)
will be paid by the Company, to the extent permitted by law, regardless of
whether the Executive is successful.
(b) In the event that the Company refuses or otherwise fails to make
a payment when due and it is ultimately decided that the Executive is
entitled to such payment, such payment will be increased to reflect an
interest factor, compounded annually, equal to the prime rate in effect as
of the date the payment was first due plus two points. For this purpose,
the prime rate will be based on the rate published from time to time in
the Wall Street Journal.
6. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) Subject to Section 6(h) below, if there is a Change in Control
and any payment (other than the Gross-Up payments provided for in this
Section 6) or distribution by the Company to or for the benefit of the
Executive, whether pursuant to the terms of this Agreement or otherwise,
including without limitation any lapse or termination of any restriction
on, deferral period or the vesting or exercisability of any payment,
distribution, or benefit (a "Payment"), is subject to the excise tax
imposed by Section 4999 of the Code (such tax, together with any interest
and penalties thereon, other than any criminal or fraud penalties, being
hereafter referred to as the "Excise Tax"), then the Executive will be
entitled to receive an additional payment (a "Gross-Up Payment"). The
Gross-Up Payment will be in an amount such that, after payment by the
Executive of all taxes thereon (including any interest or penalties, other
than any criminal or fraud penalties, imposed with respect to such taxes),
including any Excise Tax and any income tax
9
imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payment.
(b) Subject to the provisions of Section 6(f), all determinations
required to be made under this Section 6, including whether a Gross-Up
Payment is required to be paid by the Company and the amount of such
Gross-Up Payment, if any, will be made by a nationally recognized
accounting firm (the "Accounting Firm") selected by the Executive in his
sole discretion. The Executive will direct the Accounting Firm to submit
its determination and detailed supporting calculations to both the Company
and the Executive within thirty (30) calendar days after the Change in
Control, the Termination Date, if applicable, and any such other time or
times as may be reasonably requested by the Company or the Executive. If
the Accounting Firm determines that any Excise Tax is payable by the
Executive, the Company will pay the required Gross-Up Payment, less any
applicable withholding, to the Executive as soon as reasonably practicable
after receipt of such determination and calculations with respect to any
Payment to the Executive. If the Accounting Firm determines that no Excise
Tax is payable by the Executive, it will, at the same time as it makes
such determination, furnish the Company and the Executive an opinion that
the Executive has substantial authority not to report any Excise Tax on
his tax return. As a result of the uncertainty in the application of
Section 4999 of the Code, it is possible that Gross-Up Payments which will
not have been made by the Company should have been made hereunder (an
"Underpayment"). In the event that the Company exhausts or fails to pursue
its remedies pursuant to Section 6(g) and the Executive thereafter is
required to make a payment of any Excise Tax, the Executive will direct
the Accounting Firm to determine the amount of the Underpayment and to
submit its determination and detailed supporting calculations to both the
Company and the Executive as promptly as possible. The Company will
promptly pay any such Underpayment to, or for the benefit of, the
Executive as soon as reasonably practicable after receipt of such
determination and calculations.
(c) Any determination by the Accounting Firm as to the amount of the
Gross-Up Payment will be binding upon the Company and the Executive.
(d) The federal, state and local income or other tax returns filed
by the Executive will be prepared and filed on a consistent basis with the
determination of the Accounting Firm with respect to the Excise Tax
payable by the Executive. The Executive will make proper payment of the
amount of any Excise Payment, and provide to the Company true and correct
copies (with any amendments) of his or her federal, state, and local
income tax returns as filed with the applicable taxing authority, and such
other documents reasonably requested by the Company, evidencing such
payment. If prior to the filing of the Executive's applicable income tax
returns, the Accounting Firm determines that the amount of the Gross-Up
Payment should be reduced, the Executive will within five business days
pay to the Company the amount of such reduction.
(e) The fees and expenses of the Accounting Firm for its services
hereunder will be borne by the Company.
10
(f) The Executive will notify the Company in writing within five (5)
days of any claim by any taxing authority that, if successful, would
require the payment by the Company of a Gross-Up Payment or any additional
Gross-Up Payment. The Executive will not pay such claim prior to the
earlier of (x) the expiration of the thirty (30) calendar-day period
following the date on which he gives such notice to the Company and (y)
the date that any payment of amount with respect to such claim is due. If
the Company notifies the Executive in writing prior to the expiration of
such period that it desires to contest such claim, the Executive will:
(i) provide the Company with any written records or
documents in his possession relating to such claim reasonably
requested by the Company;
(ii) take such action in connection with contesting such claim
as the Company will reasonably request in writing from time to time,
including without limitation accepting legal representation with
respect to such claim by an attorney selected by the Company;
(iii) cooperate with the Company in good faith in order
effectively to contest such claim; and
(iv) permit the Company to participate in and control any
proceedings relating to such claim; except that the Company will
bear and pay directly all costs and expenses (including interest and
penalties) incurred in connection with such contest and will
indemnify and hold harmless the Executive, on an after-tax basis,
for and against any Excise Tax or income tax, including interest and
penalties with respect thereto, imposed as a result of such contest
and payment of costs and expenses.
(g) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to this Section 6, the Executive receives any refund
with respect to such claim, the Executive will (subject to the Company's
complying with the requirements of Section 6(f) above) promptly pay to the
Company the amount of such refund (together with any interest paid or
credited thereon after any taxes applicable thereto).
(h) Notwithstanding any provision of this Agreement to the contrary,
if (i) the aggregate "present value" of the "parachute payments" to be
paid or provided to the Executive under this Agreement or otherwise does
not exceed 1.15 multiplied by three times the Executive's "base amount,"
and (ii) but for this Section 6(h), the Company would be obligated to pay
to the Executive a Gross-Up Payment with a net after-tax benefit to the
Executive (as determined in the last sentence of Section 6(a)) of not more
than Fifty Thousand Dollars (USD $50,000) (taking into account both income
taxes and any Excise Tax), then, in lieu of such Gross-Up Payment, the
payments and benefits to be paid or provided under this Agreement
(including any stock based compensation pursuant to Section 4(f) above)
will be reduced to the minimum extent necessary (but in no event to less
than zero) so that no portion of any payment or benefit to the Executive,
as so reduced, constitutes an "excess parachute payment." For purposes of
this Section 6(h),
11
the terms "excess parachute payment," "present value," "parachute
payment," and "base amount" will have the meanings assigned to them by
Section 280G of the Code. The determination of whether any reduction in
such payments or benefits to be provided under this Agreement is required
pursuant to the preceding sentence will be made at the expense of the
Company by the Accounting Firm.
7. LETTER OF CREDIT, ETC. In order to better ensure the availability of
funds to pay all amounts provided for in Sections 4, 5 and 6, the Chief
Financial Officer may on behalf of the Company establish a "grantor" trust or
standby Letter or Letters of Credit or other suitable arrangements in an amount
sufficient to cover such amounts. The financial facility or arrangement selected
by the Chief Financial Officer will be irrevocable as of a Change in Control and
will become available to the Executive upon the Termination Date and upon
presentation of the documents specified in the Letter of Credit or other
financial facility or arrangement. All funds provided by the Company to cover
such payment. if any, will revert to the Company after payment in full to the
Executive, subject to the applicable terms of the documents implementing such
arrangements.
8. CONTINUING OBLIGATIONS.
(a) All documents, records, techniques, business secrets and other
information which have come into the Executive's possession from time to
time during his or her employment with the Company will be deemed to be
confidential and proprietary to the Company and, except for personal
documents and records of the Executive, will be returned to the Company.
(b) The Executive will retain in confidence any confidential
information concerning the Company and its subsidiaries and their
respective businesses so long as such information is not publicly
disclosed, except that Executive may disclose any such information
required to be disclosed in the normal course of employment with the
Company or pursuant to any court order or other legal process.
(c) The Executive will not, for a period of two (2) years after the
Termination Date or the Executive's Continuation Period, whichever is
greater, directly or indirectly solicit, or directly or indirectly assist
any third party in soliciting, any employee of the Company or any of its
subsidiaries or affiliated companies to join the employ of any entity that
competes with the Company or any of its subsidiaries or affiliated
companies.
9. SUCCESSORS.
(a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by
agreement in form and substance satisfactory to the Executive, to
expressly assume and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it if
no such Change in Control had taken place. Failure of such successor
entity to enter into such agreement prior to the effective date of any
such succession (or, if later, within three business days after first
receiving a written request for such agreement) will constitute a
12
breach of this Agreement and will entitle the Executive to terminate his
employment pursuant to Section 2(a)(iii) above and to receive the payments
and benefits provided under Sections 4, 5 and 6 above.
(b) This Agreement will inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
the Executive dies while any amounts are payable hereunder, all such
amounts, unless otherwise provided herein, will be paid in accordance with
the terms of this Agreement to his successors, heirs, distributees,
devisees, legatees or other designees or, if there is no such designee, to
his estate.
10. NOTICES.
For the purposes of this Agreement, notices and all other communications
provided for herein will be in writing and will be deemed to have been duly
given when delivered or mailed by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive:
------------------------------------------
------------------------------------------
------------------------------------------
If to the Company: Sabre
Attn: Corporate Secretary
P.O. Box 619615
Mail Drop 4204
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
or to such other address as either party may have furnished to the other
in writing in accordance herewith, except that notices of change of
address will be effective only upon receipt.
11. GOVERNING LAW. THE VALIDITY, INTERPRETATION, CONSTRUCTION AND
PERFORMANCE OF THIS AGREEMENT WILL BE GOVERNED BY AND ENFORCED UNDER THE LAWS OF
THE STATE OF DELAWARE.
12. MISCELLANEOUS. No provisions of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party will be deemed a waiver of similar or dissimilar provisions or conditions
at the same or any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not set forth expressly in this
Agreement (or in any employment or other written agreement relating to the
Executive).
13. SEPARABILITY. The invalidity or unenforceability of any
provisions of this Agreement will not affect the validity or enforceability
of any other provision of this Agreement, which will remain in full force and
effect.
13
14. NON-ASSIGNABILITY. This Agreement is personal in nature and neither of
the parties hereto will, without the consent of the other, assign or transfer
this Agreement or any rights or obligations hereunder, except as provided in
Section 9 above. Without limiting the generality of the foregoing, the
Executive's right to receive payments or other benefits hereunder is not
assignable, alienable, or transferable, whether by sale, exchange, gift,
disposition, pledge, hypothecation, creation of a security interest, or
otherwise, and is not subject to attachment, execution, levy, lien, constructive
trust, or other legal process (collectively, a "Transfer"), other than a
transfer by his will or by the laws of descent and distribution, and any
attempted voluntary or involuntary Transfer contrary to this Section shall be
null and void, and the Company shall have no obligation or liability to pay any
amount or provide any benefit or otherwise honor any order that attempts any
such Transfer.
15. TERMINATION. This Agreement will remain in effect for three (3) years
from the Effective Date. It will be automatically renewed for successive three
(3) year periods unless, no fewer than one hundred eighty (180) days prior to
the expiration of a three (3) year period, the Company notifies the Executive in
writing of its intent to terminate the Agreement; except that such termination
will not be made, and if made will have no effect, (a) as to any payments or
benefits payable hereunder to an Executive whose employment has terminated
pursuant to Section 2(a) or 2(b) above, or (b) within two (2) years after a
Change in Control or (c) during any period of time when the Company has
knowledge that any third person has taken steps reasonably calculated to effect
a Change in Control until, in the opinion of the Board (as constituted at the
time of the termination of this Agreement), the third person has abandoned or
terminated its efforts to effect a Change in Control.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the day and year first above set forth, thereby mutually and
voluntarily agreeing that this Agreement supersedes and replaces any prior
similar agreements for such termination benefits.
DATED: August 8, 2001
SABRE HOLDINGS CORPORATION
By
---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Corporate Secretary
SABRE INC.
By
---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President, Deputy General
Counsel and Corporate Secretary
[Executive]
Signed:
----------------------------------
14
ADDENDUM TO EXECUTIVE TERMINATION BENEFITS AGREEMENTS
1. CONTINUATION PERIOD pursuant to Subparagraph 1(d) of the Executive
Termination Benefits Agreement shall mean "the period of time
beginning on the Termination Date and ending twelve (12) months
thereafter."
2. The following language shall be added as Subparagraph 4(a) of the
Executive Termination Benefits Agreement:
The Company will pay to the Executive the sum of (i) one (1) times
the greater of (A) the Executive's effective annual base salary at
the Termination Date or (B) the Executive's effective annual base
salary immediately prior to the Change in Control, plus (ii) one (1)
times the greater of (X) the highest annual bonus awarded to the
Executive under the Company's Variable Compensation Plan or any
other bonus plan (whether paid currently or on a deferred basis)
with respect to any twelve (12) consecutive month period during the
last two (2) fiscal years ending prior to the Termination Date or
(Y) the highest target bonus rate applicable to the Executive for
any period during such prior two (2) year period, multiplied by the
applicable annual base salary determined under clause (i) of this
Section 4(a); the resulting amount to be paid in a lump sum on the
first day of the month following the Termination Date.
Dated: August 8, 2001
SABRE HOLDINGS CORPORATION
By
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Corporate Secretary
SABRE INC.
By
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President, Deputy General
Counsel and Corporate Secretary
[Executive]
Signed:
----------------------------
15