UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 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) June
20, 2006 (June 15, 2006)
Cendant
Corporation
(Exact
name of Registrant as specified in its charter)
|
Delaware
(State
or other jurisdiction
of
incorporation)
|
1-10308
(Commission
File No.)
|
06-0918165
(I.R.S.
Employer
Identification
Number)
|
|
|
9
West 57th
Street
New
York, NY
(Address
of principal
executive
office)
|
10019
(Zip
Code)
|
Registrant's
telephone number, including area code (212)
413-1800
None
|
(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))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
|
|
Item
1.01
|
Entry
into a Material Definitive
Agreement.
|
On
June
15, 2006, the Compensation Committee of our Board of Directors approved a
long-term equity incentive grant for Richard A. Smith, one of our five most
highly compensated executive officers, with a value of $5 million. Upon the
completion of the distribution by Cendant to its stockholders of all of its
shares of common stock of Realogy Corporation, our wholly owned subsidiary
that
holds the assets and liabilities associated with our Real Estate Services
businesses, the grant will convert into two equity incentive awards relating
to
Realogy’s common stock.
As
described in Realogy’s Registration Statement on Form 10, one of these awards
will be in the form of stock-settled stock appreciation rights with a per share
exercise price equal to the value of a share of Realogy’s common stock as of the
date of grant (the closing price on the first day of trading following the
date
of Realogy’s distribution), will have a value on the date of grant of $3
million, and will vest (or not vest) on such date or dates and subject to
Realogy’s attainment of pre-established performance goals relating to Realogy’s
financial success, in each case as determined by Realogy’s Board of Directors or
Compensation Committee prior to the distribution date, and further subject
to
Mr. Smith’s continued employment with Realogy through such vesting date(s). The
other of these awards will be in the form of restricted stock units, will have
a
value on the grant date of $2 million and will vest in equal installments on
each of the first four anniversaries of May 2, 2006, subject to Mr. Smith’s
continued employment with Realogy through each such vesting date. The number
of
shares of Realogy common stock covered by Mr. Smith’s grant will equal the
aggregate value of each such grant divided by (i) in the case of restricted
stock units, the fair market value of Realogy common stock and (ii) in the
case
of stock appreciation rights, the Black-Scholes value of a right, in each case
as of the date of grant of such award (the closing price on the first day of
trading following the date of Realogy’s distribution). The award will be granted
under Realogy’s 2006 Equity and Incentive Plan.
If,
however, Realogy’s distribution does not occur, the grant will become an award
relating to Cendant common stock on December 31, 2006, and the terms of the
grant will be determined by the Compensation Committee of our Board of
Directors.
On
June
15, 2006, the Compensation Committee of our Board of Directors also approved
an
employment agreement between Realogy and Mr. Smith, which will become effective
as of the date of Realogy’s distribution.
As
described in Realogy’s Registration Statement on Form 10, the employment
agreement will have a term ending on the third anniversary of the distribution;
provided, that such term will automatically extend for one additional year
unless Realogy or Mr. Smith provides notice to the other party of non-renewal
at
least six months prior to such third anniversary. Pursuant to Realogy’s by-laws,
its Board of Directors may terminate Mr. Smith’s employment at any time. Upon
expiration of the employment agreement, Mr. Smith will be an employee at will
unless the agreement is renewed or a new agreement is executed. In addition
to
providing for a minimum base salary of $1 million and employee benefit plans
generally available to Realogy’s executive officers, Mr. Smith’s agreement
will provide for an annual incentive award with a target amount equal to 200%
of
his base salary, subject to attainment of performance goals, and grants of
long-term incentive awards, upon such terms and conditions as determined by
Realogy’s Board of Directors or Compensation Committee. Mr. Smith’s
agreement will provide that if his employment with Realogy is terminated by
Realogy without “cause” or due to a “constructive discharge” (each term as
defined in Mr. Smith’s agreement), he 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. In addition, in this event, all of
Mr. Smith’s then-outstanding Realogy equity awards will become fully vested
(and any Realogy stock options and stock appreciation rights granted on or
after
the distribution date will remain exercisable until the earlier of three years
following his termination of employment and the original expiration date of
such
awards). Options granted prior to the distribution
will
remain exercisable in accordance with Mr. Smith’s prior agreement with Cendant.
Mr. Smith’s employment agreement will also provide him and his dependents
with medical benefits through his age 75. The employment agreement will provide
Mr. Smith with the right to claim a constructive discharge if, among other
things, (i) a person other than Mr. Silverman becomes Realogy’s Chief Executive
Officer, (ii) prior to December 31, 2007, Mr. Smith does not report to the
Chief
Executive Officer, (iii) following December 31, 2007, Mr. Smith is not the
Chief
Executive Officer or does not report directly to Realogy’s Board of Directors,
(iv) Realogy fails to nominate Mr. Smith to be a member of Realogy’s Board of
Directors, or (v) Realogy notifies Mr. Smith that Realogy will not
extend the term of the employment agreement for an additional fourth year.
Mr. Smith’s agreement will provide for post-termination non-competition and
non-solicitation covenants which will last for two years following
Mr. Smith’s employment with Realogy.
Mr.
Smith’s employment agreement and the plan used in connection with Mr. Smith’s
grant are set forth below as Exhibits 10.1 and 10.2 and
incorporated by reference herein.
|
Item 7.01
|
Regulation
FD Disclosure.
|
On
June
20, 2006, we announced the commencement of meetings with institutional investors
in connection with the planned spin-off of Wyndham Worldwide Corporation.
A
copy of
the press release is attached hereto as Exhibit
99.1 and
is
incorporated by reference herein.
The
slides to be presented during the investor meetings may be accessed on Cendant’s
website at www.cendant.com
.
|
Item
9.01
|
Financial
Statements and
Exhibits.
|
| (c) |
Exhibits
|
|
10.1
|
Employment
Agreement Between Realogy Corporation and Richard A.
Smith.
|
|
|
10.2
|
2006
Equity and Incentive Plan of Realogy Corporation (incorporated by
reference to Exhibit 10.5 to Realogy Corporation’s Registration Statement
on Form 10 (File No. 001-32852)).
|
|
|
99.1
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Press
Release dated June 20, 2006.
|
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.
|
CENDANT
CORPORATION
|
|
|
By:
|
/s/
Eric J. Bock
|
|
Eric
J. Bock
Executive
Vice President, Law
and
Corporate Secretary
|
Date:
June 20, 2006
CENDANT
CORPORATION
CURRENT
REPORT ON FORM 8-K
Report
Dated June 20, 2006 (June 15, 2006)
EXHIBIT
INDEX
|
10.1
|
Employment
Agreement Between Realogy Corporation and Richard A. Smith.
|
|
|
10.2
|
2006
Equity and Incentive Plan (incorporated by reference to Exhibit 10.5
to
Realogy Corporation’s Registration Statement on Form 10 (File No.
001-32852))
|
|
|
99.1
|
Press
Release dated June 20, 2006.
|
Exhibit
10.1
EMPLOYMENT
AGREEMENT
This
Employment Agreement ("Agreement") is dated as of the Effective Date (as
hereinafter defined), by and between Realogy Corporation, a Delaware corporation
(the "Company") and Richard A. Smith (the "Executive").
WHEREAS,
Cendant Corporation, a Delaware corporation ("Cendant"), and the Executive
are
parties to an Amended and Restated Employment Agreement dated as of June 30,
2004 (the "Prior Agreement").
WHEREAS,
Cendant has determined to distribute the Company directly to its stockholders
pursuant to a spin-off transaction (the "Proposed Transaction").
WHEREAS,
the Company desires to employ the Executive, and the Executive desires to serve
the Company, in accordance with the terms and conditions of this
Agreement;
NOW
THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
parties hereby agree as follows:
SECTION
I
EFFECTIVENESS
Subject
to and upon the consummation of the Proposed Transaction (the “Effective Date”)
(i) the Prior Agreement shall terminate and be of no further force or effect
and
(ii) this Agreement shall become effective.
SECTION
II
EMPLOYMENT;
POSITION AND RESPONSIBILITIES
The
Company agrees to employ the Executive, and the Executive agrees to be employed
by the Company, for the Period of Employment as provided in Section III below
and upon the terms and conditions provided in this Agreement. The Executive
shall serve as President of the Company from the Effective Time through December
31, 2007 (the "Initial Period"), and shall thereafter serve as Chief Executive
Officer of the Company through the remainder of the Period of Employment (the
"Remaining Period"). During the Initial Period, the Executive shall report
to,
and be subject to the direction of, the Chief Executive Officer of
the
Company (the “CEO”), and during the Remaining Period shall report to, and be
subject to the direction of, the Board of Directors of the Company (the
"Board"). The Executive shall perform such duties and exercise such supervision
with regard to the business of the Company as are associated with his respective
positions, as well as such additional duties as may be prescribed from time
to
time by the Board. The Executive shall, during the Period of Employment, devote
substantially all of his time and attention during normal business hours to
the
performance of services for the Company. The Executive shall maintain a primary
office and conduct his business in Parsippany, New Jersey (the “Business
Office”), except for normal and reasonable business travel in connection with
his duties hereunder.
In
addition, effective upon the Effective Date, the Executive shall serve as Vice
Chairman, and a member, of the Board; provided,
that
the Executive’s continued service as a member of the Board shall at all times
remain subject to any and all nomination and election procedures in accordance
with the Company’s by-laws. Following the Effective Date, any failure by the
shareholders of the Company to re-elect the Executive to membership on the
Board
shall not constitute a breach by the Company of this Agreement.
The
Company agrees to provide the Executive with periodic updates regarding Company
plans for his succession to the Chief Executive Officer position, and will
use
reasonable efforts, subject to corporate governance procedures, to notify the
Executive of any changes in succession plans by no later than June 30,
2007.
SECTION
III
PERIOD
OF EMPLOYMENT
The
period of the Executive's employment under this Agreement (the "Period of
Employment") shall begin on the Effective Date and shall end on the third
anniversary of the Effective Date (the “Term”), subject to earlier termination
as provided in this Agreement. Effective upon the expiration of the Term,
Executive’s employment hereunder shall be deemed to be automatically extended,
upon the same terms and conditions, for an additional period of one year (the
“Additional
Term”)
commencing upon the expiration of the Term unless either party shall have given
written notice to the other, at least six (6) months prior to the expiration
of
the Term of its intention not to extend the Period of Employment Period
hereunder; provided
that any
such notice of non-extension delivered by the Company to Executive shall be
deemed to constitute a Constructive Discharge (as defined below) of the
Executive. As of the Effective Date, Executive shall cease to be employed by
Cendant.
SECTION
IV
COMPENSATION
AND BENEFITS
For
all
services rendered by the Executive pursuant to this Agreement during the Period
of Employ-ment, including services as an executive officer, director or
committee member of the Company or any subsidiary or affiliate of the Company,
the Executive shall be compensated as follows:
(a) Base
Salary
The
Company shall initially pay the Executive a fixed base salary ("Base Salary")
of
not less than $1,000,000, per annum, and thereafter the Executive shall be
eligible to receive annual increases as the Board deems appropriate, in
accordance with the Company’s customary procedures regarding salaries of senior
officers. Base Salary shall be payable according to the customary payroll
practices of the Company, but in no event less frequently than once each
month.
(b) Annual
Incentive Awards
The
Executive shall be eligible to earn a Target Annual Bonus for each fiscal year
of the Company ending during the Employment Period (each, an "Annual Bonus")
equal to 200% of the Executive’s Base Salary for such fiscal year, if the
Company achieves the target performance goals established by the Incentive
Compensation Committee (the "Committee") for such fiscal year The Committee
may
establish such metrics whereby the Executive may earn an Annual Bonus in excess
of the Target Annual Bonus or an Annual Bonus less than the Target Annual Bonus.
Any
Annual Bonus that becomes payable to the Executive pursuant to this Section
shall be paid to the Executive as soon as reasonably practicable following
receipt by the Board of the audited consolidated financial statements of the
Company for the relevant fiscal year, but in no event later than two and a
half
(2 ½) months following the end of the applicable fiscal year in which such
Annual Bonus was earned. The Executive shall be entitled to receive any Annual
Bonus that becomes payable in a lump sum cash payment, or, at his election,
in
any form that the Board generally makes available to the Company’s executive
management team; provided that any such election is made by the Executive in
compliance with Section 409A of the Internal Revenue Code of 1986, as amended
(the "Code") and the regulations promulgated thereunder.
(c) Long-Term
Incentive Awards
Upon
the
Effective Date, the Company shall grant the Executive a long-term incentive
equity award with a grant date value equal to $5 million (the "Initial Realogy
Grant"). The Initial Realogy Grant shall be subject to the terms and conditions
of the Company’s 2006 Equity and Incentive Plan and the applicable agreement
evidencing such award, including such vesting provisions as determined by the
Committee (subject to accelerated vesting in accordance with Section VIII
below). Thereafter, the Executive shall be eligible for long term incentive
awards as determined by the Committee in its discretion.
(d) Additional
Benefits
The
Executive shall be entitled to participate in all other compensation and
employee benefit plans or programs and receive all benefits and perquisites
for
which salaried employees of the Company generally are eligible under any plan
or
program now in effect, or later established by the Company, on the same basis
as
similarly situated senior executives of the Company with comparable duties
and
responsibilities. The Executive shall participate to the extent permissible
under the terms and provisions of such plans or programs, and in accordance
with
the terms of such plans and program.
(e) Further
Consideration
The
Company acknowledges and agrees to provide the Executive the following benefits
notwithstanding anything herein to the contrary. Upon the Executive’s
termination of employment from the Company and its subsidiaries for any reason,
including, without limitation, due to or following any non-renewal of this
Agreement, Resignation, or termination by the Company with or without Cause,
the
Executive and each person who is his covered dependent at such time under each
applicable plan sponsored by the Company, shall remain eligible to continue
to
participate in all of such plans (as they may be modified from time to time
with
respect to all senior executive officers), or such other plans subsequently
made
available to senior executive officers of the Company or any successor Company
(the “Post-Employment Plans”) until the end of the plan year in which the
Executive reaches, or would have reached, age seventy-five (75) (such benefits,
the "Post-Employment Benefits"). The Executive is currently eligible to
participate in the following plans: Executive Physical Exams, Medical Expense
Reimbursement Plan (MERP), Medical Insurance, Dental Insurance, Group Life
Insurance (up to $1 million coverage on
Executive’s
life), Vision Service Plan. Coverage under such Post-Employment Plans shall
be
subject to the Executive and/or such dependents, as applicable, continuing
to
pay the applicable employee portion of any premiums, co-payments, deductibles
and similar costs Solely with respect to the Executive’s dependents, such
coverage shall terminate upon such earlier date if and when they become
ineligible for any such benefits under the terms of such plans and provided,
that
once the Executive or his dependents become eligible for Medicare or any other
government-sponsored medical insurance plan, or if the Executive is eligible
to
participate in any other company’s medical insurance plan as an employee after
the termination of his employment, the Executive or his dependents shall utilize
such government plan or other company plan, and the Company’s insurance
obligations as part of the Post-Employment Benefits hereunder shall become
secondary to such government plan or other company plan. Notwithstanding the
foregoing, the Company may meet any of its foregoing obligations under the
Post-Employment Plans by paying for, or providing for the payment of, such
benefits directly or through alternative plans or individual policies which
are
no less favorable in all material respects (with respect to both coverage and
cost to the Executive) to the Post-Employment Plans, provided that the Company
shall use its best efforts to assure that provision of the Post-Employments
Benefits complies with Code Section 409A.
SECTION
V
BUSINESS
EXPENSES
The
Company shall reimburse the Executive for all reasonable travel and other
expenses incurred by the Executive in connection with the performance of his
duties and obligations under this Agreement. The Executive shall comply with
such limitations and reporting requirements with respect to expenses as may
be
established by the Company from time to time and shall promptly provide all
appropriate and requested documentation in connection with such expenses.
Further, the Executive will receive access to Company aircraft or alternative
air transportation, subject to applicable Company policies.
SECTION
VI
DEATH
AND DISABILITY
The
Period of Employment shall end upon the Executive's death. If the Executive
becomes Disabled (as defined below) during the Period of Employment, the Period
of Employment may be terminated at the option of the Executive upon no-tice
of
resignation to the Company, or at the option of the Company upon notice of
termination to the Executive. For purposes of this Agreement, "Disability"
shall
have the meaning set forth in Section 409A ("Code Section 409A") of the Code.
The Company's obligation to make payments to the Executive under this Agreement
shall cease as of such date of termination, except for Base Salary and any
Incentive Compensation Awards earned but unpaid as of the date of such
termination, and, in such event (a) each of the Executive’s then outstanding
options to purchase shares of Cendant common stock (including options to
purchase shares of common stock of entities resulting from the adjustment to
such Cendant options in connection with the Cendant’s plan to separate into 2 or
more public companies (the "Adjusted Options")) which were granted on or after
September 3, 1998 shall become immediately and fully vested and exercisable
and,
in accordance with the terms and conditions applicable to such options set
forth
in the Prior Agreement, shall remain exercisable until the first to occur of
the
fifth (5th)
anniversary of the Executive’s termination of employment and the original
expiration date of such option, (b) each option to purchase shares of the
Company common stock granted on or after the Effective Date (excluding any
Adjusted Option to acquire the Company common stock) shall become immediately
and fully vested and exercisable and, notwithstanding any term or provision
thereof to the contrary, shall remain exercisable until the first to occur
of
the third (3rd
)
anniversary of the Executive’s termination of employment and the original
expiration date of such option, and (c) all other long-term equity awards
(including, without limitations, restricted stock units) then outstanding shall
become immediately vested.
SECTION
VII
EFFECT
OF TERMINATION OF EMPLOYMENT
(a) Without
Cause Termination and Constructive Discharge.
If the
Executive's employment terminates during the Period of Employment due to either
a Without Cause Termi-nation or a Constructive Discharge (each as defined
below): (i) the Company shall pay the Executive (or his surviving spouse, estate
or personal representative, as applicable), in accordance with paragraph (d)
below, an amount equal to 299% multiplied by the sum of (A) the Executive’s then
current Base Salary, plus (B) the Executive’s then current target Incentive
Compensation Award; (ii) each of the Executive’s then outstanding options,
including the Adjusted Options, to purchase shares of common stock which were
granted on or after June 1, 2001 and prior to the Effective Date shall become
immediately and fully vested and exercisable and in accordance with the terms
and conditions applicable to such options set forth in the Prior Agreement,
shall remain exercisable until the first to occur of the fifth (5th)
anniversary of the Executive’s termination of employment and the original
expiration date of such option; (iii) each option to purchase shares of the
Company common stock or stock appreciation right granted on or after the
Proposed Transaction
(excluding
any Adjusted Option to acquire the Company common stock) shall become
immediately and fully vested and exercisable and, notwithstanding any term
or
provision thereof to the contrary, shall remain exercisable until the first
to
occur of the third (3rd
)
anniversary of the Executive’s termination of employment and the original
expiration date of such option or stock appreciation right, and (iv) all other
long-term equity awards (including, without limitation, the restricted stock
units) shall become immediately vested.
Further,
if the Executive’s employment terminates by reason of Without Cause Termination
or Constructive Discharge during the Period of Employment or a Resignation
at
any time during or after the expiration of the Period of Employment, each of
the
Executive’s then outstanding options to purchase shares of Cendant common stock,
including the Adjusted Options, which were granted on or after September 3,
1998
and prior to December 31, 2000, in accordance with the terms and conditions
applicable to such options set fort in the Prior Agreement, shall remain
exercisable until the first to occur of the fifth (5th)
anniversary of the Executive’s termination of employment and the original
expiration date of such option.
(b) Termination
for Cause; Resignation.
If the
Executive's employment terminates due to a Termination for Cause or a
Resignation, Base Salary and any Incentive Compensation Awards earned but unpaid
as of the date of such termination shall be paid to the Executive in accordance
with paragraph (d) below. Outstanding stock options and other equity awards
held
by the Executive as of the date of termination shall be treated in accordance
with their terms (except as provided in paragraph (a) above). Except as provided
in this paragraph, the Company shall have no further obligations to the
Executive hereunder.
(c) For
purposes of this Agreement, the following terms have the following
meanings:
i. "Termination
for Cause" means (a) the Executive’s willful failure to substantially perform
his duties as an employee of the Company or any subsidiary (other than any
such
failure resulting from incapacity due to physical or mental illness), (b) any
act of fraud, misappropriation, dishonesty, embezzlement or similar conduct
against the Company or any subsidiary, (c) the Executive’s conviction of a
felony or any crime involving moral turpitude (which conviction, due to the
passage of time or otherwise, is not subject to further appeal), (d) the
Executive’s gross negligence in the performance of his duties or (e) the
Executive purposefully or negligently makes (or has been found to have made)
a
false certification to the Company pertaining to its financial
statements.
ii. "Constructive
Discharge" means (a) any material failure of the Company to fulfill its
obligations under this Agreement (including without limitation any reduction
of
the Base Salary, as the same may be increased during the Period of Employment,
or other element of compensation), (b) the Business Office is relocated to
any
location which is more than 30 miles from the city limits of Parsippany, New
Jersey, (c) a person, other than Henry R. Silverman, becoming the Chief
Executive Officer of the Company, (d) during the Initial Period, the Executive
no longer reports directly to Henry R. Silverman as the Chief Executive Officer
of the Company, (e) during the Remaining Period the
Executive is not the Chief Executive Officer and the most senior executive
officer of the Company, (f) during the Remaining Period the Executive does
not
report directly to the board of directors of the Company, (g) the Company
provides notification under Section III of this Agreement that it is not
extending the Agreement for an Additional Term, or
(h)
the Executive is not nominated to be a member of the Board of the Company.
The
Executive shall provide the Company a written notice of his intention to resign
within 60 days after the Executive knows or has reason to know of the occurrence
of any such event which notice describes the circumstances being relied on
for
the termination with respect to this Agreement. With respect to clauses (a)
and
(b) of this paragraph, the Company shall have ten (10) days after receipt of
such notice to remedy the event prior to the termination for Constructive
Discharge and, upon the timely remedy of such event, such event shall no longer
constitute a basis for Constructive Discharge.
iii. "Without
Cause Termination" or “Terminated Without Cause” means termination of the
Executive's employment by the Company other than due to death, dis-ability,
or
Termination for Cause.
iv. “Resignation”
means a termination of the Executive’s employment by the Executive, other than
in connection with a Constructive Discharge.
(d) Conditions
to Payment and Acceleration.
All
payments due to the Executive under this Section VII shall be made as soon
as
practicable, but in no event earlier than the date permitted under Section
409A
of the Code, to the extent such payment is subject to Section 409A of the Code;
provided,
however,
that
such payments shall be subject to, and contingent upon, the execution by the
Executive (or his beneficiary or estate) of a release of claims against the
Company and its affiliates in such reasonable form determined by the Company
in
its sole discretion. The payments due to the Executive under this Section VII
shall be in lieu of any other severance benefits otherwise payable to the
Executive under any severance plan of the Company or its
affiliates.
SECTION
VIII
OTHER
DUTIES OF THE EXECUTIVE
DURING
AND AFTER THE PERIOD OF EMPLOYMENT
(a) The
Executive shall, with reasonable notice during or after the Period of
Employment, furnish information as may be in his possession and fully cooperate
with the Company and its affiliates as may be requested in connection with
any
claims or legal action in which the Company or any of its affiliates is or
may
become a party. After the Period of Employment, the Executive shall cooperate
as
reasonably requested with the Company and its affiliates in connection with
any
claims or legal actions in which the Company or any of its affiliates is or
may
become a party. The Company agrees to reimburse the Executive for any reasonable
out-of-pocket expenses incurred by Executive by reason of such cooperation,
including any loss of salary, and the Company shall make reasonable efforts
to
minimize interruption of the Executive’s life in connection with his cooperation
in such matters as provided for in this paragraph.
(b) The
Executive recognizes and acknowledges that all information pertaining to this
Agreement or to the affairs; business; results of operations; accounting
methods, practices and procedures; members; acquisition candidates; financial
condition; clients; customers or other relationships of the Company or any
of
its affiliates ("Information") is confidential and is a unique and valuable
asset of the Company or any of its affiliates. Access to and knowledge of
certain of the Information is essential to the performance of the Executive's
duties under this Agreement. The Executive shall not during the Period of
Employment or thereafter, except to the extent reasonably necessary in
performance of his duties under this Agreement, give to any person, firm,
association, corporation, or governmental agency any Information, except as
may
be required by law. The Executive shall not make use of the Information for
his
own purposes or for the benefit of any person or organization other than the
Company or any of its affiliates. The Executive shall also use his best efforts
to prevent the disclosure of this Information by others. All records, memoranda,
etc. relating to the business of the Company or its affiliates, whether made
by
the Executive or otherwise coming into his possession, are confidential and
shall remain the property of the Company or its affiliates.
(c) (i) During
the Period of Employment and for a two (2) year period thereafter (the
"Restricted Period"), irrespective of the cause, manner or time of any
termination, the Executive shall not use his status with the Company or any
of
its affiliates to obtain loans, goods or services from another organization
on
terms
that would not be available to him in the absence of his relationship to the
Company or any of its affiliates.
(ii) During
the Restricted Period, the Executive shall not make any statements or perform
any acts intended to have the effect of advancing the interest of any existing
competitors (or any entity the Executive knows to be a prospective competitor)
of the Company or any of its affiliates or in any way injuring the interests
of
the Company or any of its affiliates. During the Restricted Period, the
Executive, without prior express written approval by the Board, shall not engage
in, or directly or indirectly (whether for compensation or otherwise) own or
hold proprietary interest in, manage, operate, or control, or join or
participate in the ownership, management, operation or control of, or furnish
any capital to or be connected in any manner with, any party which competes
in
any way or manner with the business of the Company or any of its affiliates,
as
such business or businesses may be conducted from time to time, either as a
general or limited partner, proprietor, common or preferred shareholder,
officer, director, agent, employee, consultant, trustee, affiliate, or
otherwise. The Executive acknowledges that the Company's and its affiliates'
businesses are conducted nationally and internationally and agrees that the
provisions in the foregoing sentence shall operate throughout the United States
and the world.
(iii) During
the Restricted Period, the Executive, without express prior written approval
from the Board, shall not solicit any members or the then current clients of
the
Company or any of its affiliates for any existing business of the Company or
any
of its affiliates or discuss with any employee of the Company or any of its
affiliates information or operation of any business intended to compete with
the
Company or any of its affiliates.
(iv) During
the Restricted Period, the Executive shall not interfere with the employees
or
affairs of the Company or any of its affiliates or solicit or induce any person
who is an employee of the Company or any of its affiliates to terminate any
relationship such person may have with the Company or any of its affiliates,
nor
shall the Executive during such period directly or indirectly engage, employ
or
compensate, or cause or permit any person with which the Executive may be
affiliated, to engage, employ or compensate, any employee of the Company or
any
of its affiliates. The Executive hereby represents and warrants that the
Executive has not entered into any agree-ment, understanding or arrangement
with
any employee of the Company or any of its affiliates pertaining to any business
in which the Executive has participated or plans to participate, or to the
employment, engagement or compensation of any such employee.
(v) For
the
purposes of this Agreement, proprietary interest means legal or equitable
ownership, whether through stock holding or otherwise, of an equity interest
in
a busi-ness, firm or entity or ownership of more than 5% of any class of equity
interest in a publicly-held company and the term "affiliate" shall include
without limitation all subsidiaries and licensees of the Company.
(d) The
Executive hereby acknowledges that damages at law may be an insufficient remedy
to the Company if the Executive violates the terms of this Agreement and that
the Company shall be entitled, upon making the requisite showing, to preliminary
and/or permanent injunctive relief in any court of competent jurisdiction to
restrain the breach of or otherwise to specifically enforce any of the covenants
contained in this Section VIII without the necessity of showing any actual
damage or that monetary damages would not provide an adequate remedy. Such
right
to an injunction shall be in addition to, and not in limitation of, any other
rights or remedies the Company may have. Without limiting the generality of
the
foregoing, neither party shall oppose any motion the other party may make for
any expedited discovery or hearing in connection with any alleged breach of
this
Section VIII.
(e) The
period of time during which the provisions of this Section VIII shall be in
effect shall be extended by the length of time during which the Executive is
in
breach of the terms hereof as determined by any court of competent jurisdiction
on the Company's application for injunctive relief.
(f) The
Executive agrees that the restrictions contained in this Section VIII are an
essential element of the compensation the Executive is granted hereunder and
but
for the Executive's agreement to comply with such restrictions, the Company
would not have entered into this Agreement.
SECTION
IX
INDEMNIFICATION
The
Company shall indemnify the Executive to the fullest extent permitted by the
laws of the state of the Company's incorporation in effect at that time, or
the
certificate of incorporation and by-laws of the Company, whichever affords
the
greater protection to the Executive (including payment of expenses in advance
of
final disposition of a proceeding).
SECTION
X
CERTAIN
TAXES
Anything
in this Agreement or in any other plan, program or agreement to the contrary
notwithstanding and except as set forth below, in the event that (i) the
Executive becomes entitled to any benefits or payments under Section VII hereof
and (ii) it shall be determined that any payment or distribution by the Company
to or for the benefit of the Executive (whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section
X) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of
the Internal Revenue Code of 1986, as amended, or any interest or penalties
are
incurred by the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, hereinafter collectively referred
to as the “Excise Tax”), then the Executive shall be entitled to receive an
additional payment (a “Gross-Up Payment”) in an amount such that after payment
by the Executive of all taxes (including any interest or penalties imposed
with
respect to such taxes), including, without limitation, any income taxes (and
any
interest and penalties imposed with respect thereto) and Excise Tax imposed
upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing
provisions of this Section X, if it shall be determined that the Executive
is
entitled to a Gross-Up Payment, but that the Payments do not exceed 110% of
the
greatest amount (the “Reduced Amount”) that could be paid to the Executive such
that the receipt of Payments would not give rise to any Excise Tax, then no
Gross-Up Payment shall be made to the Executive and the Payments, in the
aggregate, shall be reduced to the Reduced Amount, provided, however, that
the
payments or benefits to be eliminated in effecting such reduction shall be
agreed upon between the Company and the Executive. All determinations required
to be made under this Section X, including whether and when a Gross-Up Payment
is required and the amount of such Gross-Up Payment and the assumptions to
be
utilized in arriving at such determination, shall be made by Deloitte &
Touche LLP or such other certified public accounting firm as may be designated
by the Company.
SECTION
XI
MITIGATION
The
Executive shall not be required to mitigate the amount of any payment provided
for hereunder by seeking other employment or otherwise, nor
shall
the
amount of any such payment be reduced by any compensation earned by the
Executive as the result of employment by another employer after the date the
Executive's employ-ment hereunder terminates.
SECTION
XII
WITHHOLDING
TAXES
The
Executive acknowledges and agrees that the Company may directly or indirectly
withhold from any payments under this Agreement all federal, state, city or
other taxes that shall be required pursuant to any law or governmental
regulation.
SECTION
XIII
EFFECT
OF PRIOR AGREEMENTS
This
Agreement shall supersede any prior agreements between Cendant, the Company,
and
the Executive (including but not limited to the Prior Agreement) hereof, and
any
such prior agreement shall be deemed terminated without any remain-ing
obligations of either party thereunder.
SECTION
XIV
CONSOLIDATION,
MERGER OR SALE OF ASSETS
Nothing
in this Agreement shall preclude the Company from consolidating or merging
into
or with, or transferring all or substantially all of its assets to, another
corporation which assumes this Agreement and all obligations and undertakings
of
the Company hereunder. If (i)
there
is a merger, consolidation or other business combination involving the Company,
or (ii) all or substantially all of the voting stock of the Company is held
by another public company, the term "the Company" shall mean the successor
to
the Company’s business or assets referred to in (i) above or such public company
referred to in (ii) above, and
this
Agreement shall continue in full force and effect. Notwithstanding the
foregoing, the Company shall require any successor thereto, by agreement in
form
and substance reasonably 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 succession had taken
place. Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of the Agreement and
shall entitle the Executive to compensation from the Company in the same amount
and on the same terms as Executive would be entitled hereunder if the Company
had terminated Executive’s employment Without Cause as described
herein,
except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the date of
termination.
SECTION
XV
MODIFICATION
This
Agreement may not be modified or amended except in writing signed by the
parties. No term or condition of this Agreement shall be deemed to have been
waived except in writing by the party charged with waiver. A waiver shall
operate only as to the specific term or condition waived and shall not
constitute a waiver for the future or act on anything other than that which
is
specifically waived.
SECTION
XVI
GOVERNING
LAW
This
Agreement has been executed and delivered in the State of New Jersey and its
validity, interpretation, performance and enforcement shall be governed by
the
internal laws of that state.
SECTION
XVII
ARBITRATION
(a) Any
controversy, dispute or claim arising out of or relating to this Agreement
or
the breach hereof which cannot be settled by mutual agreement (other than with
respect to the matters covered by Section VIII for which the Company may, but
shall not be required to, seek injunctive relief) shall be finally settled
by
binding arbitration in accordance with the Federal Arbitration Act (or if not
applicable, the applicable state arbitration law) as follows: Any party who
is
aggrieved shall deliver a notice to the other party setting forth the specific
points in dispute. Any points remaining in dispute twenty (20) days after the
giving of such notice may be submitted to arbitration in New York, New York,
to
the American Arbitration Association, before a single arbitrator appointed
in
accordance with the arbitration rules of the American Arbitration Association,
modified only as herein expressly provided. After the aforesaid twenty (20)
days, either party, upon ten (10) days notice to the other, may so submit the
points in dispute to arbitration. The arbitrator may enter a default decision
against any party who fails to participate in the arbitration
proceedings.
(b) The
decision of the arbitrator on the points in dispute shall be final, unappealable
and binding, and judgment on the award may be entered in any court having
jurisdiction thereof.
(c) Except
as
otherwise provided in this Agreement, the arbitrator shall be authorized to
apportion its fees and expenses and the reasonable attorneys' fees and ex-penses
of any such party as the arbitrator deems appropriate. In the absence of any
such apportionment, the fees and expenses of the arbitrator shall be borne
equally by each party, and each party shall bear the fees and expenses of its
own attorney.
(d) The
parties agree that this Section XVII has been included to rapidly and
inexpensively resolve any disputes between them with respect to this Agreement,
and that this Section XVII shall be grounds for dismissal of any court action
commenced by either party with respect to this Agreement, other than
post-arbitration actions seeking to enforce an arbitration award. In the event
that any court determines that this arbitration procedure is not binding, or
otherwise allows any litigation regarding a dispute, claim, or controversy
covered by this Agreement to proceed, the parties hereto hereby waive any and
all right to a trial by jury in or with respect to such litigation.
(e) The
parties shall keep confidential, and shall not disclose to any person, except
as
may be required by law, the existence of any controversy hereunder, the referral
of any such controversy to arbitration or the status or resolution
thereof.
SECTION
XVIII
SURVIVAL
Sections
VIII, IX, X, XI, XII and XIII shall continue in full force in accordance with
their respective terms notwithstanding any termination of the Period of
Employment.
SECTION
XIX
SEPARABILITY
All
provisions of this Agreement are intended to be severable. In the event any
provision or restriction contained herein is held to be invalid or unenforceable
in any respect, in whole or in part, such finding shall in no way affect the
validity or enforceability of any other provision of this Agreement. The parties
hereto
further
agree that any such invalid or unenforceable provision shall be deemed modified
so that it shall be enforced to the greatest extent permissible under law,
and
to the extent that any court of competent jurisdiction determines any
restriction herein to be unreasonable in any respect, such court may limit
this
Agreement to render it reasonable in the light of the circumstances in which
it
was entered into and specifically enforce this Agreement as
limited.
*****
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the
Effective Date.
REALOGY
CORPORATION
/s/
Henry R. Silverman
By:
Henry
R. Silverman
Title:
Chief
Executive Officer
RICHARD
A. SMITH
/s/
Richard A. Smith
Exhibit
99.1
Cendant
Corporation Announces Launch of Investor Meetings
Related
To Spin-Off of Wyndham Worldwide Corporation
NEW
YORK, June
20, 2006
-
Cendant Corporation (NYSE:
CD)
today
announced the commencement of meetings with institutional investors in
connection with the planned spin-off of Wyndham Worldwide
Corporation.
The
slides and related materials to be presented during the investor meetings may
be
accessed on Cendant’s and Wyndham’s websites at www.cendant.com
and
www.wyndhamworldwide.com,
respectively.
About
Cendant Corporation
Cendant
is primarily a provider of travel and residential real estate services. With
approximately 85,000 employees, New York City-based Cendant provides these
services to businesses and consumers in over 100 countries. More information
about Cendant, its companies, brands and current SEC filings may be obtained
by
visiting Cendant’s Web site at www.cendant.com.
About
Wyndham Worldwide Corporation
As
one of
the world’s largest hospitality companies, Wyndham Worldwide offers individual
consumers and business-to-business customers a broad suite of hospitality
products and services across various accommodation alternatives and price ranges
through its premier portfolio of world-renowned brands. Wyndham Worldwide
encompasses more than 6,300 franchised hotels with approximately 525,000 hotel
rooms worldwide. It serves more than three million members of RCI’s vacation
exchange networks, offering its members and rental customers access to
approximately 55,000 vacation properties comprised of approximately 51,000
vacation rental properties and approximately 4,000 vacation ownership resorts
located in over 100 countries. In addition, Wyndham Worldwide develops, markets
and sells vacation ownership interests and provides consumer financing to owners
through its network, which includes over 140 vacation ownership resorts serving
more than 750,000 owners throughout North America, the Caribbean and the South
Pacific. Wyndham Worldwide is headquartered in Parsippany, NJ, and is supported
by approximately 28,800 employees around the world.
Media
Contacts:
Elliot
Bloom, Cendant Corporation
212-413-1832
Investor
Contacts:
Sam
Levenson, Cendant Corporation
212-413-1834
Henry
A.
Diamond, Cendant Corporation
212-413-1920
Margo
C.
Happer
Wyndham
Worldwide Corporation
973-496-2705