(a) | "Cendant" shall mean Cendant Corporation, a Delaware cor-pora-tion. |
(b) | "Award Agreement" shall mean a written agree-ment between Cendant and a Participant evidencing an award of Restricted Stock Units or Stock Options. |
(c) | "Board" shall mean the Board of Directors of Cendant. |
(d) | "Committee" shall mean the Compensation Commit-tee of the Board. |
(e) | "Company" shall mean, collectively, Cendant and its sub-sidiar-ies. |
(f) | "Participant" shall mean an officer or key employee of the Company who is, pur-su-ant to Sec-tion 4 of the Plan, selected and designated by the Committee in writing to par-tici-pate here-in, and who has been provided an Award Agreement. |
(g) | "Plan" shall mean this Cendant Corporation 2004 Performance Metric Long Term Incentive Plan. |
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(h) | “Change-of-Control Transaction” shall mean any transaction or series of transactions pursuant to or as a result of which (i) during any period of not more than 24 months, individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a third party who has entered into an agreement to effect a transaction described in clause (ii), (iii) or (iv) of this paragraph) whose election by the Board or nomination for election by Cendant's stockholders was approved by a vote of at least a majority of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved (other than approval given in connection with an actual or threatened proxy or election contest), cease for any reason to constitute at least a majority of the members of the Board, (ii) any person or entity is or becomes, directly or indirectly, the beneficial owner of 50% or more of the common stock of Cendant (or other securities of Cendant having generally the right to vote for election of the Board), (iii) Cendant or any subsidiary shall sell, assign or otherwise transfer, directly or indirectly, assets (including stock or other securities of subsidiaries) having a fair market or book value or earning power of 50% or more of the assets or earning power of Cendant and its subsidiaries (taken as a whole) to any third party, other than Cendant or a wholly-owned subsidiary thereof, (iv) control of 50% or more of the business of Cendant shall be sold, assigned or otherwise transferred directly or indirectly to any third party, (v) there is consummated a merger or consolidation of Cendant with any other corporation, other than (A) a merger or consolidation which would result in the voting securities of Cendant outstanding immediately prior to such event continuing to represent (either by remaini ng outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the securities of Cendant or such surviving entity or any parent thereof outstanding immediately after such event or (B) a merger or consolidation effected to implement a recapitalization of Cendant (or similar transaction) in which no person or entity becomes the beneficial owner or more than 50% or more of the combined voting power of Cendant’s then outstanding securities or (vi) the stockholders of Cendant approve a plan of liquidation or dissolution. |
(i) | “Award” shall mean an award of Restricted Stock Units or Stock Options granted pursuant to this Plan. |
(j) | “Restricted Stock Unit” shall mean an Award granted pursuant to Section 5(c) of this Plan. |
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(k) | “Stock Option” shall mean an Award granted pursuant to Section 5(b) of this Plan. |
(l) | “Cendant Stock Plans” shall mean the following stock plans maintained by Cendant, as amended from time to time: (1) 1999 Broad-Based Employee Stock Option Plan; (2) 1997 Stock Option Plan and (3) Galileo International 1999 Equity and Performance Incentive Plan. |
(m) | “Cendant Stock” shall mean common stock of Cendant, par value $0.01 per share, of the series designated CD Common Stock. |
(n) | “Disability” shall mean a Participant’s termination of employment by reason of “Disability” within the meaning of the Company-sponsored Long Term Disability Plan, as in effect from time to time, providing eligibility to employees of Cendant Operations, Inc. |
(o) | “Performance Goals” shall mean a set of pre-established performance goals relating to the financial performance of Cendant and/or any of its subsidiaries or divisions, including without limitation, TUG. |
(p) | “TUG” or “Total Unit Growth” shall mean, in respect of any performance period, as the percentage change in the Company’s Adjusted EBITDA, as defined below,plus, the Company’s Free Cash Flow Yield, as defined below. |
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(q) | “as reported” shall mean as disclosed in the Company’s Annual Report on Form 10-K or, if combined within another line item or immaterial to disclose separately, as set forth in the Company’s books and records. |
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(i) | the Participant executing a covenant not to compete and confidentiality agreement in such form as the Committee shall prescribe; and/or |
(ii) | the Participant executing a covenant to devote his or her best efforts to create and deliver value to the stockholders of Cendant; and/or |
(iii) | such other conditions as the Committee shall determine in its sole discretion. |
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1. | If a disposition is accounted for as “discontinued operations” in accordance with U.S. GAAP, then all historical years of EBITDA and Free Cash Flow shall be adjusted by eliminating the historical results of the disposed entity in the manner reported on the Company’s Annual Report on Form 10-K. Further, any assets, cash or other consideration (if any) received in connection with such disposition shall not be considered Free Cash Flow. |
2. | If a disposition with greater than $50 million of “total consideration” (as defined below) is not accounted for as “discontinued operations” in accordance with U.S. GAAP, then all historical years of EBITDA and Free Cash Flow shall be adjusted by the Company by eliminating the historical results of the disposed entity by making such appropriate adjustments which would have otherwise been made assuming the disposition was accounted for as “discontinued operations.” Further, any assets, cash or other consideration (if any) received in connection with such disposition shall not be considered Free Cash Flow. |
3. | Once determined for a particular year, TUG or cumulative TUG used to determine vesting is fixed and is not adjusted as a result of acquisitions, dispositions or other transactions. |
1. | There shall be no adjustment to EBITDA or Free Cash Flow in respect of any acquisition with a “total consideration” of $15 million or less (“Small Acquisitions”) (specifically, Free Cash Flow will be reduced by such “total consideration” in the year of acquisition). The “total consideration” will consist of the total cash cost of the acquisition (as reported) (i.e., total cash dispersed less cash acquired) plus non-amortization related acquisition and integration related costs and any assumed debt and |
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any equity issued (stock issued and conversion of stock options, valued as of the closing or as otherwise provided under GAAP). |
2. | For acquisitions other than Small Acquisitions, EBITDA shall be adjusted in order to neutralize the impact of such acquisition in the year of such acquisition. |
3. | For such acquisitions other than Small Acquisitions, Free Cash Flow shall be adjusted to exclude the free cash flow results of the acquired entity for the entirety of the fiscal year in which the acquisition occurs. The amount of the Free Cash Flow adjustment will be exactly as set forth in the applicable ICM used to review and approve the transaction. Notwithstanding Company procedure, for purposes of this Plan, in the event that any acquisition closes more than 90 days following the date of the ICM, or in the event that an acquisition closes in the calendar year following the date of the ICM, then an updated ICM will be required. For all adjustments made pursuant to |
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any ICM, whether an original ICM or an updated ICM, the financial information set forth in the ICM shall be pro rated to account for the period of time which elapses following the date of the ICM through the date of closing. The Free Cash Flow noted in the ICM for the current year will be removed from the actual results of the Company without regard to the actual results of the acquired entity. Free Cash Flow will be adjusted to exclude the total cash cost of the acquisition (as reported) (i.e., total cash dispersed less cash acquired) plus non-amortization related acquisition and integration related costs. |
4. | For acquisitions other than Small Acquisitions, but only those for which the Company pays “total consideration” in excess of the “enterprise value multiple” (determined by the Committee to equal 9), multiplied by the acquired entity’s prior calendar year GAAP earnings before interest, taxes, depreciation and amortization (as set forth in the ICM) (“Acquiree EBITDA”), Free Cash Flow shall be adjusted. |
5. | Once determined for a particular year, TUG or cumulative TUG used to determine vesting is fixed and is not adjusted as a result of acquisitions, dispositions or other transactions. |
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