1
Exhibit 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is between Michael S. Karsner, an individual
("Executive") and ANC Rental Corporation, a corporation. ("the Company")
WHEREAS, the Company has offered and Executive has accepted employment
under the terms and conditions set forth below,
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and intending to be legally bound, the parties agree as follows:
1. EMPLOYMENT. During the term hereof, the Company will employ
Executive and Executive will provide services as the President and Chief
Executive Officer, reporting to the Chairman and the Board of Directors.
Executive will devote his full time and attention to the faithful and diligent
performance of his office and will comply in all respects with the policies of
the Company and the directives of the Board.
2. TERM. Subject to the provisions of Section 4 below, this Agreement
shall be effective as of June 30, 2000 and have an initial term of two years.
Thereafter the Agreement will continue in effect until terminated by either
party upon sixty days advance written notice of intent to terminate the
Agreement. The Company may, at its option, pay Executive's base salary for sixty
days in lieu of advance written notice.
3. COMPENSATION AND BENEFITS.Executive will be entitled to the
following compensation in exchange for his services:
a. An annual base salary of $520,000, payable on the Company's
normal pay dates, which salary will be reviewed annually by
the Compensation Committee and may be increased, but not
decreased, during the term;
b. Executive will be eligible for an annual performance bonus
of between forty-five percent (45%) and sixty percent (60%) of
his base salary, with forty-five percent (45%) being earned
upon the Company's attainment of agreed upon financial targets
and up to sixty percent (60%) based upon incremental
achievement in excess of those targets, under guidelines
established by the Compensation Committee. The performance
bonus will be paid in or around the close of the first quarter
of the following year, after receipt of the audited financial
statements for the performance year. Executive must be
actively employed for the full calendar year to receive an
annual performance bonus for that year.
c. Executive will be eligible for stock option grants under
the terms of the ANC Rental Corporation Stock Option Plan,
which grants will be at such times, in such amounts and under
such terms as may be determined by the Compensation Committee
of the Board, except that Executive will be granted an initial
option amount of 750,000 shares of the Company's common stock
("Initial Option"),
2
which will become exercisable in the same increments as
determined by the Compensation Committee with respect to other
initial employee grants. The terms of this Agreement as they
relate to Executive's stock options will control over any
inconsistent terms in the Plan or option agreements.
d. At such times as the Company owns a corporate jet,
Executive will be entitled to use the Company's corporate jet
for personal reasons for up to 50 hours each year at the
Company's expense. If the Company does not own a corporate jet
but has access to a corporate jet that the Company uses for
business purposes, Executive shall be entitled to use such
corporate jet for personal reasons for up to 50 hours each
year at the Company's expense. Unused hours will not carry
over from year to year. The Company will withhold for taxes
and report income on a form W-2 based upon a personal-use
value determined under a policy to be approved by the
Compensation Committee.
e. Executive will be entitled to participate in such employee
benefit plans, perquisites, paid vacation and other
compensation programs as may from time to time be established
and offered by the Company to other executives and employees,
subject to the terms and provisions of those plans and
programs as the same may be occasionally amended and for so
long as they are offered generally to employees of the
Company, except that Executive's compensation upon termination
of employment will be determined solely under the provisions
of this Agreement.
4. TERMINATION. This Agreement may be terminated by the Company with or
without cause or upon Executive's disability, subject to the following
provisions for pay and benefits upon termination.
a. TERMINATION FOR CAUSE. If this Agreement is terminated by
the Company for cause (defined below), Executive will be
entitled to receive his base salary earned up to the date of
termination, and shall be entitled to no other compensation
thereafter. "Cause" means (i) commission of an act of
dishonesty, fraud or embezzlement relating to the Company;
(ii) intentional disclosure of trade secrets of the Company,
other than in the good faith performance of Executive's
duties; (iii) willful commission of a felony; or (iv)
intentionally engaging in competition with the Company or in
other activities which the Board determines to be actually or
potentially injurious to the Company's business or reputation.
b. TERMINATION WITHOUT CAUSE. If this Agreement is terminated
by the Company without Cause, Executive will be entitled to
the payments set forth below, which payments will be in lieu
of all other compensation or benefits payable by reason of the
termination of Executive's employment or this Agreement,
except for payment of any vested benefits under a
tax-qualified retirement plan: (1) if the termination occurs
before January 1, 2001, Executive will be paid the sum of
$780,000 in equal monthly installments over a period of
eighteen months; (2) if the termination occurs after January
1, 2001, Executive will be paid twice the
2
3
sum of his current annual base salary plus his minimum annual
bonus for the year in which he was terminated in equal monthly
installments over a period of twenty-four months. During the
period Executive is receiving severance payments hereunder,
all options issued under the Plan will continue to vest as
though Executive were actively employed. All options must be
exercised by Executive within one year after the last
severance payment is made, or if earlier, before the
expiration date of the option, or the option will become null
and void. Any payments made hereunder will be subject to
required withholdings for federal, state and local taxes. Any
amounts owed by Executive to the Company for any reason may be
deducted from the sums otherwise due hereunder. The severance
payments provided for herein will not be subject to reduction
by amounts earned by Executive after the termination of
employment.
c. TERMINATION FOR DEATH OR DISABILITY. If Executive is unable
because of physical or mental impairment to discharge his
duties hereunder for an aggregate period of six months during
any twelve-month period, the Board may, in its discretion,
elect to terminate Executive's employment and this Agreement.
This Agreement will terminate upon Executive's death. If the
Agreement is terminated due to disability or death, Executive
or his Estate will be paid the monetary payment provided for
in subparagraph b, above, as though his employment had been
terminated without cause, and his stock option rights will be
governed by the terms of the Plan.
5. CHANGE OF CONTROL. In the event of a change of control in which
Executive is not offered the position of Chief Executive Officer, Executive
shall be entitled to twice the sum of his current annual base salary, plus his
maximum annual bonus for each of those years, payable immediately.
6. COVENANT NOT TO COMPETE. Executive agrees that for a period of
one-year, if he voluntarily terminates his employment or is terminated for
cause, or during any period of time he is receiving severance payments under
Section 4 (b) above, if his employment is terminated involuntarily without
cause, he will not, within the United States or any foreign state in which the
Company has done or plans to do business, provide services as an employee,
director, consultant or independent contractor for, or establish an ownership
interest in, any entity which is engaged in the daily or insurance-replacement
car rental business, regardless of whether such entity also engages in other
lines of business. Executive's ownership of less than five percent of a
publicly-traded corporation will not be deemed to be a violation of this
provision. The severance payments provided above are conditioned upon
Executive's compliance with this provision. If Executive violates this
provision, he will, in addition to and not in lieu of any other legal or
equitable remedy, not be entitled to receive any further payments thereafter.
7. OTHER PROVISIONS.
a. This Agreement, and the benefits and compensation plans referenced
herein, constitute the entire agreement between the Company and
Executive respecting his employment. This Agreement may not be amended
or modified orally, but only by a written document,
3
4
approved by the Compensation Committee of the Board and signed by the
Executive and the Chairman of the Board.
b. The validity and interpretation of this Agreement will be governed
by the laws of the State of Florida, without regard to its choice or
conflict of law rules.
c. The failure or refusal of the Company to enforce this Agreement or
to assert a violation hereof in a particular situation shall not be,
and shall not be regarded as, a waiver of any other or subsequent
breach of the same or any other provision.
d. This Agreement will be enforceable by, and shall inure to the
benefit of, the Company, its successors and assigns. The Agreement may
be assigned by the Company to a successor without the consent of
Executive and without the necessity of a writing. This Agreement may
not be assigned in whole or in part by Executive.
IN WITNESS WHEREOF, the parties have set their hands on this
the 30th day of June, 2000.
EXECUTIVE
/s/ Edward L. Jones /s/ Michael S. Karsner
- -------------------------- ------------------------------
Witness Michael S. Karsner
ANC RENTAL CORPORATION
/s/ Marie D. Castellon By: /s/ Michael S. Egan
- -------------------------- -----------------------------
Attest
4