deshon.htm


    


    EXHIBIT
      10.5

    


    


    December
      19, 2008

    


    


    Mr.
      Larry
      De Shon

    Executive
      Vice President – Operations

    Avis
      Budget Group

    6
      Sylvan
      Way

    Parsippany,
      NJ 07054

    


    Dear
      Larry:

    


    We
      are
      pleased to confirm your continued employment with Avis Budget Car Rental, LLC,
      (“ABCR” or the “Company”), a subsidiary of Avis Budget Group, as Executive Vice
      President – Operations.   To comply with the requirements of
      Section 409A of the Internal Revenue Code and the regulations thereunder
      (“Section 409A”), the Company is hereby amending and restating this letter
      agreement as set forth herein.

    


    Your
      salary will continue to be paid on a bi-weekly basis at its current
      rate.  You will be eligible to receive a target bonus equal to the
      percentage of your regular base salary during the performance period that is
      no
      less than your current target bonus percentage, subject to the Company achieving
      performance goals as described in the Management Incentive Plan for ABG Senior
      Executive Leadership and you remaining employed with the Company through the
      payment date.  The bonus distribution is typically in the first
      quarter of the next year.

    


    Per
      ABCR’s standard policy, this letter is not intended, nor should it be
      considered, to be an employment contract for a definite or indefinite period
      of
      time. As you know, employment with ABCR is at will, and either you or ABCR
      may
      terminate your employment at any time, with or without cause.

    


    If,
      however, your employment with ABCR is terminated by ABCR other
      than:  (i) “for cause” (as defined below); (ii) in connection with
      your disability which prevents you or is reasonably expected to prevent you
      from
      performing services for ABCR for a period of 12 months (your
      "disability");  or (iii) death, you will receive (1) a lump-sum
      severance payment within 15 days following the Release Date (as defined below)
      equal to 200% of the sum of your base salary plus your target incentive (bonus)
      and (2) perquisites to include continued access to company car usage, financial
      planning and health coverage (Company-subsidized COBRA) for a period of 24
      months. For purposes of this agreement ‘company subsidized COBRA’ shall mean
      that the Company shall subsidize the total cost of COBRA coverage such that
      the
      contributions required of you for health plan participation during the 24 month
      period shall be substantially equal to the contributions required of active
      employed executives of ABG. All other programs and perquisites would be governed
      by their respective plan documents; provided, however, that the
      provision of such severance pay is subject to, and contingent upon, your
      executing within forty-five days following your termination of employment and
      failing to revoke a separation agreement with ABCR (the date on which the
      release is no longer revocable, the "Release Date"), in such form determined
      by
      ABCR, which requires Mr. Larry De Shon

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    December
      19, 2008

    Page
      Two

    


    you,
      in
      part, to release all actual and purported claims against ABCR and its affiliates
      and which also requires you to agree to: (i) protect and not disclose all
      confidential and proprietary information of ABCR; (ii) not compete, directly
      or
      indirectly, against ABCR for a period of no longer than one year after your
      employment separation or for a period of time and within a geographic scope
      determined by ABCR to be reasonable to protect ABCR’s business interests; and
      (iii) not solicit any ABCR employees, consultants, agents or customers during
      and for one year after your employment separation.

    


    In
      addition, if you experience an involuntary termination of employment from ABCR
      other than "for cause," and other than as a result of your "disability" or
      death, you will receive a lump sum cash payment within 15 days following the
      Release Date equal to the fair market value as of your termination of employment
      of your stock-based awards which would have vested in accordance with their
      original vesting schedule by the one-year anniversary of your termination of
      employment; provided that, to the extent required to achieve deductibility
      under
      Section 162(m) of the Internal Revenue Code of awards that vest based on the
      achievement of performance criteria, with respect to any awards that vest based
      on the achievement of performance criteria, for performance periods beginning
      after January 1, 2009, payment in respect of these awards shall not occur unless
      and until ACBR determines that all applicable performance goals have been
      attained (and you or your beneficiary will receive such payment at the same
      time, and on the same basis, as awards granted to other executive officers
      who
      are subject to the same performance goals vest).

    


    In
      addition, if you experience a termination of employment from ABCR due to your
      "disability" or death, you or your beneficiary will receive a lump sum cash
      payment within 15 days following the Release Date (or, in the event of your
      death, within 30 days of your death) equal to the fair market value as of your
      termination of employment of all of your stock-based awards.

    


    “Termination
      for Cause” shall mean: (i) your willful failure to substantially perform your
      duties as an employee of the Company or any subsidiary (other than any such
      failure resulting from your incapacity due to physical or mental illness);
      (ii)
      any act of fraud, misappropriation, dishonesty, embezzlement or similar conduct
      against the Company or any subsidiary; or (iii) 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).

    


    The
      payments and benefits described in this letter are intended to comply with
      Section 409A and, accordingly, to the maximum extent permitted, the terms of
      this letter shall be interpreted and administered to be in compliance with
      Section 409A of the Internal Revenue Code ("Section
      409A").  Notwithstanding anything to the contrary contained herein, to
      the extent required to avoid accelerated taxation and/or tax penalties under
      Section 409A, you will not be considered to have terminated employment with
      ACBR
      for purposes of the benefits provided in this letter and no payments shall
      be
      due to you on termination of employment hereunder until you are considered
      to
      have incurred a "separation from service" from ACBR within the meaning of
      Section 409A.  Each amount to be paid or benefit to be provided in
      this letter shall be construed as a separate identified payment for purposes
      of
      Section 409A.  Any payments described in this Agreement that are paid
      pursuant to a "separation pay plan" as described in Treas. Reg.
      1.409A-1(b)(9)(iii) or that are due within Mr. Larry De Shon

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    December
      19, 2008

    Page
      Three

    


    the
      "short term deferral period" as defined in Section 409A shall not be treated
      as
      deferred compensation unless applicable law requires
      otherwise.  Notwithstanding anything contained herein, to the extent
      required in order to avoid accelerated taxation and/or tax penalties under
      Section 409A amounts that would otherwise be payable and benefits that would
      otherwise be provided pursuant to this letter (or any other plan or agreement
      of
      the Company providing you with payments or benefits upon your separation from
      service) during the six-month period immediately following your separation
      from
      service shall instead be paid or provided on the first business day after the
      date that is six months following your separation date (or death, if
      earlier).

    


    The
      by-laws of the Company provide that officers will be indemnified for their
      authorized actions on behalf of our Company to the fullest extent permitted
      under applicable law.

    


    This
      severance pay as set forth in this letter is in lieu of and supersedes any
      other
      severance benefits otherwise payable to you under any other agreement or
      severance plan of ABCR or its affiliates.

    


    Regards,

    


    /s/
      Mark J. Servodidio  

     

    Mark
      J.
      Servodidio

    Executive
      Vice President – Human Resources

    


    


    Understood
      and accepted:

    


    


    /s/
      Larry De Shon     

    Larry
      De
      Shon

    


    
 

    Date:  December
      30, 2008