nelson.htm


     

    Exhibit
      10.1

    AMENDED
      AND RESTATED

     

     

    EMPLOYMENT
      AGREEMENT

     

     

    Avis
      Budget Group, Inc. (the "Company") and Ronald L. Nelson (the
      "Executive") are parties to this certain Employment Agreement
      amended and restated as of December 29, 2008 (this
      "Agreement").

     

     

    WHEREAS,
      Cendant Corporation (which has been renamed Avis Budget Group, Inc.) and the
      Executive were parties to a certain Employment Agreement effective as of April
      14, 2003 (the "2003 Agreement"); and

     

     

    WHEREAS,
      Cendant Corporation (which has been renamed Avis Budget Group, Inc.) and the
      Executive amended the 2003 Agreement in June, 2006, effective August 1, 2006
      (the "2006 Agreement"); and

     

     

     WHEREAS,
      the Company and the Executive desire to amend and restate the 2006 Agreement
      in
      its entirety as set forth herein.

     

     

    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 that this Agreement is amended and restated to read as
      follows:

     

     

    SECTION
      I

     

     

    


     

     

    EFFECTIVENESS

     

     

    This
      Agreement shall be effective as of August 1, 2006 (the "Effective
      Date").

     

     

    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.  During
      the Period of Employment, the Executive shall serve as Chief Executive Officer
      of the Company and 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


     

    
      
        
        

      

      
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    the
      business of the Company as are associated with his position, 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
      Chairman, and a member, of the Board; provided, however, 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.

     

     

    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
      fourth 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 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.

     

     

    SECTION
      IV

     

     

    


     

     

    COMPENSATION
      AND BENEFITS

     

     

    For
      all
      services rendered by the Executive pursuant to this Agreement during the Period
      of Employment, 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.

     

    
      
        
        

      

      
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    (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 Period
      of Employment (each, an "Annual Bonus") equal to 150% of the
      Executive's Base Salary for such fiscal year, if the Company achieves the target
      performance goals established by the 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 1/2) 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 ("Section 409A") of
      the Internal Revenue Code of 1986, as amended (the "Code") and
      the regulations promulgated thereunder.

     

     

    (c)  Long-Term
      Incentive Awards.  The parties hereby acknowledge that (i)
      pursuant to the 2006 Agreement, the Executive was awarded a long-term incentive
      equity award with a grant date value equal to $6 million (the
      "Initial Grant") and (ii) the Initial Grant is
      subject to such terms and conditions, including relating to vesting conditions,
      as determined by the Committee (but subject to accelerated vesting in accordance
      with Section VIII below), and is evidenced in a written grant agreement and
      granted pursuant to a stock plan of the Company.  During the Period of
      Employment, 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 a basis no less favorable than as provided to any other
      executive of the Company.  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.  Without
      limiting the generality of the foregoing, the Executive will be provided
      benefits and perquisites on such terms and conditions as determined by the
      Board, which determination will be based in part upon comparisons to chief
      executive officers of public companies of comparable size and industry to the
      Company and by comparison to those benefits the Executive received pursuant
      to
      the 2003 Agreement.

     

    
      
        
        

      

      
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    (e)  Further
      Consideration.  The Company acknowledges and agrees to provide the
      Executive with 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 benefit plan sponsored
      or
      provided 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), (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 Post-Employment 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.  If the Company meets its obligations by paying
      for the Post-Employment Plans pursuant to the foregoing sentence, any
      reimbursements required to be made by the Company to the Executive shall be
      made
      on or before the last day of the calendar year following the calendar year
      in
      which the expense was incurred.  In addition, in no event shall the
      Post-Employment Benefits provided or the amount of the expenses eligible for
      reimbursement during one calendar year affect the Post-Employment Benefits
      provided or the amount of expenses eligible for reimbursement in any other
      calendar year.

     

     

    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 

     

    
      
        
        

      

      
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    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 experiences a Disability (as defined below) during the Period of
      Employment, the Period of Employment may be terminated at the option of the
      Executive upon notice 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.  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 Annual Bonus earned but unpaid as of the date
      of
      such termination (the "Accrued Obligations"), and, in such
      event (a) each of the Executive's then outstanding options to purchase shares
      of
      Company common stock that were granted prior to the Effective Date and options
      to purchase shares of Wyndham Worldwide Corporation common stock (and its
      successors) (the "Pre-Existing Options") shall become
      immediately and fully vested and exercisable (to the extent not already vested)
      and, shall remain exercisable during the extended post-termination exercise
      period set forth in the 2003 Agreement, (b) each option to purchase shares
      of
      the Company common stock or stock appreciation right granted on or after the
      Effective Date shall become immediately and fully vested and exercisable (to
      the
      extent not already vested) and, notwithstanding any term or provision relating
      to such option 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, (c) all other
      long-term equity awards (including, without limitation, the Initial Grant)
      then
      outstanding shall become immediately vested, and (d) the Company shall pay
      the
      Executive (or his surviving spouse, estate or personal representative, as
      applicable) a cash amount equal to the Executive's target Annual Bonus for
      the
      year in which the Executive is terminated multiplied a fraction the numerator
      of
      which is the total number of days during the applicable calendar year during
      which the Executive was employed by the Company and the denominator of which
      is
      365.

     

     

    SECTION
      VII

     

     

    


     

     

    EFFECT
      OF TERMINATION OF EMPLOYMENT

     

     

    (a)  Without
      Cause Termination and Constructive Discharge.  Subject to the
      provisions of Section VII(d), if the Executive's employment terminates during
      the Period of Employment and, in the event of a Corporate Transaction, prior
      to
      January 15th of
      the year following the year in which the Corporate Transaction occurs, due
      to
      either a Without Cause Termination or a Constructive Discharge (each as defined
      below): (i) the Accrued Obligations shall be paid to the Executive in accordance
      with paragraph (d) below, (ii) the Company shall pay the Executive (or his
      surviving spouse, estate or personal representative, as applicable), within
      five (5) days following the Release Date (as defined in paragraph (d)
      below) (or, in the event that the Release Date (as defined in Section VII(d)
      below is extended in accordance with the dispute provisions set forth in Section
      VII(d) below, upon 

     

    
      
        
        

      

      
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    resolution
      of the dispute), 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 Annual Bonus; (iii) each of the Executive's then outstanding Pre-Existing
      Options shall become immediately and fully vested and exercisable (to the extent
      not already vested) and in accordance with the terms and conditions applicable
      to such options set forth in the 2003 Agreement, and shall remain
      exercisable for the extended post-termination exercise period set forth in
      the
      2003 Agreement; (iv) each option to purchase shares of the Company common
      stock or stock appreciation right granted on or after the Effective
      Date shall become immediately and fully vested and exercisable (to the
      extent not already vested) 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 (v) all other
      long-term equity awards (including, without limitation, restricted stock units)
      shall become immediately vested.

     

     

    (b)  Termination
      for Cause; Resignation.  If the Executive's employment terminates
      due to a Termination for Cause or a Resignation, the Accrued Obligations 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 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 termination of the Executive by the Company as a
      result of (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 material
      reduction of the Base Salary, as the same may be increased during the Period
      of
      Employment, or any material reduction in any other material element of
      compensation) or any material diminution to the Executive's duties and
      responsibilities relating to service as an executive officer, (b) the Business
      Office is relocated to any location that increases the Executive's one-way
      commute by more than 30 miles or the Business Office is relocated to New York
      City provided, in each case, that such 

     

    
      
        
        

      

      
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    relocation
      constitutes a material negative change to the Executive's employment
      relationship, (c) during the Period of Employment, the Executive is not the
      Chief Executive Officer and the most senior executive officer of the Company;
      or
      does not report directly to the Board, (d) the Company provides notification
      under Section III of this Agreement that it is not extending the Agreement
      for
      an Additional Term, provided that the Executive is willing and able to extend
      the Agreement and to continue providing services under the Agreement,
      (e) the Additional Term expires and the Company does not offer to extend
      this Agreement, as amended through such expiration date on substantially similar
      terms to then-existing terms and conditions, for a period of not less than
      2
      years and not more than 4 years, provided that the Executive is willing and
      able to extend the Agreement and to continue providing services under the
      Agreement, (f) the occurrence of a "Corporate Transaction" as defined
      below, (g) the Executive is not nominated to be a member of the Board, or
      (h) failure of a successor to the Company to assume this Agreement in accordance
      with Section XIV below.  The Executive shall provide the Company a
      written notice of his intention to terminate employment pursuant to a
      Constructive Discharge 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.  Notwithstanding the above, the Company shall have thirty (30)
      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 and the
      Executive's notice of termination pursuant to a Constructive Discharge shall
      be
      rescinded.

     

     

    (iii)  "Without
      Cause Termination" or "Terminated Without
      Cause" means termination of the Executive's employment by the Company
      other than due to death, Disability, 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 or other than due to death or
      Disability.

     

     

    (v)  "Corporate
      Transaction" means either:

     

     

    (1)  any
      "person," as such term is used in Sections 13(d) and 14(d) of the Securities
      and
      Exchange Act, as amended (the "Exchange Act")
      (other than (A) the Company, (B) any trustee or other fiduciary holding
      securities under an employee benefit plan of the Company, and (C) any
      corporation owned, directly or indirectly, by the stockholders of the Company
      in
      substantially the same proportions as their ownership of Company common stock),
      is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
      Exchange Act), directly or indirectly, of securities of the Company representing
      50% or more of the combined voting power of the Company's then outstanding
      voting securities (excluding any person who becomes such a beneficial owner
      in
      connection with a transaction immediately following 

     

     

    
      
        
        

      

      
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    which
      the
      individuals who comprise the Board immediately prior thereto constitute at
      least
      a majority of the Board of the entity surviving such transaction or, if the
      Company or the entity surviving the transaction is then a subsidiary, the
      ultimate parent thereof); or

     

     

    (2)  the
      following individuals cease for any reason to constitute a majority of the
      number of directors then serving: individuals who, on the Effective Date,
      constitute the Board and any new director (other than a director whose initial
      assumption of office is in connection with an actual or threatened election
      contest, including but not limited to a consent solicitation, relating to the
      election of directors of the Company) whose appointment or election by the
      Board
      or nomination for election by the Company's stockholders was approved or
      recommended by a vote of at least one-half (1/2) of the directors then still
      in
      office who either were directors on the Effective Date or whose appointment,
      election or nomination for election was previously so approved or
      recommended.

     

     

    (d)  Conditions
      to Payment and Acceleration; Section 409A. 

     

     

    (i)  Notwithstanding
      anything contained herein to the contrary, to the extent required in order
      to
      avoid accelerated taxation and/or tax penalties under Section 409A, the
      Executive shall not be considered to have terminated employment with the Company
      for purposes of this Agreement and no payments shall be due to the Executive
      under Section VII of this Agreement until the Executive would be considered
      to
      have incurred a “separation from service” from the Company within the meaning of
      Section 409A.

     

     

    (ii)  All
      payments due to the Executive under this Section VII shall be subject to, and
      contingent upon, the Executive (or his beneficiary or estate) (x) executing
      a
      release of claims against the Company and its affiliates (in such reasonable
      form determined by the Company in its sole discretion) within forty-five days
      following the Executive's separation from service (or, in the event of a
      dispute, upon resolution of the dispute, provided that such extension does
      not
      result in, as applicable, the disputed payments constituting deferred
      compensation within the meaning of Section 409A or the imposition of additional
      taxes under Section 409A) and (y) failing to revoke such release (the date
      on
      which the release becomes irrevocable, the "Release
      Date").

     

     

    (iii)  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 Agreement during the six-month
      period immediately following the Executive’s termination of employment
      shall instead be paid on the first business day after the date that is six
      months following the Executive’s termination of employment (or upon the
      Executive’s death, if earlier).

     

    
      
        
        

      

      
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    (iv)  The
      intent of the Parties is that payments and benefits under this Agreement comply
      with Section 409A and, accordingly, to the maximum extent permitted, this
      Agreement shall be interpreted and administered to be in compliance therewith.
      Each amount to be paid or benefit to be provided under this Agreement shall
      be
      construed as a separate identified payment for purposes of Section 409A and
      any
      payments described in this Agreement that are due within the "short term
      deferral period" as defined in Section 409A shall not be treated as deferred
      compensation unless applicable law requires otherwise.

     

     

    (v)  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.

     

    
      
        
        

      

      
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    (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 (other than being less than a 5% shareholder in a publicly
      traded company), 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 those countries in the world where
      the
      Company then conducts business or has a plan to conduct business.

     

     

    (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 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 agreement, 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.

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (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 business, 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 material 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).

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    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 Code, 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.  In no event will the Gross-Up Payment be made later
      than forty-five (45) days following the date on which the Executive remits
      the
      Excise Tax to the Internal Revenue Service.

     

     

    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
      employment hereunder terminates.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    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

     

     

    Except
      as
      otherwise specifically set forth herein, this Agreement shall supersede any
      prior agreements between the Company, and the Executive (including but not
      limited to the 2003 Agreement and 2006 Agreement) hereof, and any such prior
      agreement shall be deemed terminated without any remaining 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 or other entity which assumes this Agreement and all obligations
      and
      undertakings of the Company hereunder.  If (i) there is a merger,
      consolidation, sale of all or substantially all of the Company's assets, or
      other business combination involving the Company, or (ii) all or substantially
      all of the stock of the Company is acquired by another company, the term "the
      Company" shall mean the successor to the Company's business or assets referred
      to in (i) above or such 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 (whether direct
      or
      indirect, by purchase, merger, consolidation, or otherwise), 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.

     

     

    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 

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    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 expenses
      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.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (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.

     

     

    


     

     

    *****

     

    


    
      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

    

    


     

    IN
      WITNESS WHEREOF, the undersigned have executed this Agreement as of the
      Effective Date.

     

    
       

       

      AVIS
        BUDGET GROUP, INC.


       

      /s/
        Mark Servodidio        

       

      By:      
Mark
        Servodidio

      Title:    Executive
        Vice
        President, Human Resources

       

       

       

          /s/ Ronald
        L. Nelson        

          

          Ronald
        L.
        Nelson

    

     

     

    


    Each
      of
      the undersigned subsidiaries of the Company hereby guarantees to the Executive
      the prompt and complete payment and performance by the Company when due of
      the
      Company’s obligations to make payments due to the Executive that are delayed in
      accordance with Section VII(d)(iii) in consideration for the services the
      Executive renders to such subsidiary in his role as Chief Executive Officer
      of
      Avis Budget Group, Inc.; provided that, as to any subsidiary, this guarantee
      shall be null and void and have no effect whatsoever with respect to such
      subsidiary for any period (including as of the Effective Date) during which
      this
      guarantee conflicts with or constitutes a breach of any obligation of such
      subsidiary under any currently applicable agreement or other obligation
      applicable to such subsidiary or any applicable law, rule or regulation (whether
      currently applicable or applicable at any time in the future).

    


    IN
      WITNESS WHEREOF, the undersigned have executed this Guarantee as of the
      Effective Date.

    


    AVIS
      BUDGET CAR RENTAL,
      LLC

    AVIS
      BUDGET HOLDINGS, LLC

    AVIS
      BUDGET FINANCE, INC.

    AVIS
      CAR RENTAL GROUP,
      LLC

    ARACS
      LLC

    AVIS
      RENT A CAR SYSTEM,
      LLC

    AVIS
      ASIA AND PACIFIC,
      LIMITED

    AVIS
      CARIBBEAN, LIMITED

    AVIS
      ENTERPRISES, INC.

    AVIS
      GROUP HOLDINGS, LLC

    AVIS
      INTERNATIONAL, LTD.

    PF
      CLAIMS MANAGEMENT, LTD

    AB
      CAR RENTAL SERVICES,
      INC.

    AVIS
      OPERATIONS, LLC

    BGI
      LEASING, INC.

    RUNABOUT,
      LLC

    WIZARD
      SERVICES, INC.

     

    
      /s/
        Mark Servodidio        

       

      By:      
Mark
        Servodidio

      Title:    Executive
        Vice
        President, Human Resources

    

     

    


    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    BUDGET
      RENT A CAR SYSTEM,
      INC.

    BUDGET
      TRUCK RENTAL, LLC

    PR
      HOLDCO, INC.

     

    
      /s/ Edward
        Pictroski        

       

      By:      
Edward
        Pictroski

      Title:    Senior
        Vice
        President, Human Resources

    

     

    


    
      
        
          
          

        

        
          17