Item 1.01
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Entry into a Material Definitive Agreement.
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Second Amended and Restated Cooperation Agreement
Avis Budget Group, Inc. (the Company) entered into a Second Amended and Restated Cooperation Agreement (the Second Amended and
Restated Cooperation Agreement) with SRS Investment Management, LLC and certain of its affiliates (collectively, SRS), dated as of April 16, 2018, regarding the membership and composition of the Companys board of
directors (the Board) and related matters. The Company and SRS previously entered into an Amended and Restated Cooperation Agreement, dated May 3, 2017, as described on the Companys Form 8-K filed on May 3, 2017.
Pursuant to the Second Amended and Restated Cooperation Agreement, the Company will temporarily increase the size of the Board to 14 directors and appoint as
directors, effective April 20, 2018, Jagdeep Pahwa and Carl Sparks.
Under the terms of the Second Amended and Restated Cooperation Agreement, for so
long as their respective service on the Board continues, Brian Choi shall be appointed to the Compensation Committee of the Board and Jagdeep Pahwa shall be appointed to the Executive Committee of the Board and to the Corporate Governance Committee
of the Board.
The Second Amended and Restated Cooperation Agreement further provides that, as previously announced by the Company, three current members
of the Board will not be standing for reelection at the Companys 2018 annual meeting of stockholders (the 2018 Annual Meeting). At the conclusion of the 2018 Annual Meeting, the size of the Board will be reduced to 13 directors.
Following the conclusion of the Companys 2019 annual meeting of stockholders, the Company has agreed that the size of the Board will be reduced to 12 directors.
SRS has agreed to abide by certain standstill provisions during a standstill period commencing on the date of the Second Amended and Restated Cooperation
Agreement and ending on the earlier of (i) January 25, 2020 and (ii) the date that is 30 days prior to the last date for which notice of a stockholders intention to nominate any individual as a director of the Company at the
Companys 2020 annual meeting of stockholders must be received by the Company (the Standstill Period). During the Standstill Period, SRS has agreed not to (among other things) acquire Beneficial Ownership (as such term is defined in
the Second Amended and Restated Cooperation Agreement) of more than the greater of (x) 16,190,449 and (y) 20% of the Companys outstanding Voting Securities (as such term is defined in the Second Amended and Restated Cooperation
Agreement).
During the Standstill Period, SRS has agreed to vote its shares of the Companys common stock in favor of the Companys nominees
and other proposals at any meeting of the Companys stockholders occurring during the Standstill Period, subject to certain limited exceptions. In addition, in the event that SRS obtains (as a result of buybacks or repurchases by or on behalf
of the Company or otherwise) the right to exercise voting rights attached to Voting Securities in excess of 20% of the outstanding Voting Securities, SRS has committed to exercise such voting rights in proportion to stockholders unaffiliated with
SRS.
The foregoing summary of the Second Amended and Restated Cooperation Agreement does not purport to be complete and is qualified in its entirety by
reference to the full text of the Second Amended and Restated Cooperation Agreement, a copy of which is attached as Exhibit 10.1 hereto and is incorporated herein by reference.
Amendment No. 1 to Rights Agreement
On
April 16, 2018, the Company entered into Amendment No. 1 (the Rights Agreement Amendment) to the Rights Agreement, dated as of January 14, 2018, between the Company and Computershare Trust Company, N.A., as rights agent.
The Rights Agreement Amendment accelerates the expiration of the Companys preferred share purchase rights (the Rights) from the Close
of Business (as such term is defined in the Rights Agreement) on January 13, 2019 to the Close of Business on April 16, 2018, and the Rights Agreement will terminate at such time. At the time of the termination of the Rights Agreement, all
of the Rights distributed to holders of the Companys common stock pursuant to the Rights Agreement will expire.
The foregoing summary of the Rights
Agreement Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Rights Agreement Amendment, a copy of which is attached as Exhibit 4.1 hereto and is incorporated herein by reference.