Exhibit 10.38
February 12, 2008
Ms. Leslie Mertz
Hyatt Gaming Management Inc. (“Gaming”)
Hyatt Center
71 S. Wacker
Chicago, Illinois 60606
Re: | Employee Benefits Administration |
Dear Ms. Mertz:
Gaming has requested that Global Hyatt continue to provide certain services provided under the Transition Services Agreement. Specifically, this applies to services in Annex B of the Transition Services Agreement. Global Hyatt will provide services consistent with Annex B of the Transition Services Agreement for Gaming’s 401(k) plan, non-qualified deferred compensation plan and health & welfare plans, subject to the following additional terms and conditions:
1. | Effective January 1, 2008, Gaming will pay Global Hyatt an annual fee in the amount of $36,000, which will be payable on the January 30th of each calendar year. This fee will increase automatically by 4% each year, beginning on January 1, 2009. |
2. | Global Hyatt’s services will be limited to those services it typically provides for its own sponsored plans. Additional services may be provided by Global Hyatt at its discretion, subject to the prior written approval of Gaming regarding the scope of the services and the price. All legal expenses, actuarial fees, administration fees for third-party administrators, communication and distribution costs or other expenses not provided by Global Hyatt for its own plans will be the sole responsibility of Gaming. Global Hyatt will engage such vendors on Gaming’s behalf or utilize such vendors under similar terms and conditions for its own plans and distribute to Gaming for payment. |
3. | Gaming hereby agrees to indemnify and hold harmless Global Hyatt and its affiliates, their respective officers, directors, managers, employees, equityholders, agents and representatives (collectively, the “GH Indemnitees”) from and against any and all claims, losses, damages, liabilities, deficiencies, obligations or out-of-pocket costs or expenses, including, without limitation, reasonable attorneys’ fees and expenses and costs and expenses of investigation that result directly from third party claims, actions or proceedings (collectively, “Losses”) arising out of or resulting from (a) any breach of this letter agreement by Gaming, or (b) such GH Indemnitees provision of services hereunder, except to the extent such Losses result directly from the willful breach of this letter agreement by Global Hyatt or the gross negligence or willful misconduct of such GH Indemnitees in the performance of any obligations hereunder. Gaming further agrees to purchase fiduciary insurance coverage with annual limits of at least $5 million dollars and name the Global Hyatt Benefits Committee and any of its designees as additional insureds. |
4. | Global Hyatt agrees to indemnify and hold harmless Gaming and its affiliated companies, officers, directors, managers, employees, equityholders, agents and representatives (collectively, the “Gaming Indemnitees”) from and against any Losses, arising out of or from (a) any willful breach of this Agreement by Global Hyatt, or (b) the gross negligence or willful misconduct of any GH Indemnitee in the performance of any obligations hereunder. |
5. | Gaming may terminate this letter agreement by providing 180 days advance written notice to Global Hyatt at any time. Global Hyatt will return a pro-rata portion of the annual fee if such termination is not effective at the end of the calendar year. |
6. | Global Hyatt may terminate this letter agreement after December 31, 2008 by providing 365 days advance written notice to Gaming. Global Hyatt will return a pro-rata portion of the annual fee if such termination is not effective at the end of the calendar year. |
7. | All notices will be provided as follows: |
To Gaming: | Ms. Leslie Mertz | |
Hyatt Gaming Management Inc. | ||
Hyatt Center | ||
71 South Wacker Drive | ||
Chicago, Illinois 60606 |
To Global Hyatt: | Director of Benefits | |
Global Hyatt Global | ||
Hyatt Center | ||
71 South Wacker Drive | ||
Chicago, Illinois 60606 |
We trust this covers our discussions. Please acknowledge your agreement to the above terms and conditions.
Sincerely,
Jon Black
Global Head, Total Rewards & Systems
Hyatt Gaming Management, Inc. | ||
Acknowledged: | ||
By: | /s/ Leslie A. Mertz | |
Name: | Leslie A. Mertz | |
Title: | SVP HR and Administration | |
Date: | March 5, 2008 |
Hyatt Gaming and Grand Victoria Benefit Plan Administration | 03-03-2008 |
Project List | Time Spent Annually | Frequency | Notes | Additional Hours if Needed | ||||
Health and Welfare Administrative Requirements | ||||||||
Preparation and Filing of Form 5500-all plans-Crowe Chizek | ||||||||
Medical | ||||||||
Dental | ||||||||
Life - Basic | ||||||||
Vision | ||||||||
Long Term Disability | ||||||||
Preparation Summary Annual Reports-Crow Chizek | ||||||||
Medical | ||||||||
Dental | ||||||||
Life - Basic | ||||||||
Vision | ||||||||
Long Term Disability | ||||||||
Plans Audit (if needed) | ||||||||
Filing of all Plan Documents, SMMS with DOL | ||||||||
Delegates on Benefits Committee | ||||||||
Compliance / HIPPA Training Materials, Policies / Procedures, Employee Notifications | ||||||||
Hewitt Benefits Administration Outsourcing | ||||||||
Ongoing Administrative - All Plans | ||||||||
Employee Communications - All | ||||||||
QMSCO Administration - Hewitt | Hewitt currently handles QMSCO administration. Hyatt may bring in-house in 2008 and would handle for Hyatt Gaming. | |||||||
Full-service H Group retiree benefits administration | 30 | Ongoing | Includes premium payments, ind.insurance policies, dental reimbursement, inputed taxation | |||||
General employee communications and SPDs | ||||||||
Retirement Savings Administrative Requirements | ||||||||
ERISA - ensure compliance with regulatory changes | 40 | Ongoing | ||||||
Preparation and filing of Form 5500 (including review of financial report and corresponding schedules) | 20 | Annual |
Hyatt Gaming and Grand Victoria Benefit Plan Administration | 03-03-2008 |
Project List | Time Spent Annually | Frequency | Notes | Additional Hours if Needed | ||||
Preparation of Summary Annual Report (SAR) | 2 | Annual | ||||||
Maintenance of Plan Document / Amendments (as necessary) | 30 | Ongoing | ||||||
Maintenance of Recordkeeping and Trust Agreements / Amendments (as necessary) | 10 | Ongoing | ||||||
Maintenance of SPD | 30 | Ongoing | ||||||
DOL filings and correspondence (Determination Letter) | 14 | Annual | ||||||
Annual benefit plan audit | 40 | Annual | ||||||
Qualified Domestic Relations Orders (QDROs) | 24 | Ongoing | Assumes 2 per year | |||||
Minimum Required Distributors (701 1/2) | 10 | Annual | ||||||
Retirement forfeitures | 12 | Quarterly | ||||||
Annual Safe Harbor Notice | 8 | Annual | ||||||
Form 5330 Filing (for late deposits) | 8 | Annual | If necessary | |||||
Enrollment kits (update and print as necessary) | 12 | Ongoing | ||||||
Monthly funding and reconciliation of employee and employer RSP, MSP & DSP contributions to T. Rowe Price (HGM/Joe, Grand Victoria, Red Sail, Lake Tahoe) | 48 | Monthly | ||||||
Monitor / audit salary deferral elections; continue working with TRP on the generation and distribution of monthly All-in-One reports as applicable to each location | 24 | Monthly | ||||||
Annual Executive Match (RSP) | 8 | Annual | ||||||
Maintain copies of all plan communication | 8 | Ongoing | ||||||
Review/maintenance of fund performance reports | 8 | Quarterly | ||||||
Distribution Form upkeep (revisions/printing) | 8 | Ongoing | ||||||
Retirement Savings Administrative Requirements | ||||||||
Grand Victoria / Red Sail Enrollment Form upkeep | 5 | Ongoing |
Hyatt Gaming and Grand Victoria Benefit Plan Administration | 03-03-2008 |
Project List | Time Spent Annually | Frequency | Notes | Additional Hours if Needed | ||||
Monitor maintenance feed to T. Rowe Price | 10 | Ongoing | Add’l time if changes needed | 40 | ||||
Participant indicator audit | 16 | Semi-annual | ||||||
Monitor salary deferral interface with T. Rowe Price | 10 | Ongoing | Add’l time if changes needed | 40 | ||||
Monitor loan interface with T. Rowe Price | 10 | Ongoing | Add’l time if changes needed | 40 | ||||
Annual Minimum Coverage Testing | 30 | Annual | ||||||
Annual Definition of Compensation Testing | 16 | Annual | ||||||
Maintain T. Rowe Price workflows | 20 | Ongoing | ||||||
Quarterly participant statements | 16 | Quarterly | ||||||
T. Rowe Price SAS 70 review | 8 | Annual | ||||||
401(k) Day and miscellaneous employee communications when possible | 20 | Annual | ||||||
Participant Communications | 8 | Ongoing | ||||||
Support properties with various administrative/funding/payroll compliance issues and questions | 40 | Ongoing | ||||||
Grand Victoria match | 8 | Annual | ||||||
DSP & MSP Administrative Requirements | ||||||||
409A - ensure compliance with regulatory changes | 40 | Ongoing | ||||||
Maintenance of Plan Document / Amendments | 30 | Ongoing | ||||||
Maintenance of Recordkeeping and Trust Agreements (including individual fund agreements) | 10 | Ongoing | ||||||
Support properties with various administrative/funding/payroll compliance issues and questions | 40 | Ongoing | ||||||
HCE determination (October) and follow up (January) | 20 | Annual | ||||||
Annual enrollment (prepare communication and update MSP/DSP enrollment forms) | 16 | Annual |
Hyatt Gaming and Grand Victoria Benefit Plan Administration | 03-03-2008 |
Project List | Time Spent Annually | Frequency | Notes | Additional Hours if Needed | ||||||
Deferral audit | 10 | Annual | ||||||||
Annual Executive Match (January) | 8 | Annual | ||||||||
FICA withholding on annual executive match | 8 | Annual | ||||||||
Audit terminated participants to ensure all have been cashed out | 12 | Monthly | ||||||||
Monitor plan-to-plan transfers for participants promoted from MSP to DSP eligible position | 16 | Quarterly | ||||||||
Track payment elections for grandfathered/non-grandfathered accounts to assure compliance with 409(A) regulations | 16 | Annual | ||||||||
Maintain/communicate bonus deferral elections | 8 | Annual | ||||||||
Track DSP access deferral elections | 8 | Annual | ||||||||
Hardship withdrawals | 4 | Ongoing | Assumes 1 per year | |||||||
Quarterly participant statements | 8 | Quarterly | ||||||||
Fee review/approval | 8 | Quarterly | ||||||||
Miscellaneous | ||||||||||
QSLOP Filing | 8 | Annual | ||||||||
Life Balance | 8 | Ongoing | ||||||||
Benefit Orientation Materials/presentation | 8 | Ongoing | ||||||||
SERP/Frozen Deferred Comp Administration | 40 | Ongoing | ||||||||
Corp HR EIS maintenance for HGMI | 25 | Ongoing | ||||||||
Total Hours | 962 | 120 | ||||||||
Total cost at Analyst level salary ($25.00/hour) + Mgmt oversight (1/4 hours at $35.00/hour) | $ | 32,467.50 | $ | 36,517.50 |
ANNEX B TO THE TRANSITION SERVICES AGREEMENT
Employee Benefits
1. | On-going Administration of Benefit Plans. |
2. | Reporting and Disclosure of Benefit Plans. |
• | To include, but not limited to: |
i. | External Plan Audits |
ii. | Reporting e.g. 5500 Filings |
iii. | Updating and maintenance of Plan Documents and Amendments |