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EXHIBIT 10.13
PEGASUS SYSTEMS, INC.
SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN
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TABLE OF CONTENTS
ARTICLE I ESTABLISHMENT AND PURPOSE PAGE
1.1 Establishment 1
1.2 Purpose 1
ARTICLE II DEFINITIONS AND CONSTRUCTION
2.1 Definitions 2
2.2 Construction 5
ARTICLE III PARTICIPATION
3.1 Selection of Participants 6
ARTICLE IV BENEFITS
4.1 Eligibility for Benefits 7
4.2 Amount of Benefits 7
4.3 Form of Payment 8
4.4 Optional From of Payment 8
ARTICLE V FUNDING AND OTHER MATTERS
5.1 Funding 9
5.2 Continued Employment 9
5.3 Restriction on Assignment 9
5.4 Binding on Company, Participants and
Their Successors 9
5.5 Governing Law 9
5.6 Severability 9
ARTICLE VI ADMINISTRATION
6.1 Administration 10
6.2 Finality of Determination 10
6.3 Expenses 10
6.4 Indemnification and Exculpation 10
ARTICLE VII AMENDMENT AND TERMINATION
7.1 Amendment and Termination 11
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PEGASUS SYSTEMS, INC.
SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN
ARTICLE I
ESTABLISHMENT AND PURPOSE
1.1 Establishment. Pegasus Systems, Inc. hereby establishes the PEGASUS
SYSTEMS, INC. SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN, effective as of January 1,
2000.
1.2 Purpose. The purpose of this Plan is to provide supplemental
retirement benefits to certain selected management employees of the Company on
the terms and conditions set forth herein.
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ARTICLE II
DEFINITIONS AND CONSTRUCTION
2.1 Definitions. The following words and phrases shall have the
meaning set forth below unless a different meaning is plainly required by the
context:
(a) The term "ACCRUED BENEFIT" shall mean a Participant's
monthly retirement benefit equal to 3% of the Participant's
Final Average Compensation multiplied by the Participant's
Years of Service, not to exceed 60% of the Participant's
Final Average Compensation. However, the maximum benefit for
the Chief Executive Officer of the Company is 70% of Final
Average Compensation.
(b) The term "ACTUARIALLY EQUIVALENT" shall mean a benefit
differing in time, period, and/or manner of payment from a
specified benefit provided under this Plan, but having the
same value at the date of commencement of benefits when
computed using the 1994 GAM Static Male Table and an
interest rate of 8% compounded annually.
(c) The term "BENEFICIARY" shall mean the person or persons
designated by a Participant to receive payment of all or a
designated portion of the Participant's benefit payable
under this Plan in the event of the Participant's death. In
the event of the Participant's death, the Company shall make
benefit payments payable under this Plan to the
Participant's Beneficiary. Any payment made by the Company
to the Participant's Beneficiary in good faith shall fully
discharge the Company from its obligations with respect to
such payment, and the Company shall have no further
obligation to see to the application of any money so paid.
(d) The term "BENEFIT COMMENCEMENT DATE" shall mean the first
day a benefit is paid to a Participant under this Plan.
(e) The term "CAUSE " shall mean:
(i) "cause" (or any corresponding term) as defined in the
employment agreement then in effect between the Company
and the Participant; or
(ii) If there is no employment agreement then in effect
between the Company and the Participant, a reason which
is based on the Participant's dishonest conduct, which
is materially injurious to the Company. For this
purpose, a determination of whether dishonest conduct
materially injurious to the Company has been committed
by the Participant shall be made by the Compensation
Committee in good faith only after a full investigation
of such alleged dishonest conduct and after an
opportunity has been given the Participant to present
the Participant's case to the
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Compensation Committee. The decision made by the
Compensation Committee shall be final and binding on
the Participant and other persons affected by such
decision.
(f) The term "COMPENSATION COMMITTEE" shall mean the
Compensation Committee of the board of directors of the
Company; provided, however, that during any period the
Compensation Committee is not constituted, the term shall
mean the board of directors of the Company.
(g) The term "CODE" shall mean the Internal Revenue Code of
1986, as amended.
(h) The term "COMPANY" shall mean Pegasus Systems, Inc., a
Delaware Corporation, its corporate successors, and the
surviving corporation resulting from any merger of Pegasus
Systems, Inc. with any other corporation or corporations.
(i) The term "COMPENSATION" shall mean the sum of a
Participant's base salary and bonus actually paid during a
calendar month.
(j) The term "DATE OF PARTICIPATION" shall mean the date the
Compensation Committee specifies as the first day an
Employee commences participation in the Plan.
(k) The term "DETERMINATION DATE" shall mean the date on which a
Participant ceases to be an Employee for any reason.
(l) The term "EARLY RETIREMENT " shall mean the termination of
the Participant's status as an Employee after the
Participant attains age fifty (50), provided such
termination is approved by the Compensation Committee as a
"retirement" for purposes of this Plan.
(m) The term "EFFECTIVE DATE" shall mean January 1, 2000.
(n) The term "EMPLOYEE" shall mean a common law employee of the
Company.
(o) The term "FINAL AVERAGE COMPENSATION" shall mean the highest
average monthly Compensation received by the Participant
from the Company during any period of thirty-six (36)
consecutive calendar months within the period of one hundred
and twenty (120) consecutive calendar months ending on the
Participant's Determination Date. If the Participant is an
Employee of the Company for less than thirty-six (36)
consecutive calendar months, the Participant's Final Average
Compensation shall be the average monthly Compensation
received by the Participant from the Company during the
Participant's period as an Employee ending on the
Participant's Determination Date.
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(p) The terms "NORMAL RETIREMENT" and "LATE RETIREMENT" shall
each mean the termination of the Participant's status as an
Employee after the Participant attains age sixty (60).
(q) The term "PARTICIPANT" shall mean an Employee who is
selected to participate in the Plan pursuant to Article III.
(r) The term "PLAN" shall mean the Pegasus Systems, Inc.
Supplemental Employee Retirement Plan as set forth herein,
as amended from time to time.
(s) The term "PLAN YEAR" shall mean the 12-month period
beginning on each January 1st and ending on the subsequent
December 31st.
(t) The term "TOTAL AND PERMANENT DISABILITY" shall mean:
(i) The mental or physical disability, either occupational
or non-occupational in cause, which satisfies the
definition of "total and permanent disability" (or any
corresponding term) as set forth in the employment
agreement then in effect between the Company and the
Participant; or
(ii) If there is no employment agreement then in effect
between the Company and the Participant or if the
employment agreement then in effect has no such
defined term or concept, the mental or physical
disability, either occupational or non-occupational in
cause, which satisfies the definition of "total and
permanent disability" (or any corresponding term) as
set forth in the principal long-term disability policy
or plan provided by the Company then covering the
Participant; or
(iii) If there is no such policy then covering the
Participant, the mental or physical disability which,
as determined by the Compensation Committee in good
faith upon receipt of and in reliance on sufficient
competent medical advice from one or more individuals
selected by the Compensation Committee who are
qualified to give professional medical advice, impairs
or is expected to impair the Participant's ability to
substantially perform the Participant's duties as an
Employee of the Company for a period of at least one
hundred eighty (180) consecutive days.
(u) The term "YEAR OF PARTICIPATION" shall mean the period of
time, computed to the nearest completed month, commencing on
the Participant's Date of Participation in the Plan and
ending on the Participant's Determination Date.
(v) The term "YEAR OF SERVICE" shall mean the period of time,
computed
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to the nearest completed month, commencing on the
Participant's date of hire as an Employee of the Company and
ending on the Participant's Determination Date.
Notwithstanding the preceding sentence, the Compensation
Committee may credit a Participant with additional full or
partial Years of Service for all or any period during which
the Participant rendered services for the Company in a
status other than as an Employee.
2.2 Construction. Except when otherwise indicated by the context, the
masculine shall also include the feminine gender and the singular shall also
mean the plural.
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ARTICLE III
PARTICIPATION
3.1 Selection of Participants. Participation in the Plan shall be
limited to those select management Employees of the Company who are designated
as Participants by the Compensation Committee. No person shall have an automatic
right to be selected as a Participant.
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ARTICLE IV
BENEFITS
4.1 Eligibility for Benefits. A Participant shall be eligible for a
benefit determined in accordance with the provisions of Section 4.2 if the
Participant's Determination Date occurs due to one of the following reasons:
(a) Normal Retirement or Late Retirement;
(b) Early Retirement;
(c) Death;
(d) Total and Permanent Disability; or
(e) If Paragraphs (a) through (d) do not apply, termination as
an Employee after the completion of (4) four Years of
Participation for any reason other than Cause.
4.2 Amount of Benefits. The benefit payable to the Participant or the
Participant's Beneficiary under the Plan shall be determined as follows:
(a) Normal Retirement or Late Retirement. A monthly benefit
equal to the Participant's Accrued Benefit commencing on the
first day of the month following the Participant's
Determination Date.
(b) Early Retirement. A monthly benefit equal to the
Participant's Accrued Benefit commencing on the first day of
the month coinciding with or next following the
Participant's sixtieth (60th) birthday. Alternatively, the
Participant may, no later than six (6) months prior to the
Participant's Determination Date, elect to receive reduced
monthly payments commencing on the first (1st) day of any
month after the Participant's Determination Date. The
reduced benefit is equal to the Participant's Accrued
Benefit reduced by 4% for each year (pro-rated for partial
years) between the date of the Participant's first benefit
payment and the first month coinciding with or next
following the Participant's sixtieth (60th) birthday.
(c) Death. A single lump sum payment that is Actuarially
Equivalent to the Participant's Accrued Benefit.
(d) Total and Permanent Disability. A monthly benefit commencing
on the first (1st) day of the month coinciding with or next
following the
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Participant's sixtieth (60th) birthday. The amount of the
benefit is the Participant's Accrued Benefit determined
using the Years of Service the Participant would have at age
sixty (60) and the Participant's Final Average Compensation
at the time of the Participant's termination as an Employee
for Total and Permanent Disability. Such benefit shall be
reduced by any benefit the Participant receives from the
long term disability plan provided by the Company.
(e) Termination. A monthly benefit equal to the Participant's
Accrued Benefit commencing on the first (1st) day of the
month coinciding with or next following the Participant's
sixtieth (60th) birthday.
4.3. Form of Payment. Except as otherwise specifically provided,
payment of benefits from this Plan, if any, shall be payable as a single life
annuity during the Participant's lifetime with the last payment to be made for
the month in which the Participant's death occurs.
4.4 Optional Forms of Payment. In lieu of the form and amount of
benefit payable under Section 4.3, a Participant may, no later than six (6)
months prior to the date benefits commence, elect a benefit of Actuarially
Equivalent value to the payment specified in Section 4.3 in one of the following
forms:
(a) Monthly payments to the Participant during the Participant's
life and, if the Participant is survived by a Beneficiary,
continuing monthly payments in the amount of 50% or 100% of
the amount payable to the Participant to such Beneficiary
for the Beneficiary's lifetime.
(b) Monthly payments to the Participant during the Participant's
life and, if the Participant dies within one hundred twenty
(120) months of the date the Participant's benefits
commenced, continuing monthly payments of the same amount to
the Participant's Beneficiary for the balance of such one
hundred twenty (120) month period.
(c) Monthly payments to the Participant or the Participant's
Beneficiary for a period of one hundred twenty (120) months.
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ARTICLE V
FUNDING AND OTHER MATTERS
5.1 Funding. All amounts paid under the Plan shall be paid in cash from
the general assets of the Company or in such form from such other funding
vehicle as the Board of Directors shall provide; provided, however, that all
assets paid into any funding vehicle hereunder shall at all times prior to
payment to the Participant or Beneficiary remain subject to the general
creditors of the Company. No participants shall have any right, title, or
interest whatever in or to, or any preferred claim in or to, any investment
reserves, accounts, or funds that the Company may purchase, establish, or
accumulate to aid in providing the payments described in the Plan. Nothing
contained in the Plan and no action taken pursuant to its provisions, shall
create or be construed to create a trust or a fiduciary relationship of any kind
between the Company and the Participant or any other person. Neither the
Participant nor a Beneficiary of the Participant shall acquire any interest
greater than that of an unsecured creditor in any assets of the Company or in
any investment reserves, accounts, or funds that the Company may purchase,
establish or accumulate for the purposes of paying benefits hereunder.
5.2 Continued Employment. Nothing contained in the Plan shall be
construed as conferring upon the Participant the right to continue in the
employment of the Company in any capacity or as otherwise affecting the
employment relationship.
5.3 Restriction on Assignment. The benefits provided hereunder are
intended for the personal security of persons entitled to payment under the Plan
and are not subject in any manner to the debts or other obligations of the
persons to whom they are payable. The interest of any Participant or his
Beneficiary may not be sold, transferred, assigned, or encumbered in any manner,
either voluntarily or involuntarily, and any attempt to so anticipate, alienate,
sell, transfer, assign, pledge, encumber, or charge the same shall be null and
void; neither shall the benefits hereunder be liable for or subject to the
debts, contracts, liabilities, engagements, or torts of any person to whom such
benefits or funds are payable, nor shall they be subject to garnishment,
attachment, or other legal equitable process nor shall they be an asset in
bankruptcy.
5.4 Binding on Company, Participants and Their Successors. The Plan
shall be binding upon the parties hereto, the successors and assigns of the
Company and the heirs, executors and administrators of the Participants.
5.5 Governing Law. The Plan shall be construed in accordance with and
governed by the laws of the State of Texas.
5.6 Severability. In the event any provision of the Plan shall be held
invalid or illegal for any reason, any illegality or invalidity shall not affect
the remaining parts of the Plan, but the Plan shall be construed and enforced as
if the illegal or invalid provision had never been inserted.
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ARTICLE VI
ADMINISTRATION
6.1 Administration. The Compensation Committee shall be responsible for
the general administration of the Plan. The Compensation Committee shall have
that authority to make rules to administrator and interpret the Plan, to decide
questions arising under the Plan, and to take such other action as may be
appropriate to carry out the purposes of the Plan.
6.2 Finality of Determination. The determination of the Compensation
Committee as to any disputed questions arising under the Plan, including
questions of construction and interpretation shall be final, binding, and
conclusive upon all persons. The Compensation Committee's determinations as to
which Employees shall be Participants and the specific benefits which shall be
paid to or on behalf of each such Participant shall be final, binding, and
conclusive upon all persons.
6.3 Expenses. The expenses of administering the Plan shall be borne by
the Company.
6.4 Indemnification and Exculpation. The members of the Compensation
Committee, the board of directors, and the officers, directors, and employees of
the Company shall be indemnified and held harmless by the Company against and
from any and all loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by them in connection with or resulting from any claim,
action, suit, or proceeding to which they may be a party or in which they may be
involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by them in settlement (with the
Company's written approval) or paid by them in satisfaction of a judgment in any
such action, suit, or proceeding. The foregoing provision shall not be
applicable to any person if the loss, cost, liability, or expense is due to such
person's fraud or willful misconduct.
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ARTICLE VII
AMENDMENT AND TERMINATION
7.1 Amendment and Termination. The board of directors of the Company
may at any time amend or terminate the Plan. However, if the Plan should be
amended or terminated, the Company shall be liable for any benefits accrued
under the Plan as of the date of such action for Participants who are or have
been employed by the Company, where such accrued benefits shall be the
actuarially determined benefits as of such date of amendment or discontinuance
which each Participant or Beneficiary is receiving under the Plan or, with
respect to Participants who are in the employment of the Company on such date,
which each such Participant would have received as of such date under the Plan
if the Participant's employment had terminated as of the date of amendment or
termination, unless such benefit is otherwise provided by the Company.
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