1
EXHIBIT 10.21
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of the 17th day of January, 2000, by
and between Pegasus Systems, Inc., a Delaware corporation (the "Company") and
Mark C. Wells (the "Executive").
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that it is essential and in the best interest of the Company and its
stockholders to enter into this Agreement to retain the services of the
Executive and to ensure his continued dedication and efforts; and
WHEREAS, in order to induce the Executive to enter into and continue
employment by the Company, the Company desires to provide the Executive with
certain benefits during the term of his employment and, in the event his
employment is terminated, to provide the Executive with the benefits and
payments described herein.
NOW, THEREFORE, in consideration of the respective agreements of the
parties contained herein, it is agreed as follows:
1. EMPLOYMENT TERM.
The "Employment Term" shall commence on January 17, 2000 (the
"Effective Date") and shall expire on the fourth (4th) anniversary of the
Effective Date.
2. EMPLOYMENT.
(a) Subject to the provisions of Section 8 hereof, the Company agrees
to continue to employ the Executive and the Executive agrees to remain in the
employ of the Company during the Employment Term. During the Employment Term,
the Executive shall be employed as an Executive Vice President of the Company.
The Executive shall perform the duties, undertake the responsibilities and
exercise the authority customarily performed, undertaken and exercised by
persons situated in a similar executive capacity. He shall also promote, by
entertainment or otherwise, the business of the Company.
(b) During the Employment Term, excluding periods of vacation and sick
leave to which the Executive is entitled, the Executive agrees to devote
reasonable attention and time during usual business hours to the business and
affairs of the Company to the extent necessary to discharge the responsibilities
assigned to the Executive hereunder. The Executive may (1) serve on corporate,
civil or charitable boards or committees, (2) manage personal investments and
(3) deliver lectures and teach at educational institutions, so long as such
activities do not significantly interfere with the performance of the
Executive's responsibilities hereunder. It is expressly understood and agreed
that to the extent that any such activities have been conducted by the Executive
prior to the Effective Date, the continued conduct of such activities (or the
conduct of activities similar in nature and scope thereto) subsequent to the
Effective Date shall not thereafter be deemed to interfere with the performance
of the Executive's responsibilities to the Company.
-1-
2
3. COMPENSATION.
(a) Base Salary. Beginning on the Effective Date, the Company agrees to
pay or cause to be paid to the Executive an annual base salary of Two Hundred
Sixty Five Thousand Dollars ($265,000.00), and as may be increased from time to
time by the Compensation Committee of the Board (hereinafter referred to as the
"Base Salary"). Such Base Salary shall be payable in accordance with the
Company's customary practices applicable to its executives.
(b) Annual Bonus. In addition to Base Salary, the Executive shall be
awarded, for each fiscal year ending during the Employment Term, an annual
discretionary bonus (the "Annual Bonus") in accordance with the terms and
conditions of the bonus plan approved by the Compensation Committee. Any actual
payment or award under such Annual Bonus plan, and the size of any payment or
award, will be in accordance with the terms of the plan. Each such Annual Bonus
shall be paid no later than the end of the third (3rd) month of the fiscal year
next following the fiscal year for which the Annual Bonus is awarded, unless the
Executive shall elect to defer the receipt of such Annual Bonus.
(c) Supplemental Employee Retirement Plan. In addition to the Base
Salary and Annual Bonus, the Executive shall be entitled to participate in the
Company's Supplemental Employee Retirement Plan, a copy of which is attached
hereto, as of January 1, 2000. Executive shall not be subject to any amendment
to the Supplemental Employee Retirement Plan without Executive's written
consent.
(d) Stock Plans. Executive shall be entitled to participate in the
Company's Stock Option Plans, Employee Stock Purchase Plans and such other
stock-related plans as may be applicable to executives of the Company and to
receive such stock option grants and any and all other rights of participation
as may be provided therein.
(e) Life Insurance. Executive shall be entitled to the continuation of
such life insurance coverage, if any, at the Company's expense, as is currently
in effect as of the date of this Agreement.
(f) Car Allowance. Executive shall be entitled to a car allowance of
Nine Hundred Fifty Dollars ($950.00) per month for each month during the term of
this Agreement.
(g) Club Dues. Executive shall be entitled to reimbursement by the
Company for monthly dues payable to a country club or similar club of
Executive's choosing.
4. EMPLOYEE BENEFITS.
During the Employment Term and beginning on the Effective Date, the
Executive shall be entitled to participate in all employee benefit plans,
practices and programs maintained by the Company and made available to employees
generally, including, without limitation, all pension, retirement, profit
sharing, savings, medical, hospitalization, disability, dental, life or travel
accident insurance benefit plans. Unless otherwise provided herein, the
compensation and benefits under, and the Executive's participation in, such
plans, practices and programs shall be on the same basis and terms as are
applicable to employees of the Company generally, but in no event on a basis
less favorable in terms of benefit levels and coverage than offered to other
similarly situated executives of the Company. The Company may reduce benefit
levels if such changes are part of broad-based changes in the Company's benefit
programs offered generally to all employees. Notwithstanding the foregoing,
except as
-2-
3
otherwise set forth herein, nothing herein shall obligate the Company to adopt
such plans, practices or programs.
5. EXECUTIVE BENEFITS.
During the Employment Term, the Executive shall be entitled to
participate in all executive benefit or incentive compensation plans maintained
or established by the Company for the purpose of providing compensation and/or
benefits to executives of the Company including, but not limited to, any
supplemental retirement, salary continuation, stock option, deferred
compensation, supplemental medical or life insurance or other bonus or incentive
compensation plans; provided, however, the grant of a stock option in any year
is not guaranteed and will be dependent on the Board's evaluation of the
Executive's performance. No additional compensation provided under any of such
plans shall be deemed to modify or otherwise affect the terms of this Agreement
or any of the Executive's entitlements hereunder. Notwithstanding the foregoing,
except as otherwise set forth herein, nothing herein shall obligate the Company
to adopt such plans, practices or programs.
6. OTHER BENEFITS.
(a) Fringe Benefits and Perquisites. During the Employment Term, the
Executive shall be entitled to all fringe benefits and perquisites generally
made available by the Company to its executives. Unless otherwise provided
herein, the fringe benefits and perquisites provided to Executive shall be on
substantially the same basis and terms as other similarly situated executives of
the Company.
(b) Expenses. The Executive shall be entitled to receive reimbursement
of all expenses reasonably incurred by him in connection with the performance of
his duties hereunder or for promoting, pursuing or otherwise furthering the
business or interests of the Company in accordance with the accounting
procedures and expense reimbursement policies of the Company as it shall adopt
from time to time.
7. VACATION AND SICK LEAVE.
During the Employment Term, at such reasonable times as the Board shall
in its discretion permit, the Executive shall be entitled without loss of pay,
to absent himself voluntarily from the performance of his employment under this
Agreement, provided that:
(a) The Executive shall be entitled to annual vacation in accordance
with the policies as periodically established by the Board.
(b) The Executive shall be entitled to sick leave (without loss of pay)
in accordance with the Company's policies as in effect from time to time.
8. TERMINATION.
During the Employment Term, the Executive's employment hereunder may be
terminated under the following circumstances:
(a) Cause. The Company may terminate the Executive's employment for
"Cause". A termination of employment is for "Cause" if the Executive:
-3-
4
(1) has been convicted of or plead guilty or no contest to a felony; or
(2) intentionally engaged in conduct which is demonstrably and
materially injurious to the Company, monetarily or otherwise or
from which he derives an improper material personal benefit;
provided, however, that no termination of the Executive's
employment shall be for Cause as set forth in this clause (2)
until:
(i) there shall have been delivered to the Executive a copy of a
written notice setting forth that the Executive was guilty of
the conduct set forth in this clause (2) and specifying the
particulars thereof in reasonable detail; and
(ii) the Executive shall have been provided an opportunity to be
heard by the Board (with the assistance of the Executive's
counsel if the Executive so desires). No act, nor failure to
act, on the Executive's part shall be considered "intentional"
unless he has acted, or failed to act, with an absence of good
faith and without a reasonable belief that his action or
failure to act was in the best interest of the Company.
(3) commits gross malfeasance or intentionally fails to perform the
duties of the Executive's position; provided, however, the Company
shall first notify the Executive in writing stating with reasonable
specificity the action or inaction of the Executive which forms the
basis for such notice and the Executive fails to cure such
malfeasance or failure within ten (10) days of the date of such
notice.
(4) violates any valid non-competition or non-disclosure agreement or
the Company's insider trading policy, if any.
Notwithstanding anything contained in this Agreement to the contrary,
no failure to perform by the Executive after a Notice of Termination is given by
the Executive shall constitute Cause for purposes of this Agreement.
(b) Disability. The Company may terminate the Executive's employment
after having established the Executive's Disability. For purposes of this
Agreement, "Disability" means a physical or mental infirmity which impairs the
Executive's ability to substantially perform his material duties under this
Agreement which continues for a period of at least ninety (90) consecutive days.
The Executive shall be entitled to the compensation and benefits provided for
under this Agreement for any period during the Employment Term and prior to the
establishment of the Executive's Disability during which the Executive is unable
to work due to a physical or mental infirmity and as otherwise provided in this
Agreement in connection with Disability. Notwithstanding anything contained in
this Agreement to the contrary, until the Termination Date specified in a Notice
of Termination (as each term is hereinafter defined) relating to the Executive's
Disability, the Executive will be entitled to return to his position with the
Company as set forth in this Agreement in which event no Disability of the
Executive will be deemed to have occurred.
(c) Good Reason.
(1) The Executive may terminate his employment for "Good Reason".
For purposes of this Agreement, "Good Reason" shall mean the
occurrence of any of the events or conditions described in
Subsections (i) through (vi) hereof:
-4-
5
(i) If the Executive shall cease to be an Executive Vice
President of the Company (or any successor or parent thereof)
or upon the assignment to the Executive of any material duties
or responsibilities which are inconsistent with his position
or responsibilities; or any removal of the Executive from or
failure to reappoint or reelect him to any such offices or
positions, except during a period of disability or in
connection with the termination of his employment for
Disability, Cause, as a result of his death, or by the
Executive other than for Good Reason;
(ii) A reduction in the Executive's Base Salary or any failure
to pay the Executive any compensation or benefits to which he
is entitled within thirty (30) days of the due date;
(iii) A Change of Control as hereinafter defined;
(iv) Any material breach by the Company of any provision of
this Agreement; provided, however, the Executive shall first
notify the Company in writing stating with reasonable
specificity the breach by the Company and the Company fails to
cure such breach within ten (10) days of the date of such
notice;
(v) Any purported termination of the Executive's employment
for Cause by the Company which is found by a court of
competent jurisdiction or an arbitrator not to comply with the
terms of Section 8(a); or
(vi) The failure of the Company to obtain an agreement,
reasonably satisfactory to the Executive, from any successor
or assign of the Company to assume and agree to perform this
Agreement, as contemplated in Section 13 hereof.
(2) The Executive's right to terminate his employment pursuant to
this Section 8(c) shall not be affected by his incapacity due
to physical or mental illness.
(d) Voluntary Termination. Upon thirty (30) days prior written notice,
either the Executive or the Company may voluntarily terminate the Executive's
employment hereunder at any time; provided, however, in the event of any such
termination by the Company, the Company shall pay to the Executive the amounts
set forth in Section 9(c) hereof.
9. COMPENSATION UPON TERMINATION.
Upon termination of the Executive's employment during the Employment
Term, the Executive shall be entitled to the following benefits:
(a) If the Executive's employment with the Company shall be terminated
by the Company for Cause or by the Executive other than for Good Reason, the
Company shall pay the Executive all amounts earned and accrued through the
Termination Date but not paid as of the Termination Date, including:
(1) the Base Salary,
-5-
6
(2) reimbursement for reasonable and necessary expenses incurred by
the Executive on behalf of the Company during the period ending on
the Termination Date,
(3) vacation pay, and
(4) sick leave (collectively, "Accrued Compensation").
(b) If the Executive's employment with the Company shall be terminated
by the Company for Disability, the Company shall pay the Executive all amounts
earned or accrued through the Termination Date but not paid as of the
Termination Date, including the Accrued Compensation. In addition, the Company
shall pay to the Executive the following:
(1) the Base Salary and all other benefits customarily received for
a period of one (1) year from the date of such Disability,
(2) an amount equal to the "Pro Rata Bonus". The "Pro Rata Bonus"
is an amount equal to the maximum bonus amount the Executive would
have been entitled to in the fiscal year which includes the
Termination Date (the "Bonus") multiplied by a fraction, the
numerator of which is the number of days in such fiscal year
through the Termination Date and the denominator of which is 365,
and
(3) a monthly payment upon reaching age sixty (60) as more
specifically provided by the Supplemental Employee Retirement Plan.
(c) If the Executive's employment with the Company shall be terminated
by the Company by reason of the Executive's death , the Company shall pay the
Executive all amounts earned or accrued through the Termination Date but not
paid as of the Termination Date, including the Accrued Compensation. In
addition, the Company shall pay to the Executive's beneficiaries the following:
(1) the Base Salary and all other benefits customarily received for
a period of one (1) year from the date of such death,
(2) an amount equal to the "Pro Rata Bonus". The "Pro Rata Bonus"
is an amount equal to the maximum bonus amount the Executive would
have been entitled to in the fiscal year which includes the
Termination Date (the "Bonus") multiplied by a fraction, the
numerator of which is the number of days in such fiscal year
through the Termination Date and the denominator of which is 365,
and
(3) a single payment equal to Executive's total accrued benefit
under the Supplemental Employee Retirement Plan.
(d) If the Executive's employment with the Company shall be terminated
by the Company without Cause or by the Executive for Good Reason, the Company
shall pay to the Executive the following:
(1) the Company shall pay the Executive all Accrued Compensation
and a Pro Rata Bonus,
-6-
7
(2) the Company shall continue to pay the Executive as severance
pay and in lieu of any further compensation for periods subsequent
to the Termination Date, an amount equal to the sum of (A) the
Executive's Base Salary in effect for the month immediately
preceding the Termination Date and (B) the Bonus, for a period of
twenty-four (24) months following the Termination Date,
(3) during the twelve (12) month period immediately following the
Termination Date (the "Continuation Period"), the Company shall at
its expense continue on behalf of the Executive and his dependents
and beneficiaries the life insurance, disability, medical, dental
and hospitalization benefits provided (A) to the Executive
immediately prior to the Notice of Termination or (B) to other
similarly situated executives who continue in the employ of the
Company during the Continuation Period. The coverage and benefits
(including deductibles and costs) provided in this Section 9(c)(3)
during the Continuation Period shall be no less favorable to the
Executive and his dependents and beneficiaries, than the most
favorable coverages and benefits provided to the Executive during
any of the periods referred to in clauses (A) and (B) above. The
Company's obligation hereunder with respect to the foregoing
benefits shall terminate in the event the Executive obtains any
such benefits (regardless of level and scope of coverage) pursuant
to a subsequent employer's benefit plans. This Section 9(c)(3)
shall not be interpreted as to limit any benefits to which the
Executive, his dependents or beneficiaries may be entitled under
any of the Company's employee benefit plans, programs or practices
following the Executive's termination of employment, including
without limitation retiree medical and life insurance benefits,
(4) the restrictions on any outstanding stock options (including
restricted stock and granted performance shares or units) granted
to the Executive under any stock option plans or under any other
incentive plan or arrangement shall lapse and such incentive award
shall become 100% vested, all stock options and stock appreciation
rights granted to the Executive shall become immediately
exercisable and shall become 100% vested, and all performance units
granted to the Executive shall become 100% vested,
(5) for a period of two (2) years after the date of termination,
the Company shall continue to contribute to the Supplemental
Employee Retirement Plan for the benefit of the Executive and the
Executive shall be entitled to the benefits of the Supplemental
Employee Retirement Plan in the same manner as if the Executive had
continued as an employee for the additional two (2) years provided
further that Executive shall be entitled to a lump sum payment at
the expiration of the additional two (2) years equal to the early
retirement payment amount as set forth in the Supplemental Employee
Retirement Plan.
(6) the Company shall reimburse to the Executive the costs of any
outplacement services incurred by Executive, up to a maximum amount
of Fifteen Thousand Dollars ($15,000.00).
(e) The amounts provided for in Sections 9(a), 9(b)(2) and 9(c)(1)
shall be paid within thirty (30) days after the Executive's Termination Date.
Expenses incurred by Executive
-7-
8
under Section 9(c)(5) shall be paid within thirty (30) days of the receipt by
the Company of a claim for reimbursement submitted by the Executive.
(f) The Executive hereby acknowledges that full payment and/or
performance by the Company of its obligations as set forth in Sections 9(b) or
9(c) hereof shall be in lieu of any other remedy or cause of action the
Executive may have, either at law or in equity, as a result of the termination
of the Executive's employment pursuant to such Sections.
10. DEFINITIONS.
(a) Notice of Termination. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which indicates the specific termination
provision in this Agreement, if any, relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated. Any
purported termination by the Company or by the Executive shall be communicated
by written Notice of Termination to the other. For purposes of this Agreement,
no such purported termination of employment shall be effective without such
Notice of Termination.
(b) Termination Date, Etc. For purposes of this Agreement, "Termination
Date" shall mean in the case of the Executive's death, his date of death, or in
all other cases, the date specified in the Notice of Termination subject to the
following:
(1) If the Executive's employment is terminated by the Company for
Cause, the date of the Notice of Termination,
(2) If the Executive's employment is terminated by the Company due to
Disability, the date specified in the Notice of Termination shall be at
least thirty (30) days from the date the Notice of Termination is given
to the Executive, provided that the Executive shall not have returned
to the full-time performance of his duties during such period of at
least thirty (30) days, and
(3) If the Executive's employment is terminated for Good Reason, the
date specified in the Notice of Termination shall be not more than
thirty (30) days from the date the Notice of Termination is given to
the Company.
(d) Change In Control. For purposes of this Agreement, a "Change in
Control" shall mean any of the following events:
(1) An acquisition of any voting securities of the Company (the "Voting
Securities") by any "Person" (as the term person is used for purposes
of Section 12(d) or 13(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) other than any parent, subsidiary or
affiliate of the Company immediately after which such Person has
"Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of more than fifty percent (50%) of the
combined voting power of the Company's then outstanding Voting
Securities; provided, however, in determining whether a Change in
Control has occurred, Voting Securities which are acquired in a
"Non-Control Acquisition" (as hereinafter defined) shall not constitute
an acquisition which would cause a Change in Control. A "Non-Control
Acquisition" shall mean an acquisition by (i) an employee benefit plan
(or a trust forming a part thereof) maintained by (A) the Company or
(B) any corporation or other Person of which a majority of its voting
power or its voting equity securities or equity interest is owned,
directly or
-8-
9
indirectly, by the Company (for purposes of this definition, a
"Subsidiary") or (ii) the Company or its Subsidiaries,
(2) The individuals who, as of the date of this Agreement is approved
by the Board, are members of the Board (the "Incumbent Board") cease
for any reason to constitute at least one half (1/2) of the members of
the Board; provided, however, that if the election, or nomination for
election of any new director was approved by a vote of the members of
the Board as provided by Section 3.2.3 of the Company's Bylaws, such
new director shall, for purposes of this Agreement, be considered as a
member of the Incumbent Board; provided, however, that no individual
shall be considered a member of the Incumbent Board if such individual
initially assumed office as a result of either an actual or threatened
"Election Contest" (as described in Rule 14a-11 promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board (a "Proxy
Contest") including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest, or
(3) Approval by the stockholders of the Company of:
(i) A complete liquidation or dissolution of the Company, or
(ii) An agreement for the sale or other disposition of all or
substantially all of the assets of the Company to any Person
(other than a transfer to a Subsidiary or a parent in a
Non-Control Acquisition).
11. EXCISE TAX PAYMENTS.
In the event of a determination that a portion of any payment or
benefit to the Executive or for his benefit payable or distributable pursuant to
the terms of this Agreement is or will be deemed to be an "excess parachute
payment" within the meaning of Section 280G(b)(1) of the Internal Revenue Code
of 1986, as amended (the "Code") (a "Payment" or "Payments"), the Company shall
be responsible for the payment of any excise or similar tax assessed in
connection therewith.
12. NONCOMPETITION.
(a) Except with the prior written consent of the Company authorized by
a resolution adopted by the Board, for the period beginning upon the date hereof
and ending on (i) in the event of the termination of the Executive's employment
by the Executive for Good Reason pursuant to Section 8(c) or by the Company
pursuant to Section 8(d) hereof and the Executive is receiving payments from the
Company pursuant to Section 9(c)(2) hereof, the date on which the last such
payment is received; or (ii) in the event of the voluntary termination of the
Executive's employment by the Executive pursuant to Section 8(d) hereof, the
date which is nine (9) months from the Termination Date; or (iii) in the event
of the termination of the Executive's employment for any other reason, the
Termination Date, Executive shall not directly or indirectly as owner, partner,
joint venturer, stockholder, employee, broker, agent, principal, trustee,
corporate officer, director, licensor, or in any capacity whatsoever engage in,
become substantially financially interested in, employed by or have any
connection with, any business engaged principally in the processing of
electronic hotel reservations and travel agent commissions in any country where
the Company or any of its subsidiaries is then engaged in such business;
provided, however, that Executive may own any securities of any corporation
which is engaged in such business and is publicly traded stock or securities of
such corporation.
-9-
10
(b) Executive agrees that for a period of one (1) year following
termination of employment with the Company, he will not solicit or in any manner
encourage employees of the Company, its subsidiaries or parent to leave its
employ. Executive further agrees that during such period he will not offer or
cause to be offered employment to any person who is employed by the Company, its
subsidiaries or parent at any time during the six (6) months prior to the
termination of his employment with the Company.
(c) In case one or more of the terms contained in Subsections (a) or
(b) of this Section 12 shall for any reason become invalid, illegal, or
unenforceable, such invalidity, illegality or unenforceability shall not affect
any other terms herein, but such terms shall be deemed deleted and such deletion
shall not affect the validity of the other terms of this Section. In addition,
if any one or more of the terms contained in Subsections (a) or (b) of this
Section shall for any reason be held to be excessively broad with regard to
time, duration, geographic scope or activity that term shall be construed in a
manner to enable it to be enforced to the extent compatible with applicable law.
13. SUCCESSORS AND ASSIGNS.
(a) This Agreement shall be binding upon and shall inure to the benefit
of the Company, its successors and assigns and the Company shall require any
successor or assign 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 if no such succession or assignment had taken place. The term "Company"
as used herein shall include such successors and assigns. The term "successors
and assigns" as used herein shall mean a corporation or other entity acquiring
all or substantially all the assets and business of the Company (including this
Agreement) whether by operation of law or otherwise.
(b) Neither this Agreement nor any right or interest hereunder shall be
assignable or transferable by the Executive, his beneficiaries or legal
representatives, except by will or by the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal personal representative.
14. FEES AND EXPENSES.
The Company shall pay all legal fees and related expenses (including
the costs of experts, evidence and counsel) incurred by the Executive as a
result of the breach or default by the Company of the terms hereof.
15. NOTICE.
For purposes of this Agreement, notice and all other communications
provided for in the Agreement (including the Notice of Termination) shall be in
writing and shall be deemed to have been duly given when personally delivered or
sent by certified mail, return receipt requested, postage prepaid, addressed to
the respective addresses last given by each party to the other, provided that
all notices to the Company shall be directed to the attention of the Board with
a copy to the Secretary of the Company. All notices and communications shall be
deemed to have been received on the date of delivery thereof or on the third
(3rd) business day after the mailing thereof, except that notice of change of
address shall be effective only upon receipt.
-10-
11
16. NON-EXCLUSIVITY OF RIGHTS.
Nothing in this Agreement shall prevent or limit the Executive's
continuing or future participation in any benefit, bonus, incentive or other
plan or program provided by the Company or any of its subsidiaries and for which
the Executive may qualify, nor shall anything herein limit or reduce such rights
as the Executive may have under any other agreements with the Company or any of
its subsidiaries. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan or program of the Company or any of
its subsidiaries shall be payable in accordance with such plan or program,
except as explicitly modified by this Agreement.
17. SETTLEMENT OF CLAIMS.
The Company's obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any circumstances, including, without limitation, any set-off
(except against amounts actually owed by the Executive to the Company as
evidenced by promissory notes, loan agreements and similar documents executed by
the Executive), counterclaim, defense, recoupment or other right which the
Company may have against the Executive or others.
18. MISCELLANEOUS.
No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing and signed
by the Executive and the Company. No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement.
19. GOVERNING LAW.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Texas without giving effect to the
conflict of law principles thereof. Subject to Section 22 of this Agreement, any
action brought by any party to this Agreement shall be brought and maintained in
a court of competent jurisdiction in Dallas County, Texas.
20. SEVERABILITY.
The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provisions hereof shall not affect the
validity or enforceability of the other provisions hereof.
21. ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement between the parties
hereto and supersedes all prior agreements, if any, understandings and
arrangements, oral or written, between the parties hereto with respect to the
subject matter hereof.
-11-
12
22. ARBITRATION.
Any dispute or controversy arising out of or relating to this Agreement
shall be determined and settled by arbitration in the City of Dallas, Texas, in
accordance with the Employment Dispute Resolution Rules of the American
Arbitration Association then in effect, and judgement upon the award rendered by
the arbitrator may be entered in any court of competent jurisdiction. Such
arbitrator shall have no power to modify any of the provisions of this
Agreement, and his or her jurisdiction is limited accordingly. A party
requesting arbitration hereunder shall give ten (10) days' written notice to the
other party to request such arbitration. Unless the arbitrator decides
otherwise, the successful party in any such arbitration shall be entitled to
reasonable attorneys' fees and costs associated with such arbitration. If the
parties hereto cannot agree upon an arbitrator, then one shall be appointed by
the governing office of the American Arbitration Association. Any arbitrator so
appointed shall have extensive experience in a profession connected with the
subject matter of the dispute. Whenever any action is required to be taken under
this Agreement within a specified period of time and the taking of such action
is materially affected by a matter submitted to arbitration, such period shall
automatically be extended by the number of days plus ten (10) that are taken for
the determination of that matter by the arbitrator.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its Chairman of the Board or Chairman of the Compensation Committee
and the Executive has executed this Agreement as of the date and year first
above written.
PEGASUS SYSTEMS, INC. EXECUTIVE:
By: /s/ W.C. HAMMETT, JR. By: /s/ MARK C. WELLS
----------------------------------------- ----------------------------
Mark C. Wells
Print: W.C. HAMMETT, JR.
--------------------------------------
Title: CHAIRMAN OF THE BOARD
--------------------------------------
-12-