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EXHIBIT 10.22
PEGASUS SYSTEMS, INC.
SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN
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TABLE OF CONTENTS
ARTICLE I ESTABLISHMENT AND PURPOSE PAGE
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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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