EXHIBIT 10.14
PEGASUS SOLUTIONS, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
AMENDED AND RESTATED EFFECTIVE JULY 1, 2002
TABLE OF CONTENTS
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PAGE
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ARTICLE I ESTABLISHMENT AND PURPOSE ...................................................... 1
1.1 Establishment .................................................................. 1
1.2 Purpose ........................................................................ 1
ARTICLE II DEFINITIONS AND CONSTRUCTION ................................................... 1
2.1 Definitions .................................................................... 1
2.2 Construction ................................................................... 8
ARTICLE III PARTICIPATION .................................................................. 8
3.1 Selection of Participants ...................................................... 8
ARTICLE IV BENEFITS ....................................................................... 8
4.1 Eligibility for Benefits ....................................................... 8
4.2 Amount of Benefits ............................................................. 9
4.3 Form of Payment ................................................................ 9
4.4 Optional Forms of Payment ...................................................... 9
4.5 Termination of Employment for Good Reason following a Change of Control ........ 10
ARTICLE V FUNDING AND OTHER MATTERS ...................................................... 10
5.1 No Trust Required .............................................................. 10
5.2 Funding of Obligation .......................................................... 11
5.3 Continued Employment ........................................................... 11
5.4 Restriction on Assignment ...................................................... 11
5.5 Binding on Company, Participants and Their Successors .......................... 11
5.6 Governing Law .................................................................. 11
5.7 Severability ................................................................... 11
ARTICLE VI ADMINISTRATION ................................................................. 11
6.1 Administration ................................................................. 11
6.2 Finality of Determination ...................................................... 12
6.3 Expenses ....................................................................... 12
6.4 Indemnification and Exculpation ................................................ 12
6.5 Claims Procedure ............................................................... 12
ARTICLE VII AMENDMENT AND TERMINATION ...................................................... 13
7.1 Amendment and Termination ...................................................... 13
</Table>
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PEGASUS SOLUTIONS, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
ARTICLE I
ESTABLISHMENT AND PURPOSE
1.1 Establishment. Pegasus Systems, Inc. established the PEGASUS
SYSTEMS, INC. SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN (the "Plan"), effective as
of January 1, 2000. Thereafter, Pegasus Systems, Inc. changed its name to
Pegasus Solutions, Inc. (the "Company"). The name of the Plan is hereby changed
to the PEGASUS SOLUTIONS, INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN, and the
Plan is amended and restated effective as of July 1, 2002 (the "Effective
Date").
1.2 Purpose. The purpose of the Plan is to promote in a select group of
its management or highly compensated employees and those of its affiliates the
strongest interest in the successful operation of the business and increased
efficiency in their work, to align the financial interests of such employees
with those of Company shareholders, to ensure competitive pay and benefits for
those individuals and to provide an opportunity for accumulation of funds for
their retirement. It is intended that the Plan be "unfunded" for purposes of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") and not be
construed to provide income to any participant or beneficiary under the Internal
Revenue Code of 1986, as amended (the "Code") prior to actual receipt of
benefits hereunder.
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 the greater of:
(i) three percent (3%) of the Participant's
Monthly Target Total Cash Compensation as of
July 1, 2002 multiplied by the Participant's
Years of Service as of July 1, 2002,
increased by five percent (5%) compounded
annually until the Participant's
Determination Date, but not to exceed sixty
percent (60%) of the greater of (A) the
Participant's Monthly Target Total Cash
Compensation as of July 1, 2002 or (B) the
Participant's Final Average Compensation;
provided that the maximum benefit for the
Chief Executive Officer of the Company is
seventy percent (70%) of the greater of (A)
or (B); or
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(ii) one-half percent (1/2%) of the Participant's
Final Average Compensation multiplied by
Years of Service.
(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 equal to
the annual rate of interest on 30-year Treasury
securities in effect for the second calendar month
preceding the Plan Year of the distribution.
(c) The term "ADMINISTRATIVE COMMITTEE" shall mean the
Compensation and Benefits Administrative Committee of
the Company; provided, however, that during any
period the Compensation and Benefits Administrative
Committee is not constituted, the term shall mean the
Compensation Committee.
(d) 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. Each Beneficiary
designation shall be in the form prescribed by the
Administrative Committee and will be effective only
when filed with the Administrative Committee during
the Participant's or former Participant's lifetime.
Each Beneficiary designation filed with the
Administrative Committee will cancel all Beneficiary
designations previously filed with the Administrative
Committee. If any Participant or former Participant
fails to designate a Beneficiary in the manner
provided above; or if the Beneficiary designated by a
Participant or former Participant dies before him and
the Participant or former Participant fails to
designate a new Beneficiary, or if the Beneficiary
designated by a deceased Participant or former
Participant dies before complete distribution of the
deceased Participant's or former Participant's
benefit, the Administrative Committee shall direct
that such Participant's or former Participant's
benefit be paid:
(i) To the surviving spouse of such Participant
or former Participant;
(ii) To the surviving children, and the
descendants of any deceased child, per
stirpes, of the Participant or former
Participant;
(iii) To the Participant's surviving brothers and
sisters; or
(iv) To the Participant's estate (executor or
administrator).
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
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to such payment, and the Company shall have no
further obligation to see to the application of any
money so paid.
(e) The term "BENEFIT COMMENCEMENT DATE" shall mean the
first day a benefit is paid to a Participant under
this Plan.
(f) The term "BOARD" shall mean the Board of Directors of
the Company.
(g) The term "CAUSE" shall mean a Participant's
termination of employment due to:
(i) His conviction or plea of guilty or no
contest to a felony involving fraud or
embezzlement with respect to his employment
with the Company; or
(ii) His violation of any non-competition or
non-disclosure agreement with the Company,
or his conviction or plea of guilty or no
contest to an intentional and willful
violation of federal securities laws
involving his duties at the Company or
Company securities.
Notwithstanding the preceding sentence, the
Compensation Committee may, in its discretion,
determine that a termination of employment following
an event described above shall not be deemed for
"Cause."
(h) The term "CHANGE OF CONTROL" shall mean the
occurrence of any one of the following events:
(i) 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 of
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 of Control. A "Non-Control
Acquisition" shall mean an acquisition by
(A) an employee benefit plan (or a trust
forming a part thereof) maintained by (1)
the Company or (2) 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
indirectly, by the Company (for purposes of
this definition, a "Subsidiary") or (B) the
Company or its Subsidiaries;
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(ii) The individuals who, as of the effective
date of the amendment and restatement of the
Plan, 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 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
(iii) A complete liquidation or dissolution of the
Company, or
(iv) 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).
(i) The term "CODE" shall mean the Internal Revenue Code
of 1986, as amended.
(j) The term "COMPANY" shall mean Pegasus Solutions,
Inc., a Delaware Corporation, its corporate
successors, and the surviving entity resulting from
any merger of Pegasus Solutions, Inc. with any
corporation or other entity.
(k) The term "COMPENSATION" shall mean the Participant's
earned income, salary, bonus and other remuneration
from the Employer, including Savings Contributions to
the Pegasus Solutions, Inc. Executive Deferred
Compensation Plan and contributions to the Pegasus
Solutions, Inc. 401(k) Savings Plan or a cafeteria
plan pursuant to section 125 of the Code, but
excluding amounts realized from the exercise of a
non-qualified stock option or when restricted stock
or property held by the Participant either becomes
freely transferable or is no longer subject to a
substantial risk of forfeiture under section 83 of
the Code, "gross-up" payments of any kind,
reimbursements or other expense allowances, and
moving expenses, as determined in the discretion of
the Compensation Committee. Notwithstanding the
foregoing, Compensation shall also include severance
pay under the terms of an Employment Agreement during
the period described thereunder.
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(l) The term "COMPENSATION COMMITTEE" shall mean the
Compensation Committee of the Board; provided
however, that during any period the Compensation
Committee is not constituted, the term shall mean the
Board.
(m) The term "DATE OF PARTICIPATION" shall mean the date
the Compensation Committee specifies as the first day
an Employee commences participation in the Plan.
(n) The term "DETERMINATION DATE" shall mean the date on
which a Participant ceases to be an Employee for any
reason or, if a Participant's Employment Agreement
entitles him or her to continued benefits under the
Plan after termination of employment, the last day of
the month in which his or her continued benefits
cease.
(o) 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.
(p) The term "EMPLOYEE" shall mean an individual on the
payroll of an Employer whose wages from the Employer
are subject to withholding for purposes of Federal
income taxes and for purposes of the Federal
Insurance Contributions Act or any individual
designated by the Compensation Committee as an
Employee for purposes of the Plan.
(q) The term "EMPLOYER" shall mean Pegasus Solutions,
Inc. and any other affiliate of the Company which
employs a Participant.
(r) The term "EMPLOYMENT AGREEMENT" shall mean a written
employment agreement in effect between the Company
and a Participant.
(s) The term "FINAL AVERAGE COMPENSATION" shall mean the
highest average monthly Compensation received by the
Participant from the Employer 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 Employer 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 Employer during the
Participant's period as an Employee ending on the
Participant's Determination Date.
(t) The term "GOOD REASON" means the occurrence of any of
the events or conditions described below:
(i) Absent the Participant's consent, if the
Participant shall cease to maintain his or
her position specified in the Employment
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Agreement with the Company (or any successor
or parent thereof) or upon the assignment to
the Participant of any material duties or
responsibilities which are inconsistent with
his position or responsibilities; or any
removal of the Participant from or failure
to reappoint or reelect him to any such
offices or positions, except during a period
of Total and Permanent Disability or in
connection with the termination of his
employment for Total and Permanent
Disability, Cause, as a result of his death,
or by the Participant other than for Good
Reason;
(ii) Absent the Participant's consent, a
reduction in the Participant's base salary
or any failure to pay the Participant any
compensation or benefits to which he is
entitled within thirty (30) days of the due
date;
(iii) A Change of Control;
(iv) Any material breach by the Company of any
provision of the Participant's Employment
Agreement; provided, however, the
Participant 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
Participant'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 the
Participant's Employment Agreement; or
(vi) The failure of the Company to obtain an
agreement, reasonably satisfactory to the
Participant, from any successor or assign of
the Company to assume and agree to perform
the Participant's Employment Agreement, as
contemplated thereunder.
The Participant's right to terminate his employment
for Good Reason shall not be affected by his
incapacity due to physical or mental illness.
(u) The term "MONTHLY TARGET TOTAL CASH COMPENSATION"
shall mean one-twelfth (1/12) of the sum of a
Participant's annual base salary and annual target
bonus as approved by the Compensation Committee.
(v) 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).
(w) The term "PARTICIPANT" shall mean an Employee who is
selected to participate in the Plan pursuant to
Article III.
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(x) The term "PLAN" shall mean the Pegasus Solutions,
Inc. Supplemental Executive Retirement Plan as set
forth herein, as amended from time to time in
accordance with the Participants' consent as set
forth in Article VII.
(y) The term "PLAN YEAR" shall mean the 12-month period
beginning on each January 1st and ending on the
subsequent December 31st.
(z) The term "TOTAL AND PERMANENT DISABILITY" shall mean:
(i) A mental or physical disability, either
occupational or non-occupational in cause,
which satisfies the definition of
"Disability" (or any corresponding term) as
set forth in an Employment Agreement; or
(ii) If there is no Employment Agreement or if
the Employment Agreement then in effect has
no such defined term or concept, a 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, a mental or physical disability
which, as determined by the Administrative
Committee in good faith upon receipt of and
in reliance on sufficient competent medical
advice from one or more individuals selected
by the Administrative 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 ninety (90) consecutive days.
(aa) The term "YEARS 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. Notwithstanding the
preceding sentence, the Compensation Committee may,
in its discretion, credit a Participant with
additional full or partial Years of Participation.
(bb) The term "YEARS OF SERVICE" shall mean the period of
time, computed to the nearest completed month,
commencing on the Participant's date of hire as an
Employee of the Employer and ending on the
Participant's Determination Date. Notwithstanding the
preceding sentence, the Compensation Committee may,
in its discretion, credit a Participant with
additional full or partial Years of Service.
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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.
ARTICLE III
PARTICIPATION
3.1 Selection of Participants. Participation in the Plan shall be
limited to those select management Employees of the Employer who are designated
as Participants by the Compensation Committee. No person shall have an automatic
right to be selected as a Participant. Notwithstanding the foregoing, a
Participant shall continue to participate in the Plan pursuant to the terms of
an Employment Agreement, where applicable.
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;
(e) Termination of employment with the Employer for Good
Reason following a Change of Control;
(f) Termination of employment after completion of four
(4) Years of Participation (i) by the Employer for
any reason other than Cause or (ii) by the
Participant; or
(g) If a Participant's Employment Agreement provides that
the Participant shall be deemed to have satisfied the
requirements for eligibility for benefits under the
Plan if his or her employment is terminated by the
Company without Cause, or by the Participant for Good
Reason, the Determination Date following termination
by the Company without Cause, as defined in the Plan,
or by the Participant with Good Reason.
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4.2 Amount of Benefits. The benefit payable to the Participant or the
Participant's Beneficiary under the Plan pursuant to Section 4.1 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 day of any month after the
Participant's Determination Date. The reduced benefit
is equal to the Participant's Accrued Benefit reduced
by four percent (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 at
the Participant's death, payable to the Participant's
Beneficiary as soon as practicable following such
death.
(d) Total and Permanent Disability. A monthly benefit
commencing on the first day of the month coinciding
with or next following the 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
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 twelve (12)
months prior to the date benefits commence, elect a benefit of Actuarially
Equivalent value to the Accrued Benefit 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
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in the amount of fifty percent (50%) or one hundred
percent (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; or
(d) A partial or full lump-sum payment, in the discretion
of the Compensation Committee.
4.5 Distributions Following a Change of Control. Notwithstanding the
foregoing:
(a) A Participant shall receive an immediate lump-sum
distribution of his Accrued Benefit if his
Determination Date follows termination of employment
with the Employer within twelve (12) months following
a Change of Control.
(b) A Participant may elect, within twelve (12) months
following a Change of Control, to receive an
in-service distribution of his Accrued Benefit in a
lump sum, provided that such Participant must agree
irrevocably that he or she shall no longer
participate in the Plan. The Company's actuaries
shall provide the calculation of such Actuarially
Equivalent lump sum amount based on the actuarial
assumptions in the Plan. This election must be in
writing, and will be effective as soon as
administratively feasible following the date the
election is received by the Company, but in no event
later than thirty (30) days following the date the
election is received by the Company.
ARTICLE V
FUNDING AND OTHER MATTERS
5.1 No Trust Required.
The adoption of this Plan and any setting aside of amounts by the
Employer with which to discharge its obligations hereunder shall not be deemed
to create a trust; legal and equitable title to any funds so set aside shall
remain in the Employer, and any recipient of benefits hereunder shall have no
security or other interest in such funds. Any and all funds so set aside shall
remain subject to the claims of the general creditors of the Employer. This
provision shall not require the Employer to set aside any funds, but the
Employer may set aside such funds if it chooses to do so.
10
5.2 Funding of Obligation. Section 5.1 above to the contrary
notwithstanding, the Employer may elect to transfer assets to a trust, the
provisions of which may require the use of the trust's assets to satisfy claims
of an Employer's general unsecured creditors in the event of such Employer's
insolvency and direct that no Participant shall at any time have a prior claim
to such assets. The assets of the trust shall not be deemed to be assets of this
Plan. Upon a Change of Control, the Committee shall transfer assets to the trust
sufficient to pay for any benefits accrued under the Plan as of the date of such
action for Participants who are or have been employed by the Employer, where
such accrued benefits shall be the actuarially determined benefits as of such
Change of Control.
5.3 Continued Employment. Nothing contained in the Plan shall be
construed as conferring upon the Participant the right to continue in the
employment of the Employer in any capacity or as otherwise affecting the
employment relationship.
5.4 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.
5.5 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.
5.6 Governing Law. THE PLAN SHALL BE CONSTRUED AND ENFORCED UNDER THE
LAWS OF THE STATE OF TEXAS EXCEPT TO THE EXTENT PREEMPTED BY FEDERAL LAW.
5.7 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.
ARTICLE VI
ADMINISTRATION
6.1 Administration. The Administrative Committee shall be responsible
for the general administration of the Plan. The Administrative Committee and/or
the Compensation Committee shall have the authority to make rules to administer
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.
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6.2 Finality of Determination. The determination of the Administrative
Committee and/or 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 with respect to each
determination assigned to either the Administrative Committee or the
Compensation Committee. These determinations include, but are not limited to,
the Compensation Committee's determinations as to which Employees shall be
Participants and the Administrative Committee's determinations regarding the
specific benefits which shall be paid to or on behalf of each such Participant.
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, the Administrative Committee 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.
6.5 Claims Procedure. If any person (hereinafter called the "Claimant")
feels that he is being denied a benefit to which he is entitled under this Plan,
such Claimant may file a written claim for said benefit with the Administrative
Committee. Within ninety (90) days following the receipt of such claim the
Administrative Committee shall determine and notify the Claimant as to whether
he is entitled to such benefit. If an extension of time is required to process
the claim, this time period may be extended an additional ninety (90) days. If
the claim requires the Administrative Committee to make a determination of Total
and Permanent Disability, the time period in which the Administrative Committee
will review the claim is forty-five (45) days, with two possible extensions of
thirty (30) days each. In all cases, the Claimant will be notified in writing of
an extension and the reasons for the extension. If the claim is denied, the
written notice of denial to the Claimant will include the specific reasons for
the denial, references to the provisions of the Plan supporting the denial, a
description of any additional information necessary for the claim to be granted,
a description of the Plan's claims review procedures, and a statement regarding
the Claimant's legal rights to challenge a denial of his or her claim following
appeal.
If the Claimant still feels that he has a claim, the Claimant may file an appeal
with the Administrative Committee in writing within sixty (60) days of receiving
the notice of denial. If the Claimant requires the Administrative Committee to
make a determination of Total and Permanent Disability, the Claimant may file an
appeal with the Administrative Committee in writing within one hundred eighty
(180) days of receiving the notice of denial. The Claimant may submit documents,
records, and other information related to his or her appeal. Upon request, the
Claimant may review information relevant to the benefit claim or the
Administrative Committee will provide the Claimant with copies of information
relevant to the benefit claim without charge. Final determination on the claim
will be made no later than sixty (60) days after
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the Administrative Committee's receipt of the Claimant's written request for an
appeal. If additional time is required for processing the Claimant's appeal,
this time period may be extended an additional sixty (60) days. If the claim
requires the Administrative Committee to make a determination of Total and
Permanent Disability, a final determination will be made within forty-five (45)
days of the Claimant's request for an appeal. If additional time is required for
processing the appeal, this time period may be extended an additional forty-five
(45) days. In all cases, the Claimant will be notified of an extension and the
reasons for the extension. If the Claimant's appeal is denied, the written
notice of denial will include the specific reasons for the denial, references to
the provisions of the Plan supporting the denial, and a statement regarding the
Claimant's legal rights to challenge the denial of the claim. Upon request, the
Claimant may review information relevant to the benefit claim or the
Administrative Committee will provide the Claimant with copies of information
relevant to the benefit claim without charge. The final decision of the
Administrative Committee shall be conclusive and binding upon all parties having
or claiming to have an interest in the matter being reviewed.
ARTICLE VII
AMENDMENT AND TERMINATION
7.1 Amendment and Termination. The Board may at any time amend or
terminate the Plan, provided that a Participant shall not be subject to any such
amendment or termination without his or her written consent. 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.
IN TESTIMONY WHEREOF, PEGASUS SOLUTIONS, INC. has caused this
instrument to be executed in its name and on its behalf, by the officer
thereunto duly authorized this 28th day of February, 2003, effective as of
July 1, 2002.
PEGASUS SOLUTIONS, INC.
By:
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Title:
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Attest:
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