EMPLOYMENT AGREEMENT
EXHIBIT 10.8
THIS AGREEMENT is entered into as of the 1st day of March, 2005 (the “Effective Date”), by and
between Pegasus Solutions, Inc., a Delaware corporation (the “Company”) and Xxxxxxx Xxxxxxx (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 initial term of employment shall commence on the Effective Date and shall expire on the
third anniversary of the Effective Date (the “Initial Term”) provided that in the event neither
party provides Notice of Termination (as hereinafter defined) at least 30 days prior to the
expiration of the Initial Term, such term will be automatically renewed and extended for successive
30 day periods thereafter until terminated as provided herein.
| 2. | Employment. |
(a) While employed by the Company, Executive shall perform the duties, undertake the
responsibilities as assigned by the Company and exercise the authority customarily performed,
undertaken and exercised by persons situated in a similar executive capacity and, 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.
| 3. | Compensation. |
(a) Base Salary. The Company agrees to pay or cause to be paid to the Executive an annual
base salary as mutually agreed, and as may be increased from time to time by mutual agreement
(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 may 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 Company. 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.
| 4. | Employee Benefits. |
The Executive shall be entitled to participate in all employee benefit plans, practices and
programs maintained by the Company and made available to all employees generally, including,
without limitation, all pension, retirement, profit sharing, savings, medical, hospitalization,
disability, dental, life or travel accident insurance benefit plans. 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 otherwise set forth
herein, nothing herein shall obligate the Company to adopt such plans, practices or programs.
| 5. | Other Benefits. |
(a) Fringe Benefits and Perquisites. The Executive shall be entitled to participate in the
Executive Perquisite Plan of the Company as described in Attachment A hereto (the “Perquisite
Plan”).
(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 including
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.
| 6. | Vacation and Sick Leave. |
During the Employment Term, at such reasonable times as the Chief Executive Officer shall in
his 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 twenty-two (22) days of annual vacation in accordance
with Company policies as in effect from time to time.
(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.
| 7. | Termination. |
In the event of a Change In Control (as hereinafter defined) resulting in Executive giving
Notice of Termination occurring while this Agreement is in effect or in the event Executive is
terminated by the Company for reasons other than “cause” (as hereinafter defined) prior to the
expiration of the Initial Term of this Agreement, the Company shall pay and provide the following
benefits to Executive:
(1) the Company shall continue to pay Executive as severance pay and in lieu of any
further compensation a monthly payment for a period of twelve (12) months following
the Termination Date, but for no longer period than the expiration of the Initial
Term, an amount equal to Executive’s monthly Base
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Salary and Perquisite Plan in effect for the month immediately preceding the
Termination Date,.
(2) for the twelve (12) month period immediately following the Termination Date, but
for no longer period than the Initial Term, the Company shall reimburse Executive
for COBRA payments for the insurance coverage in effect immediately prior to the
Termination Date. 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.
The Executive hereby acknowledges that full payment and/or performance by the Company of its
obligations as set forth in Section 7 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 Section.
| 8. | Definitions. |
(a) Notice of Termination. A Notice of Termination is a written notice given by the Company
to the Executive or by the Executive to the Company terminating this Agreement and the Executives’
employment. The Notice of Termination must be given at least 30 in advance of the Termination Date
(as hereinafter defined).
(b) Termination Date. For purposes of this Agreement, “Termination Date” shall mean the date
specified in the Notice of Termination provided that if the Executive’s employment is terminated
because of a Change In Control, 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.
(c) Cause. A termination of employment is for “cause” if the Executive:
| (1) | has been convicted of or pleads 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 Executive 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 not 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 Executive has acted, or failed to act, with an absence of good faith and |
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| without a reasonable belief that Executive’s 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; or | ||
| (4) | violates any valid non-competition or non-disclosure agreement or the Company’s xxxxxxx xxxxxxx policy, if any. |
(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 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 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 |
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| (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). |
| 9. | 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.
| 10. | 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.
| 11. | 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.
| 12. | 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.
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| 13. | 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 16 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.
| 14. | 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.
| 15. | 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.
| 16. | Arbitration. |
Any dispute or controversy arising out of or relating to this Agreement, except the right to
injunctive relief, 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 judgment upon the award rendered by the arbitrator may be entered in any court
of competent jurisdiction, hereby expressly waiving the right to jury trial. 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 SOLUTIONS, INC. | EXECUTIVE: | |||||
By:
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By: | |||||
| Xxxxxxx Xxxxxxx | ||||||
Print: |
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Title: |
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