Exhibit 6
Renaissance Hotel Group N.V.
Key Employee Severance Plan
ARTICLE 1
PURPOSE AND DEFINITIONS
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1.1 Purpose. The purpose of this Renaissance Hotel Group N.V. Key Employee
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Severance Plan ("Plan") is to protect a select group of key employees
against an involuntary loss of employment under certain circumstances
following a change in control of Renaissance Hotel Group N.V. To the
extent that the Plan is considered to be a plan for purposes of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), it
shall be considered an unfunded plan maintained primarily for the purpose
of providing benefits for a select group of management or highly
compensated employees, within the meaning of U.S. Department of Labor
Regulations Section 2520.104-24.
1.2 Definitions. The following words and phrases as used herein shall have the
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following meanings, unless a different meaning is required by the context:
"Annual Compensation" shall mean, with respect to a Participant, the
Participant's gross annual base salary at the rate in effect on the date of
a Change of Control (as defined herein).
"Board of Directors" or "Board" shall mean the Board of Managing Directors
of the Company as constituted at any time.
"Cause" shall mean any act or any failure to act on the part of a
Participant which constitutes a felony for which the Participant is
convicted or pleads nolo contendere.
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"Change of Control" shall mean the first to occur of the following events:
(a) the sale or other divestiture of all or substantially all of the
assets of the Company or the Subsidiary;
(b) the acquisition by any person or affiliated group of persons of
more than 50% of the outstanding common stock of the Company or
of the Subsidiary; or
(c) a change in the composition of the Board such that a majority of
the Board is not comprised of persons affiliated with or employed
by New World
Group Members (as such term is defined in the such term is
defined in the Company's prospectus with respect to its September
1995 initial public offering).
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean the Compensation Committee of the Board.
"Company" shall mean Renaissance Hotel Group N.V., and any successors
thereto by merger, consolidation, liquidation or other reorganization.
"Good Reason" shall mean the occurrence of any of the following with
respect to a Participant or his or her status, position, responsibilities
or compensation existing immediately prior to a Change of Control, unless
the Participant has consented thereto in writing: (i) any limitation of the
Participant's responsibilities or duties, or any demotion in the
Participant's position, (ii) any removal of the Participant from, or
failure to re-elect the Participant to, any of the positions with the
Company or the Subsidiary held by the Participant, (iii) any reduction in
the Participant's annual base salary or fringe benefit coverages, (iv) any
detrimental change in the Participant's bonus entitlement or in the formula
or method of calculation of such bonus, (v) any increase in the
Participant's travel obligations, or (vi) any change in the Participant's
principal work location or the location of the Participant's primary work
group by more than 35 miles from such Participant's or primary work group's
current location.
"Involuntary Termination" shall mean a termination by the Company or the
Subsidiary of a Participant"s employment for any reason other than Cause or
the resignation by a Participant from his or her employment with the
Company or the Subsidiary for Good Reason.
"Participant" shall mean any employee who is entitled to participate in the
Plan in accordance with Section 2.2.
"Severance Amount" shall mean the amount determined pursuant to Section
3.1.
"Subsidiary" shall mean Renaissance Hotel Operating Company, a subsidiary
of the Company.
ARTICLE 2
ELIGIBILITY AND PARTICIPATION
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2.1 Eligibility. Each employee of the Company or the Subsidiary whose title
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is listed on
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Schedule A hereto and any other employee of the Company or the
Subsidiary who has been approved by the Compensation Committee for
participation in the Plan shall be eligible to become a Participant
pursuant to Section 2.2.
2.2 Participation. The Company shall, as soon as practicable after the
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effective date of the Plan, prepare and send a separate letter of
participation ("Participation Letter") to each such employee who is
eligible to participate in the Plan. The Participation Letter shall set
forth the formula for the Severance Amount applicable to the Participant,
shall set forth the prohibition on duplicative severance benefits as set
forth in Section 6.2, and shall incorporate by reference the terms and
conditions of the Plan. An employee shall not become a Participant unless
and until he or she signs and agrees to his or her Participation Letter and
the terms and conditions of the Plan.
ARTICLE 3
BENEFITS
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3.1 Amount of Severance Benefit. The Severance Amount to which a Participant
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shall be entitled under the Plan shall be equal to the Participant's
Annual Compensation multiplied by two and four-tenths (2.4).
3.2 Entitlement; Payment in Lump Sum. In the event a Participant's employment
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with the Company or the Subsidiary terminates within two years after a
Change of Control due to an Involuntary Termination, the Severance Amount
shall be paid in a lump sum by the Company or Subsidiary immediately upon
or following the Participant*s Involuntary Termination.
3.3 Excess Parachute Tax Gross-Up. To provide the Participant with adequate
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protection in connection with the Participant's ongoing employment with the
Company, the Company provides the Participant with various benefits
pursuant to this Plan and otherwise. On or following a "Change in
Control," within the meaning of Section 280G of the Code, it is possible
that a portion of those benefits might be characterized as "excess
parachute payments," within the meaning of Section 280G of the Code. The
Company acknowledges that the protections set forth in this Section 3.3 are
important, and it is agreed that the Participant should not have to bear
the burden of any excise tax that might be levied under Section 4999 of the
Code in the event that a portion of the benefits payable to the Participant
pursuant to this Plan or otherwise are treated as excess parachute
payments. The following shall therefore apply:
(a) Notwithstanding any other provision of this Plan to the contrary,
if it shall be determined that any payment or benefit provided by
the Company or
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the Subsidiary and any other person to or for the benefit of the
Participant (whether paid or payable or provided or providable
pursuant to the terms of this Plan or otherwise, but determined
without regard to any additional payments required under this
Section 3.3) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Code, or any interest or penalties
are incurred by the Participant with respect to such excise tax
(such excise tax, together with any such interest and penalties,
being hereinafter collectively referred to as the "Excise Tax"),
then the Company or the Subsidiary shall pay to or on behalf of
the Participant an additional payment (a "Gross-Up Payment") in
an amount such that after payment by the Participant of all taxes
(including any interest or penalties imposed with respect to such
taxes), including, without limitation, any income taxes (and any
interest or penalties imposed with respect thereto) and Excise
Tax imposed upon the Gross-Up Payment, the Participant retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed
upon the Payment.
(b) All determinations required to be made under this Section 3.3,
including whether and when a Gross-Up Payment is required and the
amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by an
independent public accounting firm with a national reputation in
the United States that is selected by the Company (the
"Accounting Firm") which shall provide detailed support and
calculations both to the Participant and to the Company within
fifteen (15) business days after the receipt of notice from the
Company that there has been a Payment. The amount of any Gross-
Up Payment shall be paid in a lump sum within seven days
following such determination by the Accounting Firm. In the
event that the Accounting Firm's determination is not finally
accepted by the Internal Revenue Service upon any audit, then an
appropriate adjustment, including penalties and interest, if any,
shall be computed (with an additional Gross-Up Payment, if
applicable) by the Accounting Firm based upon the final amount of
the Excise Tax so determined. Such adjustment shall be paid by
the appropriate party in a lump sum within seven days following
the computation of such adjustment by the Accounting Firm. All
fees and expenses of the Accounting Firm shall be borne solely by
the Company.
3.4 Withholding. Payments under the Plan are subject to such federal, state
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and local income tax withholding and all other federal, state and local
taxes as are applicable. The Company and the Subsidiary shall withhold
from any payments it makes all applicable federal, state and local
withholding taxes.
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ARTICLE 4
CLAIMS
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4.1 Claims Procedure. If any Participant has a claim for benefits which are
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not being paid, such claimant may file with the Committee a written claim
setting forth the amount and nature of the claim, supporting facts, and the
claimant's address. The Committee shall notify each claimant of its
decision in writing by registered or certified mail within 30 days after
its receipt of a claim, unless otherwise agreed by the claimant. If a
claim is denied, the written notice of denial shall set forth the reasons
for such denial, refer to pertinent Plan provisions on which the denial is
based, describe any additional material or information necessary for the
claimant to realize the claim, and explain the claim review procedure under
the Plan.
4.2 Claims Review Procedure. A claimant whose claim has been denied or such
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claimant's duly authorized representative may file, within 60 days after
notice of such denial is received by the claimant, a written request for
review of such claim by the Committee. If a request is so filed, the
Committee shall review the claim and notify the claimant in writing of its
decision within 30 days after receipt of such request. In special
circumstances, the Committee may extend for up to 15 additional days the
deadline for its decision. The notice of the final decision of the
Committee shall include the reasons for its decision and specific
references to the Plan provisions on which the decision is based. The
decision of the Committee may be appealed only pursuant to Section 6.9.
ARTICLE 5
ADMINISTRATION
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5.1 Plan Administrator. The Company shall be the Plan Administrator and shall
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administer the Plan through the Committee.
5.2 Powers. The Committee shall have the power to do all things necessary or
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convenient to effect the intent and purposes of the Plan, whether or not
such powers are specifically set forth herein, and, by way of amplification
and not limitation of the foregoing, the Committee shall have authority, in
its reasonable judgment, to:
(a) provide rules for the management, operation and administration of
the Plan, and, from time to time, amend or supplement such rules;
(b) construe the Plan in good faith to the fullest extent permitted
by law;
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(c) correct any defect, supply any omission, or reconcile any
inconsistency in the Plan in such manner and to such extent as it
shall deem appropriate in its reasonable discretion to carry the
same into effect; and
(d) make reasonable determinations as to a Participant's eligibility
for benefits under the Plan, including determinations as to Cause
and Good Reason.
5.3 Binding Authority. The decisions of the Committee shall be final and
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conclusive for all purposes of the Plan, subject to any appeal or review
pursuant to Sections 4.2 and 6.9.
5.4 Exculpation. No member of the Board or Committee shall be directly or
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indirectly responsible or otherwise liable by reason of any action or
default in connection with the Plan, or by reason of the exercise of or
failure to exercise any power or discretion in connection with the Plan,
except for any action, default, exercise or failure to exercise in
connection with the Plan resulting from such member's bad faith, gross
negligence or willful misconduct. No member of the Board or Committee
shall be liable in any way for the acts or defaults of any other member of
the Board, or any of its advisors, agents or representatives.
5.5 Indemnification. The Company shall indemnify and hold harmless each member
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of the Board and Committee against any and all expenses and liabilities in
connection with the Plan arising out of his membership on the Board or
Committee, except for expenses and liabilities arising out of a member*s
bad faith, gross negligence or willful misconduct.
5.6 Compensation and Expenses. Members of the Board or Committee who are
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employees of the Company shall not receive any compensation for their
services rendered as such members. The Company shall pay for all expenses
of the Board and Committee reasonably incurred in connection with the Plan,
including but not limited to legal expenses.
5.7 Information. The Company and the Subsidiary shall furnish to the Committee
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in writing all information the Committee may deem appropriate for the
exercise of its powers and duties in the administration of the Plan. Such
information shall be conclusive for all purposes of the Plan, and the
Committee shall be entitled to rely thereon without any investigation
thereof.
ARTICLE 6
GENERAL PROVISIONS
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6.1 Non-Property Interest. All benefits payable under the Plan shall be paid
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out of the general assets of the Company or the Subsidiary. Any
Participant who may have or claim any interest in or right to any
compensation, payment or benefit payable hereunder, shall have solely the
status of a general unsecured creditor of the Company and the Subsidiary
and the Plan constitutes a mere promise by the Company and the Subsidiary
to make benefit payments in the future. Nothing herein contained shall be
construed to give to or vest in the Participant or any other person now or
at any time in the future, any right, title, interest or claim in or to any
specific asset, fund, reserve, account, insurance or annuity policy or
contract or other property of any kind whatsoever owned by the Company or
the Subsidiary, or in which the Company or the Subsidiary may have any
right, title or interest now or at any time in the future. It is the
intention of the Company, the Subsidiary and Participants that the Plan be
unfunded for tax purposes and for purposes of Title I of ERISA.
6.2 Other Rights. The Plan shall not affect or impair the rights or
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obligations of the Company or the Subsidiary or a Participant under any
other written plan, contract, arrangement, or pension, profit sharing or
other compensation plan; provided, however, that, from and after a Change
in Control and so long as this Plan is in effect, a Participant shall not
be entitled to any severance benefits under any other plan or policy of the
Company or the Subsidiary or any other agreement between the Participant
and the Company or Subsidiary, including any salary continuation or other
post-termination benefits under an employment agreement between the
Participant and the Company or the Subsidiary. Notwithstanding any other
provision of the Plan, the Company or the Subsidiary may require a
Participant who is a party to such an employment agreement to execute an
appropriate release with respect to such agreement as a condition to the
receipt of a Severance Amount under the Plan. For purposes of the
prohibition on duplicative benefits under this Section 6.2, benefits under
a vacation or sick pay policy, if any, shall not be deemed to be severance
benefits.
6.3 Amendment or Termination. The Plan may be amended, modified, suspended, or
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terminated by the Company at any time and from time to time by action of
the Board; provided, however, that any such amendment, modification,
suspension or termination which would adversely affect the rights of any
person who is then a Participant shall be subject to the prior written
consent of such Participant.
6.4 Severability. If any term or condition of the Plan shall be invalid or
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unenforceable to any extent or in any application, then the remainder of
the Plan, with the exception of such invalid or unenforceable provision,
shall not be affected thereby and shall continue in effect and application
to its fullest extent.
6.5 No Employment Rights. Neither the establishment of the Plan, any
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provisions of the Plan, nor any action of the Board or the Committee shall
be held or construed to confer
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upon any employee the right to a continuation of employment by the Company
or the Subsidiary. Subject to any applicable employment agreement, the
Company and the Subsidiary each reserves the right to dismiss any employee,
or otherwise deal with any employee to the same extent as though the Plan
had not been adopted.
6.6 Incapacity. If the Committee determines that a Participant is unable to
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care for his or her affairs because of illness or accident, any benefit due
the Participant may be paid to the Participant*s spouse or to any other
person deemed by the Committee to have incurred expense for such
Participant (including a duly appointed guardian, committee or other legal
representative), and any such payment shall be a complete discharge of the
Company's or the Subsidiary's obligation hereunder.
6.7 Transferability of Rights. The Company and the Subsidiary each shall have
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the unrestricted right to transfer its obligations under the Plan with
respect to one or more Participants to any person, including, but not
limited to, any purchaser of all or any part of the Company*s business. A
Participant*s rights to benefit payments under the Plan are not subject in
any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by creditors of the Participant.
Any attempt to transfer or assign a benefit, or any rights granted
hereunder, by a Participant shall, in the sole discretion of the Committee
(after consideration of such facts as it deems pertinent), be grounds for
terminating any rights of the Participant to any portion of the Plan
benefits not previously paid.
6.8 Governing Law. The Plan shall be construed, administered, and enforced
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according to the laws of the State of New York, except to the extent that
such laws are preempted by the federal laws of the United States of
America.
6.9 Arbitration of All Disputes. Any controversy or claim arising out of or
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relating to the Plan, after exhaustion of the procedures under Article IV,
shall be settled exclusively by arbitration in the City of Cleveland,
Ohio. The arbitration shall be conducted in accordance with the then
existing rules of the American Arbitration Association. The arbitrators
shall not have the power to add to or delete from or otherwise amend the
provisions of the Plan. If a Participant is dissatisfied with the written
decision of the Committee under Section 4.2 he shall have the right to
appeal the matter to arbitration pursuant to this Section 6.9. A demand
for arbitration must be submitted in writing to the Committee within 120
days after receipt of the Committee's written decision under Section 4.2.
If an arbitration is demanded, the Committee shall submit to the
arbitrators a certified copy of the record upon which the Committee's
decision was made. The decision rendered by the arbitrators shall be final
and binding upon all parties. The costs and expenses of the arbitration
shall be borne by each respective party; provided, however, that the
arbitrators shall award costs and expenses to the Participant if the
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Participant is the prevailing party. Judgment upon the award rendered by
the arbitrators may be entered in any court having jurisdiction thereof.
6.10 Gender Neutrality. The masculine pronoun shall be deemed to include the
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feminine, and the singular number shall be deemed to include the plural
unless a different meaning is plainly required by the context.
6.11 Effective Date. The Plan was authorized and adopted by the Board as of,
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and shall be effective at, January 10, 1997.
RENAISSANCE HOTEL GROUP N.V.
By:________________________________________
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Schedule A
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Titles
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Senior Vice President
Vice President
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