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EXHIBIT 10.29
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DOUBLETREE HOTELS CORPORATION
Supplemental Executive Retirement Plan
1. Introduction
The Board of Directors of Doubletree Hotels Corporation (the "Company")
established the Doubletree Hotels Corporation Supplemental Executive
Retirement Plan (the "Plan") in order to improve the competitive nature
and overall equity of total retirement income for selected key
employees and to provide a means to assist the Company in attracting
and retraining certain mid-career senior management employees. The Plan
is effective February 15, 1997. The Plan is not a qualified plan under
the Internal Revenue Code of 1986, as amended (the "Code"), and the
benefits are paid to participants directly by the Company or by an
entity established by the Company for the sole purpose of providing
benefits under this Plan.
2. Definitions
(a) Average Compensation means the average of the Compensation
paid to the Participant during the three calendar years,
whether or not consecutive, that yields the highest number
(b) Beneficiary means the person(s) or entity designated to
receive the Plan Benefit in the event both the Participant and
Surviving Spouse die before all the required Plan Benefit is
paid
(c) Board means the Board of Directors of the Company
(d) Change in Control is defined as the merger or consolidation of
the Company with or into another corporation, the exchange of
all or substantially all of the assets of the Company for the
securities of another corporation, the acquisition by another
corporation or person of all or substantially all of the
Company's assets, the acquisition by another corporation or
person of more than 50% of the Company's then-outstanding
voting stock, or the liquidation of dissolution of the Company
(each a "Change of Control", provided, however, that an
acquisition by the General Electric Pension Trust or its
affiliates, by Canadian Pacific or its affiliates, by Richard
Ferris, or by Peter Ueberroth of more than 50% of the
Company's then-outstanding voting stock shall not be deemed a
Change of Control).
(e) Committee means the Compensation Committee of the Board or
other Committee of the Board, and any delegate of the
Committee, appointed by the Board to administer this Plan
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Doubletree Hotels Corporation
Supplemental Executive Retirement Plan
Page 2
(f) Compensation means the sum of the base salary and bonus earned
by the Participant and paid by the Company for a calendar
year. For purposes of this Section 2(f), an Executive's
"bonus" for any calendar year shall be the Participant's
annual incentive award earned for the calendar year,
regardless of whether such award is determined or payable
after the end of the calendar year. A Participant's
Compensation shall be determined without regard to any
compensation reductions or deferrals under Code section 125 or
401(k) and without regard to any salary or bonus deferrals
under any nonqualified deferred compensation plans of the
Company
(g) Early Retirement Date means the date prior to the Normal
Retirement date which is the first day of the month coincident
with or next following a Participant's retirement from the
Company after attaining age 55 but prior to attaining age 60
(h) Normal Retirement Date means the first day of the month
coincident with or next following a Participant's retirement
from the Company after attaining age 60
(i) Participant means an executive designated according to
Section 3.
(j) Participant Vesting Percentage is the product of the number of
years of service of the Participant multiplied by 10%, with a
maximum of 100%
(k) Plan Benefit means an annual benefit payable under the terms
of the Plan as defined in Section 5
(l) Surviving Spouse means the person to whom the Participant is
legally married on the date of death of the Participant and
who survives the Participant
(m) Total and Permanent Disability means a disability which
entitles the Participant to benefits under any long-term
disability plan maintained by the Company or, in the absence
of such a plan, entitles the Participant to Social Security
disability benefits
(n) Years of Service means the Participant's total years of
service with the Company, as determined by the Committee, for
purposes of determining a benefit under this Plan.
3. Participation
An Executive shall become a Participant in the Plan if and when
nominated for participation by the Company's Chief Executive Officer
and approved by the Committee; provided, however, that participation in
the Plan by such Chief Executive Officer will occur following
nomination and approval by the Committee alone.
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Doubletree Hotels Corporation
Supplemental Executive Retirement Plan
Page 3
Upon the recommendation of the Company's Chief Executive Officer, the
Committee may terminate a Participant's active participation in the
Plan if there has been, at any time, a reduction in the Participant's
title, responsibilities (including reporting responsibilities) or
authority, whether or not such reduction places the Participant below
any level at which he previously was during the term of the
Participant's employment with the Company.
In the case of a termination of active participation described above,
the affected Participant's Average Compensation will be calculated and
frozen as of the date of such termination and the participant will be
entitled to receive a Plan benefit only if the Participant otherwise
qualifies hereunder. Except for purposes of receiving a vested Plan
Benefit, participation hereunder shall terminate on the date a
Participant terminates employment with the Company.
4. Vesting
A Participant will vest in the Plan Benefit at the rate of 10% per year
of service with the Company, unless otherwise determined by the
Committee. However, in the case of Richard Kelleher and William
Perocchi, the two participants will have a Participant Vesting
Percentage of 100% as of the effective date of the Plan. Upon a Change
of Control, all Participants will have a Participant Vesting Percentage
of 100%.
5. Plan Benefit
(a) Normal Retirement. Upon retirement at the Normal Retirement
Date or later, the Participant will receive a Plan Benefit
equal to [(i) x (ii)] where
(i) = 60% of Average Compensation
(ii) = Participant Vesting Percentage
(b) Early Retirement. Upon retirement at an Early Retirement Date,
the Participant will receive a Plan Benefit equal to [(i) x
(ii)] where
(i) = Applicable Percent of Average Compensation from the
chart below
(ii) = Participant Vesting Percentage
The Applicable Percent varies based upon the Participant's age
at Early Retirement as follows
Age at Applicable
Early Retirement Percent
59 58%
58 56%
57 54%
56 52%
55 50%
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Doubletree Hotels Corporation
Supplemental Executive Retirement Plan
Page 4
For purposes of this Plan Benefit, the "Age at Early
Retirement" will be the Participant's age closest to the
retirement date of the Participant, rounded to the nearest
whole year. However, in no case will any Plan Benefit become
available until the Participant achieves their 55th birthday.
(c) Benefit Upon Termination. Should a Participant terminate
employment with the Company after vesting in any Plan Benefit,
the Plan Benefit will be calculated based upon the Participant
Vesting Percentage using the formula in Section 5 (a) or 5
(b), as appropriate, determined based upon the age at which
the Participant requests their vested Plan Benefit to begin.
(d) Benefit Upon Death or Disability. In the event of a
Participant's death prior to receiving any Plan Benefit, any
vested benefit will be available to the Participant's Spouse.
This Plan Benefit will be calculated based on the
Participant's Vesting Percentage as of the date of death. The
Plan Benefit will be payable at the request of the Surviving
Spouse, starting no earlier than the time the Participant
would have reached age 55. The Plan Benefit will be calculated
based upon the formula in Section 5(a) or 5(b) as appropriate,
determined by the age the Participant would have reached as of
the time the Plan Benefit begins.
In the event of a Participant's permanent disability prior to
receiving any Plan Benefit, any vested Plan Benefit will be
available, calculated based on the Participant's Vesting
Percentage as of the date of permanent disability. The Plan
Benefit will be payable at the request of the Participant
beginning no earlier than age 55, with the Plan Benefit
calculated based upon Section 5(a) or 5(b), as appropriate,
determined by the age of the Participant at the time the Plan
Benefit is requested to begin.
(e) Change of Control: Upon a change of Control of the Company,
the Plan Benefit will be calculated as defined in Section 5(a)
for all Participants regardless of their age at retirement.
Any Plan Benefit following a Change of Control will be payable
starting at the time the Change of Control occurs, or upon the
Participant's retirement, whichever is later. In addition,
should the Plan Benefit payable upon a Change of Control
constitute a Parachute Payment that is subject to the "golden
parachute" rules of Code section 280G and the excise tax of
Code section 4999, the Company will pay all golden parachute
taxes plus an additional amount ("gross up") necessary to
cover the taxes on the golden parachute tax payments made on
behalf of the Participant by the Company
6. Form of Payment
The following forms of payment of the Plan Benefit are
available:
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Doubletree Hotels Corporation
Supplemental Executive Retirement Plan
Page 5
(a) Joint and Survivor Benefit: The normal form of the Plan
Benefit will be payable as a Joint and Survivor benefit,
defined as an annuity for the life of the Participant with a
survivor annuity for the life of the Surviving Spouse which is
equal to 50% of the amount of the annuity which is payable
during the joint lives of the Participant and Surviving Spouse
and which is the actuarial equivalent of an annuity for the
life of the Participant. However, the Plan Benefit will be
payable for a minimum of ten years ("Ten Year Certain")
starting with the date the Participant elects to receive the
Plan Benefit. Should both the Participant and the Surviving
Spouse die prior to the payment of the Plan Benefit for ten
years, the Plan Benefit payable for the remainder of the Ten
Year Certain period would be made to the designated
Beneficiary. All Plan Benefits will be paid in 12 equal
monthly installments.
(b) Lump Sum Benefit: At the time an executive is designated a
Participant in the Plan, the Participant may elect to receive
a lump sum ("Lump Sum") payment of the Plan Benefit. This Lump
Sum payment will be calculated and paid at the date the Plan
Benefit begins. The present value for the Lump Sum will be
calculated using (i) a discount rate equal to the annual
interest rate payable on Five Year Treasury Bills as quoted in
the Wall Street Journal as of the date the Plan Benefit
begins, and (ii) the GAM Mortality Table.
(c) Change of Control: Upon a Change of Control, any Participant
who did not elect a Lump Sum, as defined in Section 6(b), may
then elect to receive a Lump Sum benefit upon retirement.
7. Funding
The Plan Benefit shall be paid from the general assets of the Company.
The Company in its sole discretion may earmark assets or use other
means to meet the benefit obligations provided under the Plan. Title to
and beneficial ownership of any assets which the Company may earmark to
meet the benefit obligations shall at all times remain in the Company;
and neither a Participant, Surviving Spouse, or Beneficiary shall have
any proprietary or property interest whatsoever in any specific assets
of the Company.
Nothing contained in the Plan and no action taken pursuant to the
provisions of the Plan shall create or be construed to create a trust
of any kind, or a fiduciary relationship between the Company and a
Participant or any other person. However, notwithstanding the forgoing,
the Company may use one or more irrevocable grantor trusts as
mechanisms for funding benefits hereunder. Any assets which may be
earmarked to meet an the Company's benefit obligation provided under
the Plan shall continue for all purposes to be part of the general
funds of the Company and no person other than the Company shall, by
virtue of the provisions of the Plan, have any interest in such assets.
The right of a Participant, Surviving Spouse or Beneficiary to a Plan
Benefit shall be no greater than that of an unsecured general creditor
of the Company.
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Doubletree Hotels Corporation
Supplemental Executive Retirement Plan
Page 6
8. Miscellaneous Provisions
(a) The Plan does not constitute a contract of employment, and
participation in the Plan shall not give any Participant the
right to be retained in the service of the Company or any
right or claim to a Benefit under the Plan, unless such right
or claim has specifically accrued under the terms of this
document
(b) The right of a Participant to the payment of a Plan Benefit
under the Plan shall not be assigned, transferred, pledged or
encumbered
(c) The captions of the articles of the Plan document are inserted
for convenience of reference only and shall not be considered
in the construction thereof
(d) Wherever any word is used herein in the singular form, it
shall be construed as though it were used in the plural form,
as the context requires, and vice versa
(e) A masculine, feminine or neuter pronoun, whenever used herein,
shall be construed to include all genders, as the context
requires
(f) In the event any provision in the Plan document shall be held
illegal or invalid for any reason, such illegal or invalid
provision shall not affect the remaining provisions hereof,
and the Plan document shall be construed and enforced as if
such illegal or invalid provision was not contained herein
(g) Except to the extent preempted by federal law, this Plan
document shall be construed, administered and enforced in
accordance with the domestic internal law of the State of
Arizona
(h) Notwithstanding anything herein to the contrary, any Plan
Benefit payable to, or on account of, a Participant shall be
forfeited if (i) the Participant admits or is judicially
proven to have committed fraud or dishonesty toward the
Company (or any business affiliated with the Company, or any
individual or company doing business with any of them); or
(ii) the Participant is convicted of, or pleads nolo
contendere to, a felony not otherwise described in
Clause (i) above. In the case of a violation of Clause (i),
upon demand of the Company, a Participant shall immediately be
obligated to reimburse the Company for all amounts received
under this Plan. In the case of a violation of Clause (ii),
upon demand of the Company, a Participant shall immediately be
obligated to reimburse the Company for all amounts received
under the Plan following the first occurrence of an event
giving rise to such a visitation.
* * *
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Doubletree Hotels Corporation
Supplemental Executive Retirement Plan
Page 7
In witness thereof, the Company has caused this Plan document to be executed on
it's behalf, and on behalf of all Participants, by the Committee as of February
15, 1997.
DOUBLETREE HOTELS CORPORATION
By: /s/ Richard Ferris
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Richard Ferris
Co-Chairman of the Board
Attest: /s/ William L. Perocchi
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(Name)
Exec VP & CFO
---------------------------------
(Title)
Doubletree Hotels Corporation
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Doubletree Hotels Corporation
Supplemental Executive Retirement Plan
Page 7
In witness thereof, the Company has caused this Plan document to be executed on
it's behalf, and on behalf of all Participants, by the Committee as of February
15, 1997.
DOUBLETREE HOTELS CORPORATION
By: /s/ Richard Ferris
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Richard Ferris
Co-Chairman of the Board
Attest: /s/ Richard M. Kelleher
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(Name)
President and C.E.O.
--------------------------------
(Title)
Doubletree Hotels Corporation
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DOUBLETREE HOTELS CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Lump Sum Benefit Election Form
I have read the provisions of the Doubletree Hotels Corporation Supplemental
Executive Retirement Plan (the "Plan"), including Section 6 regarding Form of
Payment.
I hereby elect to have the Plan Benefit provided as a Lump Sum Benefit,
calculated as described in Section 6(b) of the Plan.
This election is considered final and cannot be changed unless superseded by an
election form signed and executed on a date following the date shown below.
By: /s/ William L. Perocchi Date: 6/5/97
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Name (Signature)
William L. Perocchi
----------------------------
Name (Print)
Attest: /s/ Richard Ferris Date: 6-10-97
------------------------ --------------------------
Name (Signature)
Richard Ferris
------------------------
Name (Print)
Co-Chairman
------------------------
Title (Doubletree Hotels
Corporation)
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DOUBLETREE HOTELS CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Lump Sum Benefit Election Form
I have read the provisions of the Doubletree Hotels Corporation Supplemental
Executive Retirement Plan (the "Plan"), including Section 6 regarding Form of
Payment.
I hereby elect to have the Plan Benefit provided as a Lump Sum Benefit,
calculated as described in Section 6(b) of the Plan.
This election is considered final and cannot be changed unless superseded by an
election form signed and executed on a date following the date shown below.
By: /s/ Richard M. Kelleher Date: 6-6-97
---------------------------- -------------------------
Name (Signature)
Richard M. Kelleher
----------------------------
Name (Print)
Attest: /s/ Richard Ferris Date: 6-10-97
------------------------ --------------------------
Name (Signature)
Richard Ferris
------------------------
Name (Print)
Co-Chairman
------------------------
Title (Doubletree Hotels
Corporation)
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[DOULETREE CORPORATION LETTERHEAD]
December 9, 1997
Richard M. Kelleher
President & Chief Executive Officer
and
William L. Perocchi
Executive V.P. & Chief Financial Officer
Doubletree Corporation
410 North 44th Street, Suite 700
Phoenix, Arizona 85008
Dear Gentlemen:
This letter will clarify the application of the Doubletree Hotels
Corporation Supplemental Executive Retirement Plan (the "SERP") upon the
occurrence of a "Change of Control" thereunder. This letter does not represent
an amendment or change to the SERP, nor does it supersede any otherwise
applicable provision of the SERP. All capitalized terms set forth below that are
not defined herein are used as defined in the SERP.
1. Plan Participants. The only Participants of the SERP, as of the date
of this letter, are Richard M. Kelleher and William L. Perocchi. Both such
Participants have elected a lump-sum form of payment pursuant to Section 6(b) of
the SERP. All SERP benefits of Mr. Kelleher and Mr. Perocchi are fully vested
pursuant to the terms of the SERP.
2. Plan Benefit. The effect of a Change of Control on a Participant's
Plan Benefit is to increase his Applicable Percent to 60% of Average
Compensation at the time of retirement, regardless of his age at retirement.
This would apply to Participants retiring prior to attaining the Early
Retirement Date under the SERP (age 55), as well as to Participants retiring on
or after such date.
3. Benefit Commencement. Upon a Change of Control, Plan Benefits are
payable to a Participant at the later of (i) the time of the Change of Control
or (ii) the Participant's retirement. Thus, a Participant who remains employed
following a Change of Control will commence his benefit upon his retirement (or
later date that he may elect through his Normal Retirement Date), based on 60%
of Average Compensation at the time of his retirement.
4. Benefit Amount. The amount of the Plan Benefit payable as a
lump-sum is calculated using the interest rate and mortality assumptions set
forth in Section 6(b) of the SERP. In the case of a Plan Benefit that commences
prior to a Participant's attainment of the Early Retirement Date (age 55), the
amount of such benefit would be discounted to present value at the time of
payment (using the interest rate applicable under Section 6(b) assuming that the
full 60% Plan Benefit would otherwise have been payable at age 55 (and based on
the mortality
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assumption under Section 6(b) applicable to a Participant retiring at such age).
The amount of any SERP benefit that commences on or after attainment of the
Early Retirement Date would not be discounted.
5. Proposed Merger. The consummation of the proposed merger
contemplated by the Agreement and Plan of Merger dated September 1, 1997 among
Doubletree Corporation, Promus Hotel Corporation and Parent Holding Corp., will
constitute a Change of Control for purposes of the SERP.
Sincerely,
/s/ Richard J. Ferris
Richard J. Ferris
Co-Chairman of the Board