Exhibit 10.5

PARK HOTELS & RESORTS INC.

2017 OMNIBUS INCENTIVE PLAN

1. Purpose. The purpose of the Park Hotels & Resorts Inc. 2017 Omnibus Incentive
Plan is to provide a means through which the Company and the other members of
the Company Group may attract and retain key personnel and to provide a means
whereby officers, employees, consultants and advisors of the Company and the
other members of the Company Group can acquire and maintain an equity interest
in the Company, or be paid incentive compensation, including incentive
compensation measured by reference to the value of Common Stock, thereby
strengthening their commitment to the welfare of the Company Group and aligning
their interests with those of the Company’s stockholders.

2. Definitions. The following definitions shall be applicable throughout the
Plan.

(a) “Absolute Share Limit” has the meaning given to such term in Section 5(b) of
the Plan.

(b) “Adjustment Event” has the meaning given to such term in Section 12(a) of
the Plan.

(c) “Affiliate” means any Person that directly or indirectly controls, is
controlled by or is under common control with the Company. The term “control”
(including, with correlative meaning, the terms “controlled by” and “under
common control with”), as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting or other
securities, by contract or otherwise.

(d) “Award” means, individually or collectively, any Incentive Stock Option,
Nonqualified Stock Option, Stock Appreciation Right, Restricted Stock,
Restricted Stock Unit, Other Equity-Based Award, Other Cash-Based Award and
Performance Compensation Award granted under the Plan.

(e) “Award Agreement” means the document or documents by which each Award (other
than an Other Cash-Based Award) is evidenced, which may be in written or
electronic form.

(f) “Board” means the Board of Directors of the Company.

(g) “Cause” means, in the case of a particular Award, unless the applicable
Award Agreement states otherwise, a good faith determination of the Committee or
its designee that (i) there is “cause” to terminate a Participant’s employment
or service, as defined in and in accordance with any employment or consulting
agreement between the Participant and any member of the Company Group or an
Affiliate in effect at the time of such termination or (ii) in the absence of
any such employment or consulting agreement (or the absence of any definition of
“Cause” contained therein), any of the following has occurred with respect to a
Participant: (A) such Participant has failed to reasonably perform his or her
duties to the Service Recipient,

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or has failed to follow the lawful instructions of the Board or his or her
direct superiors, in each case other than as a result of his or her incapacity
due to physical or mental illness or injury, in a manner that could reasonably
be expected to result in harm (whether financially, reputationally or otherwise)
to any member of the Company Group or an Affiliate, following notice by the
Company Group or such Affiliate of such failure; (B) such Participant has
engaged or is about to engage in conduct harmful (whether financially,
reputationally or otherwise) to any member of the Company Group or an Affiliate;
(C) such Participant has been convicted of, or pled guilty or no contest to, a
felony or any crime involving as a material element fraud or dishonesty; (D) the
willful misconduct or gross neglect of such Participant that could reasonably be
expected to result in harm (whether financially, reputationally or otherwise) to
any member of the Company Group or an Affiliate; (E) the willful violation by
such Participant of the written policies of the Service Recipient or any
applicable written policies of any member of the Company Group that could
reasonably be expected to result in harm (whether financially, reputationally or
otherwise) to any member of the Company Group or an Affiliate; (F) such
Participant’s fraud or misappropriation, embezzlement or misuse of funds or
property belonging to the Company Group or an Affiliate (other than good faith
expense account disputes); (G) such Participant’s act of personal dishonesty
which involves personal profit in connection with such Participant’s employment
or service with the Company Group or an Affiliate, or (H) the willful breach by
such Participant of fiduciary duty owed to the Service Recipient.

(h) “Change in Control” means:

(i) the acquisition (whether by purchase, merger, consolidation, combination or
other similar transaction) by any Person of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 30% (on a
fully diluted basis) of either (A) the then outstanding shares of Common Stock,
taking into account as outstanding for this purpose such Common Stock issuable
upon the exercise of options or warrants, the conversion of convertible stock or
debt, and the exercise of any similar right to acquire such Common Stock; or (B)
the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (clauses (A) and
(B), the “Outstanding Company Voting Securities”); provided, however, that for
purposes of this Plan, the following acquisitions shall not constitute a Change
in Control: (I) any acquisition by the Company or any Affiliate; (II) any
acquisition by any employee benefit plan sponsored or maintained by the Company
or any Affiliate; (III) in respect of an Award held by a particular Participant,
any acquisition by the Participant or any group of Persons including the
Participant (or any entity controlled by the Participant or any group of Persons
including the Participant); or (IV) any acquisition in one transaction or a
series of related transactions, by any Person directly from The Blackstone Group
L.P. and/or its Affiliates;

(ii) during any period of twenty-four (24) months, individuals who, at the
beginning of such period, constitute the Board (the “Incumbent Directors”) cease
for any reason to constitute at least a majority of the Board, provided that any
person becoming a director subsequent to the Effective Date, whose election or
nomination for election was approved by a vote of at least two-thirds of the
Incumbent Directors then on the Board (either by a specific vote or by approval
of the proxy statement of the Company in which such person is named as a nominee
for director, without written objection to such

 

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nomination) shall be an Incumbent Director; provided, however, that no
individual initially elected or nominated as a director of the Company as a
result of an actual or threatened election contest, as such terms are used in
Rule 14a-12 of Regulation 14A promulgated under the Exchange Act, with respect
to directors or as a result of any other actual or threatened solicitation of
proxies or consents by or on behalf of any person other than the Board shall be
deemed to be an Incumbent Director;

(iii) the sale, transfer or other disposition of all or substantially all of the
business or assets of the Company Group (taken as a whole) to any Person that is
not an Affiliate of the Company; or

(iv) the consummation of a reorganization, recapitalization, merger,
consolidation, or other similar transaction involving the Company (a “Business
Combination”), unless immediately following such Business Combination, 50% or
more of the total voting power of the entity resulting from such Business
Combination (or, if applicable, the ultimate parent entity that directly or
indirectly has beneficial ownership of sufficient voting securities eligible to
elect a majority of the board of directors (or the analogous governing body) of
such resulting entity) is held by the holders of the Outstanding Company Voting
Securities immediately prior to such Business Combination.

Notwithstanding anything to the contrary in the Plan, the occurrence of any of
clauses (i), (ii), (iii) or (iv), which occurs solely as a result of an Internal
Reorganization as defined in Section 12(c) of the Plan shall not constitute a
Change in Control.

(i) “Code” means the Internal Revenue Code of 1986, as amended, and any
successor thereto. Reference in the Plan to any section of the Code shall be
deemed to include any regulations or other interpretative guidance under such
section, and any amendments or successor provisions to such section, regulations
or guidance.

(j) “Committee” means the Compensation Committee of the Board or any properly
delegated subcommittee thereof or, if no such Compensation Committee or
subcommittee thereof exists, the Board.

(k) “Common Stock” means the common stock of the Company, par value $0.01 per
share (and any stock or other securities into which such Common Stock may be
converted or into which it may be exchanged).

(l) “Company” means Park Hotels & Resorts Inc., a Delaware corporation, and any
successor thereto, including any entity that is a constituent party in any
merger or other combination involving the Company and that survives or succeeds
as a publicly traded entity (including, without limitation, by virtue of a
triangular merger structure) as part of any Internal Reorganization or other
restructuring.

(m) “Company Group” means, collectively, the Company and its Subsidiaries.

(n) “Date of Grant” means the date on which the granting of an Award is
authorized, or such other date as may be specified in such authorization.

 

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(o) “Designated Foreign Subsidiaries” means all members of the Company Group
that are organized under the laws of any jurisdiction or country other than the
United States of America that may be designated by the Board or the Committee
from time to time.

(p) “Detrimental Activity” means any of the following: (i) unauthorized
disclosure of any confidential or proprietary information of any member of the
Company Group; (ii) any activity that would be grounds to terminate the
Participant’s employment or service with the Service Recipient for Cause; or
(iii) a material breach by the Participant of any restrictive covenant by which
such Participant is bound, including, without limitation, any covenant not to
compete or not to solicit, in any agreement with any member of the Company
Group.

(q) “Disability” means, unless in the case of a particular Award the applicable
Award Agreement states otherwise, the Company or an Affiliate having cause to
terminate a Participant’s employment or service on account of “disability,” as
defined in any then-existing employment, consulting or other similar agreement
between the Participant and the Company or an Affiliate or, in the absence of
such an employment, consulting or other similar agreement (or the absence of any
definition of “Disability” contained therein), a condition entitling the
Participant to receive benefits under a long-term disability plan of the Company
or an Affiliate, or, in the absence of such a plan, the complete and permanent
inability by reason of illness or accident to perform the duties of the
occupation at which a Participant was employed or served when such disability
commenced. Any determination of whether Disability exists shall be made by the
Committee (or its designee) in its sole discretion.

(r) “Effective Date” means January 3, 2017.

(s) “Eligible Person” means any (i) individual employed by any member of the
Company Group; provided, however, that no such employee covered by a collective
bargaining agreement shall be an Eligible Person unless and to the extent that
such eligibility is set forth in such collective bargaining agreement or in an
agreement or instrument relating thereto; or (ii) consultant or advisor to any
member of the Company Group who may be offered securities registrable pursuant
to a registration statement on Form S-8 under the Securities Act, who, in the
case of each of clauses (i) and (ii) above has entered into an Award Agreement
or who has received written notification from the Committee or its designee that
they have been selected to participate in the Plan.

(t) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and
any successor thereto. Reference in the Plan to any section of (or rule
promulgated under) the Exchange Act shall be deemed to include any rules,
regulations or other interpretative guidance under such section or rule, and any
amendments or successor provisions to such section, rules, regulations or
guidance.

(u) “Exercise Price” has the meaning given to such term in Section 7(b) of the
Plan.

(v) “Fair Market Value” means, on a given date, (i) if the Common Stock is
listed on a national securities exchange, the closing sales price of the Common
Stock reported on the primary exchange on which the Common Stock is listed and
traded on such date, or, if there are no such sales on that date, then on the
last preceding date on which such sales were reported;

 

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(ii) if the Common Stock is not listed on any national securities exchange but
is quoted in an inter-dealer quotation system on a last sale basis, the average
between the closing bid price and ask price reported on such date, or, if there
is no such sale on that date, then on the last preceding date on which a sale
was reported; or (iii) if the Common Stock is not listed on a national
securities exchange or quoted in an inter-dealer quotation system on a last sale
basis, the amount determined by the Committee in good faith to be the fair
market value of the Common Stock.

(w) “GAAP” has the meaning given to such term in Section 7(d) of the Plan.

(x) “Incentive Stock Option” means an Option which is designated by the
Committee as an incentive stock option as described in Section 422 of the Code
and otherwise meets the requirements set forth in the Plan.

(y) “Indemnifiable Person” has the meaning given to such term in Section 4(e) of
the Plan.

(z) “Minimum Vesting Condition” means, with respect to any Award, that vesting
of (or lapsing of restrictions on) such Award does not occur earlier than the
first anniversary of the Date of Grant (or the date of commencement of
employment or service, in the case of a grant made in connection with a
Participant’s commencement of employment or service), other than (i) in
connection with a Change in Control, or (ii) as a result of a Participant’s
death or Disability.

(aa) “Negative Discretion” means the discretion authorized by the Plan to be
applied by the Committee to eliminate or reduce the size of an Award that is
designated as a Performance Compensation Award consistent with Section 162(m) of
the Code.

(bb) “Nonqualified Stock Option” means an Option which is not designated by the
Committee as an Incentive Stock Option.

(cc) “Option” means an Award granted under Section 7 of the Plan.

(dd) “Option Period” has the meaning given to such term in Section 7(c)(i) of
the Plan.

(ee) “Other Cash-Based Award” means an Award that is not a Stock Appreciation
Right or Restricted Stock Unit granted under Section 10 of the Plan that is
denominated and/or payable in cash.

(ff) “Other Equity-Based Award” means an Award that is not an Option, Stock
Appreciation Right, Restricted Stock, Restricted Stock Unit or Performance
Compensation Award, that is granted under Section 10 of the Plan and is (i)
payable by delivery of Common Stock, and/or (ii) measured by reference to the
value of Common Stock. Other Equity-Based Awards may include (i) operating
partnership or limited liability company units or profits interests, including
LTIP units, with respect to a Subsidiary of the Company and (ii) unrestricted
shares of Common Stock.

 

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(gg) “Participant” means an Eligible Person who has been selected by the
Committee to participate in the Plan and to receive an Award pursuant to the
Plan.

(hh) “Performance Compensation Award” means any Award designated by the
Committee as a Performance Compensation Award pursuant to Section 11 of the
Plan.

(ii) “Performance Criteria” means the criterion or criteria that the Committee
shall select for purposes of establishing the Performance Goals for a
Performance Period with respect to any Performance Compensation Award under the
Plan.

(jj) “Performance Formula” means, for a Performance Period, the one or more
objective formulae applied against the relevant Performance Goal to determine,
with regard to the Performance Compensation Award of a particular Participant,
whether all, some portion but less than all, or none of the Performance
Compensation Award has been earned for the Performance Period.

(kk) “Performance Goals” means, for a Performance Period, the one or more goals
established by the Committee for the Performance Period based upon the
Performance Criteria.

(ll) “Performance Period” means the one or more periods of time of not less than
12 months, as the Committee may select, over which the attainment of one or more
Performance Goals will be measured for the purpose of determining a
Participant’s right to, and the payment of, a Performance Compensation Award.

(mm) “Person” means any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act).

(nn) “Plan” means this Park Hotels & Resorts Inc. 2017 Omnibus Incentive Plan,
as it may be amended and restated from time to time.

(oo) “Qualifying Director” means a person who is (i) with respect to actions
intended to obtain an exemption from Section 16(b) of the Exchange Act pursuant
to Rule 16b-3 under the Exchange Act, a “non-employee director” within the
meaning of Rule 16b-3 under the Exchange Act; and (ii) with respect to actions
intended to obtain the exception for performance-based compensation under 162(m)
of the Code, an “outside director” within the meaning of Section 162(m) of the
Code.

(pp) “Restricted Period” means the period of time determined by the Committee
during which an Award is subject to restrictions, including vesting conditions.

(qq) “Restricted Stock” means Common Stock, subject to certain specified
restrictions (which may include, without limitation, a requirement that the
Participant remain continuously employed or provide continuous services for a
specified period of time), granted under Section 9 of the Plan.

(rr) “Restricted Stock Unit” means an unfunded and unsecured promise to deliver
shares of Common Stock, cash, other securities or other property, subject to
certain restrictions (which may include, without limitation, a requirement that
the Participant remain continuously employed or provide continuous services for
a specified period of time), granted under Section 9 of the Plan.

 

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(ss) “SAR Period” has the meaning given to such term in Section 8(c) of the
Plan.

(tt) “Securities Act” means the Securities Act of 1933, as amended, and any
successor thereto. Reference in the Plan to any section of (or rule promulgated
under) the Securities Act shall be deemed to include any rules, regulations or
other interpretative guidance under such section or rule, and any amendments or
successor provisions to such section, rules, regulations or guidance.

(uu) “Service Recipient” means, with respect to a Participant holding a given
Award, the member of the Company Group by which the original recipient of such
Award is, or following a Termination was most recently, principally employed or
to which such original recipient provides, or following a Termination was most
recently providing, services, as applicable.

(vv) “Stock Appreciation Right” or “SAR” means an Award granted under Section 8
of the Plan.

(ww) “Strike Price” has the meaning given to such term in Section 8(b) of the
Plan.

(xx) “Subsidiary” means, with respect to any specified Person:

(i) any corporation, association or other business entity of which more than 50%
of the total voting power of shares of such entity’s voting securities (without
regard to the occurrence of any contingency and after giving effect to any
voting agreement or stockholders’ agreement that effectively transfers voting
power) is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof); and

(ii) any partnership, limited liability company or any comparable foreign entity
(A) the sole general partner (or functional equivalent thereof) or the managing
general partner (or functional equivalent thereof) of which is such Person or
Subsidiary of such Person or (B) the only general partners (or functional
equivalents thereof) of which are that Person or one or more Subsidiaries of
that Person (or any combination thereof).

(yy) “Substitute Award” has the meaning given to such term in Section 5(e) of
the Plan.

(zz) “Sub-Plans” means any sub-plan to the Plan that has been adopted by the
Board or the Committee for the purpose of permitting the offering of Awards to
employees of certain Designated Foreign Subsidiaries or otherwise outside the
United States of America, with each such sub-plan designed to comply with local
laws applicable to offerings in such foreign jurisdictions. Although any
Sub-Plan may be designated a separate and independent plan from the Plan in
order to comply with applicable local laws, the Absolute Share Limit and the
other limits specified in Section 5(b) shall apply in the aggregate to the Plan
and any Sub-Plan adopted hereunder.

 

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(aaa) “Termination” means the termination of a Participant’s employment or
service, as applicable, with the Service Recipient for any reason (including
death or Disability).

3. Effective Date; Duration. The Plan shall be effective as of the Effective
Date. The expiration date of the Plan, on and after which date no Awards may be
granted hereunder, shall be the tenth (10th) anniversary of the Effective Date;
provided, however, that such expiration shall not affect Awards then
outstanding, and the terms and conditions of the Plan shall continue to apply to
such Awards.

4. Administration.

(a) The Committee shall administer the Plan. To the extent required to comply
with the provisions of Rule 16b-3 promulgated under the Exchange Act (if the
Board is not acting as the Committee under the Plan) or necessary to obtain the
exception for performance-based compensation under Section 162(m) of the Code,
as applicable, it is intended that each member of the Committee shall, at the
time such member takes any action with respect to an Award under the Plan that
is intended to qualify for the exemptions provided by Rule 16b-3 promulgated
under the Exchange Act or to qualify as performance-based compensation under
Section 162(m) of the Code, as applicable, be a Qualifying Director. However,
the fact that a Committee member shall fail to qualify as a Qualifying Director
shall not invalidate any Award granted by the Committee that is otherwise
validly granted under the Plan.

(b) Subject to the provisions of the Plan and applicable law, the Committee
shall have the sole and plenary authority, in addition to other express powers
and authorizations conferred on the Committee by the Plan, to (i) designate
Participants; (ii) determine the type or types of Awards to be granted to a
Participant; (iii) determine the number of shares of Common Stock to be covered
by, or with respect to which payments, rights, or other matters are to be
calculated in connection with, Awards; (iv) determine the terms and conditions
of any Award; (v) determine whether, to what extent, and under what
circumstances Awards may be settled in, or exercised for, cash, shares of Common
Stock, other securities, other Awards or other property, or canceled, forfeited,
or suspended and the method or methods by which Awards may be settled,
exercised, canceled, forfeited, or suspended; (vi) determine whether, to what
extent, and under what circumstances the delivery of cash, shares of Common
Stock, other securities, other Awards or other property and other amounts
payable with respect to an Award shall be deferred either automatically or at
the election of the Participant or of the Committee; (vii) interpret,
administer, reconcile any inconsistency in, correct any defect in and/or supply
any omission in the Plan and any instrument or agreement relating to, or Award
granted under, the Plan; (viii) establish, amend, suspend, or waive any rules
and regulations and appoint such agents as the Committee shall deem appropriate
for the proper administration of the Plan; (ix) adopt Sub-Plans; and (x) make
any other determination and take any other action that the Committee deems
necessary or desirable for the administration of the Plan.

(c) Except to the extent prohibited by applicable law or the applicable rules
and regulations of any securities exchange or inter-dealer quotation system on
which the securities

 

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of the Company are listed or traded, the Committee may allocate all or any
portion of its responsibilities and powers to any one or more of its members and
may delegate all or any part of its responsibilities and powers to any person or
persons selected by it. Any such allocation or delegation may be revoked by the
Committee at any time. Without limiting the generality of the foregoing, the
Committee may delegate to one or more officers of any member of the Company
Group, the authority to act on behalf of the Committee with respect to any
matter, right, obligation, or election which is the responsibility of, or which
is allocated to, the Committee herein, and which may be so delegated as a matter
of law, except with respect to grants of Awards to persons (i) who are subject
to Section 16 of the Exchange Act; or (ii) who are, or could reasonably be
expected to be, “covered employees” for purposes of Section 162(m) of the Code.

(d) Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or with respect to
the Plan, any Award or any Award Agreement shall be within the sole discretion
of the Committee, may be made at any time and shall be final, conclusive and
binding upon all Persons, including, without limitation, any member of the
Company Group, any Participant, any holder or beneficiary of any Award, and any
stockholder of the Company.

(e) No member of the Board, the Committee or any employee or agent of any member
of the Company Group (each such Person, an “Indemnifiable Person”) shall be
liable for any action taken or omitted to be taken or any determination made
with respect to the Plan or any Award hereunder (unless constituting fraud or a
willful criminal act or omission). Each Indemnifiable Person shall be
indemnified and held harmless by the Company against and from any loss, cost,
liability, or expense (including attorneys’ fees) that may be imposed upon or
incurred by such Indemnifiable Person in connection with or resulting from any
action, suit or proceeding to which such Indemnifiable Person may be a party or
in which such Indemnifiable Person may be involved by reason of any action taken
or omitted to be taken or determination made with respect to the Plan or any
Award hereunder and against and from any and all amounts paid by such
Indemnifiable Person with the Company’s approval, in settlement thereof, or paid
by such Indemnifiable Person in satisfaction of any judgment in any such action,
suit or proceeding against such Indemnifiable Person, and the Company shall
advance to such Indemnifiable Person any such expenses promptly upon written
request (which request shall include an undertaking by the Indemnifiable Person
to repay the amount of such advance if it shall ultimately be determined, as
provided below, that the Indemnifiable Person is not entitled to be
indemnified); provided, that the Company shall have the right, at its own
expense, to assume and defend any such action, suit or proceeding and once the
Company gives notice of its intent to assume the defense, the Company shall have
sole control over such defense with counsel of the Company’s choice. The
foregoing right of indemnification shall not be available to an Indemnifiable
Person to the extent that a final judgment or other final adjudication (in
either case not subject to further appeal) binding upon such Indemnifiable
Person determines that the acts, omissions or determinations of such
Indemnifiable Person giving rise to the indemnification claim resulted from such
Indemnifiable Person’s fraud or willful criminal act or omission or that such
right of indemnification is otherwise prohibited by law or by the organizational
documents of any member of the Company Group. The foregoing right of
indemnification shall not be exclusive of or otherwise supersede any other
rights of indemnification to which such Indemnifiable Persons may be entitled
under the organizational

 

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documents of any member of the Company Group, as a matter of law, under an
individual indemnification agreement or contract or otherwise, or any other
power that the Company may have to indemnify such Indemnifiable Persons or hold
such Indemnifiable Persons harmless.

(f) Notwithstanding anything to the contrary contained in the Plan, the Board
may, in its sole discretion, at any time and from time to time, grant Awards and
administer the Plan with respect to such Awards. Any such actions by the Board
shall be subject to the applicable rules of the securities exchange or
inter-dealer quotation system on which the Common Stock is listed or quoted. In
any such case, the Board shall have all the authority granted to the Committee
under the Plan.

5. Grant of Awards; Shares Subject to the Plan; Limitations.

(a) The Committee may, from time to time, grant Awards to one or more Eligible
Persons.

(b) Awards granted under the Plan shall be subject to the following
limitations: (i) subject to Section 12 of the Plan, no more than 8,000,000
shares of Common Stock (the “Absolute Share Limit”) shall be available for
Awards under the Plan; (ii) subject to Section 12 of the Plan, grants of Options
or SARs under the Plan in respect of no more than 1,500,000 shares of Common
Stock may be made to any individual Participant during any single fiscal year of
the Company (for this purpose, if a SAR is granted in tandem with an Option
(such that the SAR expires with respect to the number of shares of Common Stock
for which the Option is exercised), only the shares underlying the Option shall
count against this limitation); (iii) subject to Section 12 of the Plan, no more
than the number of shares of Common Stock equal to the Absolute Share Limit may
be issued in the aggregate pursuant to the exercise of Incentive Stock Options
granted under the Plan; (iv) subject to Section 12 of the Plan, no more than
1,500,000 shares of Common Stock may be issued in respect of Performance
Compensation Awards denominated in shares of Common Stock granted pursuant to
Section 11 of the Plan to any individual Participant for a single fiscal year
during a Performance Period (or with respect to each single fiscal year in the
event a Performance Period extends beyond a single fiscal year), or in the event
such share-denominated Performance Compensation Award is paid in cash, other
securities, other Awards or other property, no more than the Fair Market Value
of such shares of Common Stock on the last day of the Performance Period to
which such Award relates; (v) the maximum amount that can be paid to any
individual Participant for a single fiscal year during a Performance Period (or
with respect to each single fiscal year in the event a Performance Period
extends beyond a single fiscal year) pursuant to a Performance Compensation
Award denominated in cash (described in Section 11(a) of the Plan) shall be
$10,000,000; and (vi) no more than 400,000 shares of Common Stock may be granted
pursuant to Awards which do not satisfy the Minimum Vesting Condition (the
“Minimum Vesting Condition Limit”).

(c) Other than with respect to Substitute Awards, to the extent that an Award
expires or is canceled, forfeited or terminated without issuance to the
Participant of the full number of shares of Common Stock to which the Award
related, the unissued shares will again be available for grant under the Plan.
Shares of Common Stock shall be deemed to have been issued in settlement of
Awards if the Fair Market Value equivalent of such shares is paid in cash;
provided, however, that no shares shall be deemed to have been issued in
settlement of a

 

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SAR or Restricted Stock Unit that only provides for settlement in cash and
settles only in cash or in respect of any Other Cash-Based Award. In no event
shall (i) shares tendered or withheld on the exercise of Options or other Award
for the payment of the exercise or purchase price or withholding taxes, (ii)
shares not issued upon the settlement of a SAR that settles in shares of Common
Stock (or could settle in shares of Common Stock), or (iii) shares purchased on
the open market with cash proceeds from the exercise of Options, again become
available for other Awards under the Plan.

(d) Shares of Common Stock issued by the Company in settlement of Awards may be
authorized and unissued shares, shares held in the treasury of the Company,
shares purchased on the open market or by private purchase or a combination of
the foregoing.

(e) Awards may, in the sole discretion of the Committee, be granted under the
Plan in assumption of, or in substitution for, outstanding awards previously
granted by an entity directly or indirectly acquired by the Company or with
which the Company combines (“Substitute Awards”). Substitute Awards shall not be
counted against the Absolute Share Limit or the Minimum Vesting Condition Limit;
provided, that Substitute Awards issued in connection with the assumption of, or
in substitution for, outstanding options intended to qualify as “incentive stock
options” within the meaning of Section 422 of the Code shall be counted against
the aggregate number of shares of Common Stock available for Awards of Incentive
Stock Options under the Plan. Subject to applicable stock exchange requirements,
available shares under a stockholder-approved plan of an entity directly or
indirectly acquired by the Company or with which the Company combines (as
appropriately adjusted to reflect the acquisition or combination transaction)
may be used for Awards under the Plan and shall not reduce the number of shares
of Common Stock available for issuance under the Plan. Shares of Common Stock
subject to Awards granted to Participants in connection with the adoption of the
Plan or in substitution for awards of Hilton Worldwide Holdings, Inc. shall not
be counted against the Minimum Vesting Condition Limit.

6. Eligibility. Participation in the Plan shall be limited to Eligible Persons.

7. Options.

(a) General. Each Option granted under the Plan shall be evidenced by an Award
Agreement, which agreement need not be the same for each Participant. Each
Option so granted shall be subject to the conditions set forth in this Section
7, and to such other conditions not inconsistent with the Plan as may be
reflected in the applicable Award Agreement. All Options granted under the Plan
shall be Nonqualified Stock Options unless the applicable Award Agreement
expressly states that the Option is intended to be an Incentive Stock Option.
Incentive Stock Options shall be granted only to Eligible Persons who are
employees of a member of the Company Group, and no Incentive Stock Option shall
be granted to any Eligible Person who is ineligible to receive an Incentive
Stock Option under the Code. No Option shall be treated as an Incentive Stock
Option unless the Plan has been approved by the stockholders of the Company in a
manner intended to comply with the stockholder approval requirements of Section
422(b)(1) of the Code, provided that any Option intended to be an Incentive
Stock Option shall not fail to be effective solely on account of a failure to
obtain such approval, but rather such Option shall be treated as a Nonqualified
Stock Option unless and until such

 

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approval is obtained. In the case of an Incentive Stock Option, the terms and
conditions of such grant shall be subject to, and comply with, such rules as may
be prescribed by Section 422 of the Code. If for any reason an Option intended
to be an Incentive Stock Option (or any portion thereof) shall not qualify as an
Incentive Stock Option, then, to the extent of such nonqualification, such
Option or portion thereof shall be regarded as a Nonqualified Stock Option
appropriately granted under the Plan.

(b) Exercise Price. Except as otherwise provided by the Committee in the case of
Substitute Awards, the exercise price (“Exercise Price”) per share of Common
Stock for each Option shall not be less than 100% of the Fair Market Value of
such share (determined as of the Date of Grant); provided, however, that in the
case of an Incentive Stock Option granted to an employee who, at the time of the
grant of such Option, owns stock representing more than 10% of the voting power
of all classes of stock of any member of the Company Group, the Exercise Price
per share shall be no less than 110% of the Fair Market Value per share on the
Date of Grant.

(c) Vesting and Expiration; Termination.

(i) Options shall vest and become exercisable in such manner and on such date or
dates or upon such event or events as determined by the Committee. Grants of
Options that are settled in shares of Common Stock shall comply with the Minimum
Vesting Condition; provided that the Minimum Vesting Condition need not be
applied to such grants that, when taken together with other Awards not subject
to the Minimum Vesting Condition, comprise Awards with respect to a number of
shares of Common Stock that does not exceed, in the aggregate, the Minimum
Vesting Condition Limit. Options shall expire upon a date determined by the
Committee, not to exceed ten (10) years from the Date of Grant (the “Option
Period”). Notwithstanding the foregoing, in no event shall the Option Period
exceed five (5) years from the Date of Grant in the case of an Incentive Stock
Option granted to a Participant who on the Date of Grant owns stock representing
more than 10% of the voting power of all classes of stock of any member of the
Company Group.

(ii) Unless otherwise provided by the Committee, whether in an Award Agreement
or otherwise, in the event of (A) a Participant’s Termination by the Service
Recipient other than for Cause; or (B) a Participant’s Termination by the
Service Recipient due to death or Disability, in each case within 12 months
following a Change in Control, each outstanding Option granted to such
Participant shall become fully vested and immediately exercisable as of the date
of such Termination; provided, that in the event the vesting or exercisability
of any Option would otherwise be subject to the achievement of performance
conditions, the portion of any such Option that shall become fully vested and
immediately exercisable shall be based on (x) actual performance through the
date of Termination as determined by the Committee, or (y) if the Committee
determines that measurement of actual performance cannot be reasonably assessed,
the assumed achievement of target performance as determined by the Committee, in
each case prorated based on the time elapsed from the date of grant to the date
of Termination.

 

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(iii) Unless otherwise provided by the Committee, whether in an Award Agreement
or otherwise, in the event of (A) a Participant’s Termination by the Service
Recipient for Cause, all outstanding Options granted to such Participant shall
immediately terminate and expire; (B) a Participant’s Termination due to death
or Disability, after taking into account any accelerated vesting under the above
clause (ii), each outstanding unvested Option granted to such Participant shall
immediately terminate and expire, and each outstanding vested Option shall
remain exercisable for one (1) year thereafter (but in no event beyond the
expiration of the Option Period); and (C) a Participant’s Termination for any
other reason each outstanding unvested Option granted to such Participant shall
immediately terminate and expire, and each outstanding vested Option shall
remain exercisable for ninety (90) days thereafter (but in no event beyond the
expiration of the Option Period).

(d) Method of Exercise and Form of Payment. No shares of Common Stock shall be
issued pursuant to any exercise of an Option until payment in full of the
Exercise Price therefor is received by the Company and the Participant has paid
to the Company an amount equal to any Federal, state, local and non-U.S. income,
employment and any other applicable taxes required to be withheld. Options which
have become exercisable may be exercised by delivery of written or electronic
notice of exercise to the Company (or telephonic instructions to the extent
provided by the Committee) in accordance with the terms of the Option
accompanied by payment of the Exercise Price. The Exercise Price shall be
payable: (i) in cash, check, cash equivalent and/or shares of Common Stock
valued at the Fair Market Value at the time the Option is exercised (including,
pursuant to procedures approved by the Committee, by means of attestation of
ownership of a sufficient number of shares of Common Stock in lieu of actual
issuance of such shares to the Company); provided, that such shares of Common
Stock are not subject to any pledge or other security interest and have been
held by the Participant for any period of time as established from time to time
by the Committee in order to avoid adverse accounting treatment applying
generally accepted accounting principles (“GAAP”); or (ii) by such other method
as the Committee may permit, in its sole discretion, including, without
limitation (A) in other property having a fair market value on the date of
exercise equal to the Exercise Price; (B) if there is a public market for the
shares of Common Stock at such time, by means of a broker-assisted “cashless
exercise” pursuant to which the Company is delivered (including telephonically
to the extent permitted by the Committee) a copy of irrevocable instructions to
a stockbroker to sell the shares of Common Stock otherwise issuable upon the
exercise of the Option and to deliver promptly to the Company an amount equal to
the Exercise Price; or (C) a “net exercise” procedure effected by withholding
the minimum number of shares of Common Stock otherwise issuable in respect of an
Option that are needed to pay the Exercise Price. Any fractional shares of
Common Stock shall be settled in cash.

(e) Notification upon Disqualifying Disposition of an Incentive Stock Option.
Each Participant awarded an Incentive Stock Option under the Plan shall notify
the Company in writing immediately after the date the Participant makes a
disqualifying disposition of any Common Stock acquired pursuant to the exercise
of such Incentive Stock Option. A disqualifying disposition is any disposition
(including, without limitation, any sale) of such Common Stock before the later
of (i) the date that is two (2) years after the Date of Grant of the Incentive
Stock Option, or (ii) the date that is one (1) year after the date of exercise
of the Incentive Stock Option. The Company may, if determined by the Committee
and in accordance

 

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with procedures established by the Committee, retain possession, as agent for
the applicable Participant, of any Common Stock acquired pursuant to the
exercise of an Incentive Stock Option until the end of the period described in
the preceding sentence, subject to complying with any instructions from such
Participant as to the sale of such Common Stock.

(f) Compliance With Laws, etc. Notwithstanding the foregoing, in no event shall
a Participant be permitted to exercise an Option in a manner which the Committee
determines would violate the Sarbanes-Oxley Act of 2002, as it may be amended
from time to time, or any other applicable law or the applicable rules and
regulations of the Securities and Exchange Commission or the applicable rules
and regulations of any securities exchange or inter-dealer quotation system on
which the securities of the Company are listed or traded.

8. Stock Appreciation Rights.

(a) General. Each SAR granted under the Plan shall be evidenced by an Award
Agreement. Each SAR so granted shall be subject to the conditions set forth in
this Section 8, and to such other conditions not inconsistent with the Plan as
may be reflected in the applicable Award Agreement. Any Option granted under the
Plan may include tandem SARs. The Committee also may award SARs to Eligible
Persons independent of any Option.

(b) Strike Price. Except as otherwise provided by the Committee in the case of
Substitute Awards, the strike price (“Strike Price”) per share of Common Stock
for each SAR shall not be less than 100% of the Fair Market Value of such share
(determined as of the Date of Grant). Notwithstanding the foregoing, a SAR
granted in tandem with (or in substitution for) an Option previously granted
shall have a Strike Price equal to the Exercise Price of the corresponding
Option.

(c) Vesting and Expiration; Termination.

(i) A SAR granted in connection with an Option shall become exercisable and
shall expire according to the same vesting schedule and expiration provisions as
the corresponding Option. A SAR granted independent of an Option shall vest and
become exercisable in such manner and on such date or dates or upon such event
or events as determined by the Committee. Grants of SARs that are settled in
shares of Common Stock shall comply with the Minimum Vesting Condition; provided
that the Minimum Vesting Condition need not be applied to such grants that, when
taken together with other Awards not subject to the Minimum Vesting Condition,
comprise Awards with respect to a number of shares of Common Stock that does not
exceed, in the aggregate, the Minimum Vesting Condition Limit. SARs shall expire
upon a date determined by the Committee, not to exceed ten (10) years from the
Date of Grant (the “SAR Period”).

(ii) Unless otherwise provided by the Committee, whether in an Award Agreement
or otherwise, in the event of (A) a Participant’s Termination by the Service
Recipient other than for Cause; or (B) a Participant’s Termination by the
Service Recipient due to death or Disability, in each case within 12 months
following a Change in Control, outstanding SARs granted to such Participant
shall become fully vested and immediately exercisable as of the date of such
Termination; provided, that in the event

 

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the vesting or exercisability of any SARs would otherwise be subject to the
achievement of performance conditions, the portion of any such SAR that shall
become fully vested and immediately exercisable shall be based on (x) actual
performance through the date of termination as determined by the Committee, or
(y) if the Committee determines that measurement of actual performance cannot be
reasonably assessed, the assumed achievement of target performance as determined
by the Committee, in each case prorated based on the time elapsed from the date
of grant to the date of Termination.

(iii) Unless otherwise provided by the Committee, whether in an Award Agreement
or otherwise, in the event of (A) a Participant’s Termination by the Service
Recipient for Cause, all outstanding SARs granted to such Participant shall
immediately terminate and expire; (B) a Participant’s Termination due to death
or Disability, after taking into account any accelerated vesting under the above
clause (ii), each outstanding unvested SAR granted to such Participant shall
immediately terminate and expire, and each outstanding vested SAR shall remain
exercisable for one (1) year thereafter (but in no event beyond the expiration
of the SAR Period); and (C) a Participant’s Termination for any other reason,
each outstanding unvested SAR granted to such Participant shall immediately
terminate and expire, and each outstanding vested SAR shall remain exercisable
for ninety (90) days thereafter (but in no event beyond the expiration of the
SAR Period).

(d) Method of Exercise. SARs which have become exercisable may be exercised by
delivery of written or electronic notice of exercise to the Company in
accordance with the terms of the Award, specifying the number of SARs to be
exercised and the date on which such SARs were awarded.

(e) Payment. Upon the exercise of a SAR, the Company shall pay to the
Participant an amount equal to the number of shares subject to the SAR that is
being exercised multiplied by the excess of the Fair Market Value of one (1)
share of Common Stock on the exercise date over the Strike Price, less an amount
equal to any Federal, state, local and non-U.S. income, employment and any other
applicable taxes required to be withheld. The Company shall pay such amount in
cash, in shares of Common Stock valued at Fair Market Value, or any combination
thereof, as determined by the Committee. Any fractional shares of Common Stock
shall be settled in cash.

9. Restricted Stock and Restricted Stock Units.

(a) General. Each grant of Restricted Stock and Restricted Stock Units shall be
evidenced by an Award Agreement. Each Restricted Stock and Restricted Stock Unit
so granted shall be subject to the conditions set forth in this Section 9, and
to such other conditions not inconsistent with the Plan as may be reflected in
the applicable Award Agreement.

(b) Stock Certificates and Book-Entry; Escrow or Similar Arrangement. Upon the
grant of Restricted Stock, the Committee shall cause a stock certificate
registered in the name of the Participant to be issued or shall cause share(s)
of Common Stock to be registered in the name of the Participant and held in
book-entry form subject to the Company’s directions and, if the Committee
determines that the Restricted Stock shall be held by the Company or in escrow

 

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rather than issued to the Participant pending the release of the applicable
restrictions, the Committee may require the Participant to additionally execute
and deliver to the Company (i) an escrow agreement satisfactory to the
Committee, if applicable; and (ii) the appropriate stock power (endorsed in
blank) with respect to the Restricted Stock covered by such agreement. If a
Participant shall fail to execute and deliver (in a manner permitted under
Section 14(a) of the Plan or as otherwise determined by the Committee) an
agreement evidencing an Award of Restricted Stock and, if applicable, an escrow
agreement and blank stock power within the amount of time specified by the
Committee, the Award shall be null and void. Subject to the restrictions set
forth in this Section 9 and the applicable Award Agreement, a Participant
generally shall have the rights and privileges of a stockholder as to shares of
Restricted Stock, including, without limitation, the right to vote such
Restricted Stock; provided, that if the lapsing of restrictions with respect to
any grant of Restricted Stock is contingent on satisfaction of performance
conditions (other than, or in addition to, the passage of time), any dividends
payable on such shares of Restricted Stock shall be held by the Company and
delivered (without interest) to the Participant within fifteen (15) days
following the date on which the restrictions on such Restricted Stock lapse (and
the right to any such accumulated dividends shall be forfeited upon the
forfeiture of the Restricted Stock to which such dividends relate). To the
extent shares of Restricted Stock are forfeited, any stock certificates issued
to the Participant evidencing such shares shall be returned to the Company, and
all rights of the Participant to such shares and as a stockholder with respect
thereto shall terminate without further obligation on the part of the Company. A
Participant shall have no rights or privileges as a stockholder as to Restricted
Stock Units.

(c) Vesting; Termination.

(i) Subject to the Minimum Vesting Condition, Restricted Stock and Restricted
Stock Units shall vest, and any applicable Restricted Period shall lapse, in
such manner and on such date or dates or upon such event or events as determined
by the Committee. Grants of Restricted Stock and Restricted Stock Units that are
settled in shares of Common Stock shall comply with the Minimum Vesting
Condition; provided that the Minimum Vesting Condition need not be applied to
such grants that, when taken together with other Awards not subject to the
Minimum Vesting Condition, comprise Awards with respect to a number of shares of
Common Stock that does not exceed, in the aggregate, the Minimum Vesting
Condition Limit.

(ii) Unless otherwise provided by the Committee, whether in an Award Agreement
or otherwise, in the event of (A) a Participant’s Termination by the Company
other than for Cause, or (B) a Participant’s Termination due to death or
Disability, in each case within 12 months following a Change in Control,
outstanding Restricted Stock and Restricted Stock Units granted to such
Participant shall become fully vested and the restrictions thereon shall
immediately lapse as of the date of such Termination; provided, that in the
event the vesting or lapse of restrictions of any Restricted Stock or Restricted
Stock Units would otherwise be subject to the achievement of performance
conditions, the portion of any such Restricted Stock or Restricted Stock Units
that shall become fully vested and free from such restrictions shall be based on
(x) actual performance through the date of termination as determined by the
Committee, or (y) if the Committee determines that measurement of actual
performance cannot be reasonably assessed, the assumed achievement of target
performance as determined by the Committee, in each case prorated based on the
time elapsed from the date of grant to the date of Termination.

 

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(d) Issuance of Restricted Stock and Settlement of Restricted Stock Units.

(i) Upon the expiration of the Restricted Period with respect to any shares of
Restricted Stock, the restrictions set forth in the applicable Award Agreement
shall be of no further force or effect with respect to such shares, except as
set forth in the applicable Award Agreement. If an escrow arrangement is used,
upon such expiration, the Company shall issue to the Participant, or the
Participant’s beneficiary, without charge, the stock certificate (or, if
applicable, a notice evidencing a book-entry notation) evidencing the shares of
Restricted Stock which have not then been forfeited and with respect to which
the Restricted Period has expired (rounded down to the nearest full
share). Dividends, if any, that may have been withheld by the Committee and
attributable to any particular share of Restricted Stock shall be distributed to
the Participant in cash or, in the sole discretion of the Committee, in shares
of Common Stock having a Fair Market Value (on the date of distribution) equal
to the amount of such dividends, upon the release of restrictions on such share
and, if such share is forfeited, the Participant shall have no right to such
dividends.

(ii) Unless otherwise provided by the Committee in an Award Agreement or
otherwise, upon the expiration of the Restricted Period with respect to any
outstanding Restricted Stock Units, the Company shall issue to the Participant
or the Participant’s beneficiary, without charge, one (1) share of Common Stock
(or other securities or other property, as applicable) for each such outstanding
Restricted Stock Unit; provided, however, that the Committee may, in its sole
discretion, elect to (A) pay cash or part cash and part shares of Common Stock
in lieu of issuing only shares of Common Stock in respect of such Restricted
Stock Units; or (B) defer the issuance of shares of Common Stock (or cash or
part cash and part shares of Common Stock, as the case may be) beyond the
expiration of the Restricted Period if such extension would not cause adverse
tax consequences under Section 409A of the Code. If a cash payment is made in
lieu of issuing shares of Common Stock in respect of such Restricted Stock
Units, the amount of such payment shall be equal to the Fair Market Value per
share of the Common Stock as of the date on which the Restricted Period lapsed
with respect to such Restricted Stock Units. Except as otherwise provided in an
Award Agreement or by the Committee, in its sole discretion, upon the payment by
the Company of dividends on shares of Common Stock, the holder of outstanding
Restricted Stock Units shall be entitled to be credited with dividend equivalent
payments in cash (unless, the Committee, in its sole discretion, elects to
credit such payments in shares of Common Stock having a Fair Market Value equal
to the amount of such dividend), which payments shall be made to the holder on a
current basis within fifteen (15) days following the date on which the
corresponding dividend is paid to the Company’s stockholders; provided, that if
the lapsing of restrictions with respect to any grant of Restricted Stock Units
is contingent on satisfaction of performance conditions (other than, or in
addition to, the passage of time), any dividend equivalents payable on such
Restricted Stock Units shall be held by the Company and shall be payable
(without interest) at the same time as the underlying Restricted Stock Units are
settled following the date on which the Restricted Period lapses with respect to
such Restricted Stock Units, and, if such Restricted Stock Units are forfeited,
the Participant shall have no right to such dividend equivalent payments.

 

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(e) Legends on Restricted Stock. Each certificate, if any, or book entry
representing Restricted Stock awarded under the Plan, if any, shall bear a
legend or book entry notation substantially in the form of the following, in
addition to any other information the Company deems appropriate, until the lapse
of all restrictions with respect to such shares of Common Stock:

TRANSFER OF THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY IS RESTRICTED
PURSUANT TO THE TERMS OF THE PARK HOTELS & RESORTS INC. 2017 OMNIBUS INCENTIVE
PLAN AND A RESTRICTED STOCK AWARD AGREEMENT BETWEEN PARK HOTELS & RESORTS INC.
AND PARTICIPANT. A COPY OF SUCH PLAN AND AWARD AGREEMENT IS ON FILE AT THE
PRINCIPAL EXECUTIVE OFFICES OF PARK HOTELS & RESORTS INC.

10. Other Equity-Based Awards and Other Cash-Based Awards. The Committee may
grant Other Equity-Based Awards and Other Cash-Based Awards under the Plan to
Eligible Persons, alone or in tandem with other Awards, in such amounts and
dependent on such conditions as the Committee shall from time to time in its
sole discretion determine. Each Other Equity-Based Award granted under the Plan
shall be evidenced by an Award Agreement, and each Other Cash-Based Award
granted under the Plan shall be evidenced in such form as the Committee may
determine from time to time. Each Other Equity-Based Award or Other Cash-Based
Award, as applicable, so granted shall be subject to such conditions not
inconsistent with the Plan as may be reflected in the applicable Award Agreement
or other form evidencing such Award, including, without limitation, those set
forth in Section 14(a) of the Plan. Grants of Other Equity-Based Awards that are
settled in shares of Common Stock shall comply with the Minimum Vesting
Condition; provided that the Minimum Vesting Condition need not be applied to
such grants that, when taken together with other Awards not subject to the
Minimum Vesting Condition, comprise Awards with respect to a number of shares of
Common Stock that does not exceed the Minimum Vesting Condition Limit. Grants of
Other Equity-Based Awards that are operating partnership or limited liability
company units or profits interests or other equity interests in an operating
partnership or limited liability company Subsidiary of the Company (a) may be
granted for Service to such operating partnership or limited liability company
Subsidiary (or a Subsidiary thereof) and (b) shall have the rights and features
of which, if applicable, will be set forth in an operating partnership or
limited liability company agreement and an applicable Award Agreement.

11. Performance Compensation Awards.

(a) General. The Committee shall have the authority, at or before the time of
grant of any Award, to designate such Award as a Performance Compensation Award
intended to qualify as “performance-based compensation” under Section 162(m) of
the Code. Notwithstanding anything in the Plan to the contrary, if the Company
determines that a Participant who has been granted an Award designated as a
Performance Compensation Award is not (or is no longer) a “covered employee”
(within the meaning of Section 162(m) of the

 

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Code), the terms and conditions of such Award may be modified without regard to
any restrictions or limitations set forth in this Section 11 (but subject
otherwise to the provisions of Section 13 of the Plan).

(b) Discretion of Committee with Respect to Performance Compensation Awards.
With regard to a particular Performance Period, the Committee shall have sole
discretion to select the length of such Performance Period, the type(s) of
Performance Compensation Awards to be issued, the Performance Criteria that will
be used to establish the Performance Goal(s), the kind(s) and/or level(s) of the
Performance Goal(s) that is (are) to apply and the Performance
Formula(e). Within the first ninety (90) days of a Performance Period (or,
within any other maximum period allowed under Section 162(m) of the Code), the
Committee shall, with regard to the Performance Compensation Awards to be issued
for such Performance Period, exercise its discretion with respect to each of the
matters enumerated in the immediately preceding sentence and record the same in
writing.

(c) Performance Criteria. The Performance Criteria that will be used to
establish the Performance Goal(s) may be based on the attainment of specific
levels of performance of the Company (and/or one or more members of the Company
Group, divisions or operational and/or business units, product lines, brands,
business segments, administrative departments, or any combination of the
foregoing) and shall be limited to the following, which may be determined in
accordance with GAAP or on a non-GAAP basis: (i) net earnings or net income
(before or after taxes); (ii) basic or diluted earnings per share (before or
after taxes); (iii) net revenue or net revenue growth; (iv) gross revenue or
gross revenue growth, gross profit or gross profit growth; (v) net operating
profit (before or after taxes); (vi) return measures (including, but not limited
to, return on investment, assets, capital, employed capital, invested capital,
equity, revenue or sales); (vii) cash flow measures (including, but not limited
to, operating cash flow, free cash flow, cash flow return on equity, and cash
flow return on investment), which may but are not required to be measured on a
per share basis; (viii) total capital invested in assets; (ix) earnings before
or after interest, taxes, depreciation and/or amortization (including EBIT,
EBITDA and adjusted, core, or hotel EBITDA); (x) earnings as a percentage of
average capital, earnings as a multiple of interest expense, or business unit
economic earnings; (xi) funds from operations (as determined by NAREIT or
otherwise), adjusted or core funds from operations, funds available for
distribution, adjusted or core funds available for distribution, cash available
for distribution, or adjusted or core cash available for distribution; (xii)
asset acquisition or disposition volume; (xiii) gross or net operating margins
(including EBITDA and adjusted, core, or hotel EBITDA margins); (xiv)
productivity ratios; (xv) share price (including, but not limited to, growth
measures and total stockholder return); (xvi) expense targets or cost reduction
goals, general and administrative expense savings; (xvii) operating efficiency
or productivity; (xviii) objective measures of customer satisfaction; (xix)
working capital targets; (xx) measures of economic value added or other ‘value
creation’ metrics; (xxi) enterprise value; (xxii) sales; (xxiii) stockholder
return; (xxiv) competitive market metrics; (xxv) employee retention; (xxvi)
timely opening of new facilities; (xxvii) hotel occupancy rates; (xxviii)
objective measures of personal targets, goals or completion of projects
(including but not limited to succession and hiring projects, completion of
specific acquisitions, dispositions, reorganizations or other corporate
transactions or capital-raising transactions, expansions of specific business
operations and meeting divisional or project budgets); (xxix) revenues; (xxx)
revenues under management; (xxxi) comparisons of continuing operations to other
operations; (xxxii) market share or

 

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penetration; (xxxiii) cost of capital, debt leverage (including net debt to
EBITDA or adjusted or core EBITDA), year-end cash position or book value;
(xxxiv) strategic objectives; (xxxv) international operations; (xxxvi) capital
expenditures; (xxxvii) RevPAR (revenue per available room); (xxxviii) RevPAR
penetration ratios; (xxxix) financial ratios as provided in credit agreements of
the Company and/or a member of the Company Group; or (xxxx) any combination of
the foregoing. Any one or more of the Performance Criteria may be stated as a
percentage of another Performance Criteria, or used on an absolute or relative
basis to measure the performance of the Company and/or one or more members of
the Company Group as a whole or any assets, divisions or operational and/or
business units, product lines, brands, business segments or administrative
departments of the Company and/or one or more members of the Company Group or
any combination thereof, as the Committee may deem appropriate, or any of the
above Performance Criteria may be compared to the performance of a selected
group of comparison companies, or a published or special index that the
Committee, in its sole discretion, deems appropriate, or as compared to various
stock market indices. Without limiting the foregoing, any one or more of the
Performance Criteria may also be calculated on a same store, per share or
relative-to-peers basis. The Committee also has the authority to provide for
accelerated vesting of any Award based on the achievement of Performance Goals
pursuant to the Performance Criteria specified in this paragraph. To the extent
required under Section 162(m) of the Code, the Committee shall, within the first
ninety (90) days of a Performance Period (or, within any other maximum period
allowed under Section 162(m) of the Code), define in an objective fashion the
manner of calculating the Performance Criteria it selects to use for such
Performance Period.

(d) Modification of Performance Goal(s). In the event that applicable tax and/or
securities laws change to permit Committee discretion to alter the governing
Performance Criteria without obtaining stockholder approval of such alterations,
the Committee shall have sole discretion to make such alterations without
obtaining stockholder approval. Unless otherwise determined by the Committee at
the time a Performance Compensation Award is granted, the Committee shall,
during the first ninety (90) days of a Performance Period (or, within any other
maximum period allowed under Section 162(m) of the Code), or at any time
thereafter to the extent the exercise of such authority at such time would not
cause the Performance Compensation Awards granted to any Participant for such
Performance Period to fail to qualify as “performance-based compensation” under
Section 162(m) of the Code, specify adjustments or modifications to be made to
the calculation of a Performance Goal for such Performance Period, based on and
in order to appropriately reflect the following events: (i) asset write-downs;
(ii) litigation or claim judgments or settlements; (iii) the effect of changes
in tax laws, accounting principles, or other laws or regulatory rules affecting
reported results; (iv) any reorganization and restructuring programs; (v)
acquisitions or divestitures; (vi) any other specific, unusual or nonrecurring
events, or objectively determinable category thereof; (vii) foreign exchange
gains and losses or fluctuation in currency exchange rates; (viii) discontinued
operations and nonrecurring charges; (ix) a change in the Company’s fiscal year;
(x) accruals for payments to be made in respect of the Plan or other specific
compensation arrangements; and (xi) any other event described in Section 12.

 

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(e) Payment of Performance Compensation Awards.

(i) Condition to Receipt of Payment. Unless otherwise provided in the applicable
Award Agreement or otherwise determined by the Committee, a Participant must be
employed by the Company on the last day of a Performance Period to be eligible
for payment in respect of a Performance Compensation Award for such Performance
Period.

(ii) Limitation. Unless otherwise provided in the applicable Award Agreement or
otherwise determined by the Committee, a Participant shall be eligible to
receive payment in respect of a Performance Compensation Award only to the
extent that (A) the Performance Goals for such period are achieved, and (B) all
or some portion of such Participant’s Performance Compensation Award has been
earned for the Performance Period based on the application of the Performance
Formula to such achieved Performance Goals; provided, however, that in the event
of (x) a Participant’s Termination by the Company other than for Cause, or (y) a
Participant’s Termination due to death or Disability, in each case, within
twelve (12) months following a Change in Control, the Participant shall receive
payment in respect of a Performance Compensation Award based on (1) actual
performance through the date of Termination as determined by the Committee, or
(2) if the Committee determines that measurement of actual performance cannot be
reasonably assessed, the assumed achievement of target performance as determined
by the Committee (but not to the extent that application of this clause (2)
would cause Section 162(m) of the Code to result in the loss of the deduction of
the compensation payable in respect of such Performance Compensation Award for
any Participant reasonably expected to be a “covered employee” within the
meaning of Section 162(m) of the Code), in each case, prorated based on the time
elapsed from the Date of Grant to the date of Termination.

(iii) Certification. Following the completion of a Performance Period, the
Committee shall review and certify in writing whether, and to what extent, the
Performance Goals for the Performance Period have been achieved and, if so,
calculate and certify in writing that amount of the Performance Compensation
Awards earned for the period based upon the Performance Formula. The Committee
shall then determine the amount of each Participant’s Performance Compensation
Award actually payable for the Performance Period and, in so doing, may apply
Negative Discretion.

(iv) Use of Negative Discretion. In determining the actual amount of an
individual Participant’s Performance Compensation Award for a Performance
Period, the Committee may reduce or eliminate the amount of such Performance
Compensation Award earned under the Performance Formula in the Performance
Period through the use of Negative Discretion. Unless otherwise provided in the
applicable Award Agreement or otherwise determined by the Committee, the
Committee shall not have the discretion to (A) grant or provide payment in
respect of Performance Compensation Awards for a Performance Period if the
Performance Goals for such Performance Period have not been attained or (B)
increase a Performance Compensation Award above the applicable limitations set
forth in Section 5 of the Plan.

 

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(f) Timing of Award Payments. Unless otherwise provided in the applicable Award
Agreement or otherwise determined by the Committee, Performance Compensation
Awards granted for a Performance Period shall be paid to Participants as soon as
administratively practicable following completion of the certifications required
by this Section 11. Any Performance Compensation Award that has been deferred
shall not (between the date as of which the Award is deferred and the payment
date) increase (i) with respect to a Performance Compensation Award that is
payable in cash, by a measuring factor for each fiscal year greater than a
reasonable rate of interest set by the Committee; or (ii) with respect to a
Performance Compensation Award that is payable in shares of Common Stock, by an
amount greater than the appreciation of a share of Common Stock from the date
such Award is deferred to the payment date. Any Performance Compensation Award
that is deferred and is otherwise payable in shares of Common Stock shall be
credited (during the period between the date as of which the Award is deferred
and the payment date) with dividend equivalents (in a manner consistent with the
methodology set forth in the last sentence of Section 9(d)(ii) of the Plan).

12. Changes in Capital Structure and Similar Events. Notwithstanding any other
provision in this Plan to the contrary, the following provisions shall apply to
all Awards granted hereunder (other than Other Cash-Based Awards):

(a) General. In the event of (i) any dividend (other than regular cash
dividends) or other distribution (whether in the form of cash, shares of Common
Stock, other securities or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, split-off,
spin-off, combination, repurchase or exchange of shares of Common Stock or other
securities of the Company, issuance of warrants or other rights to acquire
shares of Common Stock or other securities of the Company, or other similar
corporate transaction or event that affects the shares of Common Stock
(including a Change in Control); or (ii) unusual or nonrecurring events
affecting the Company, including changes in applicable rules, rulings,
regulations or other requirements, that the Committee determines, in its sole
discretion, could result in substantial dilution or enlargement of the rights
intended to be granted to, or available for, Participants (any event in (i) or
(ii), an “Adjustment Event”), the Committee shall, in respect of any such
Adjustment Event, make such proportionate substitution or adjustment, if any, as
it deems equitable, to any or all of (A) the Absolute Share Limit, or any other
limit applicable under the Plan with respect to the number of Awards which may
be granted hereunder; (B) the number of shares of Common Stock or other
securities of the Company (or number and kind of other securities or other
property) which may be issued in respect of Awards or with respect to which
Awards may be granted under the Plan or any Sub-Plan; and (C) the terms of any
outstanding Award, including, without limitation, (I) the number of shares of
Common Stock or other securities of the Company (or number and kind of other
securities or other property) subject to outstanding Awards or to which
outstanding Awards relate; (II) the Exercise Price or Strike Price with respect
to any Award; or (III) any applicable performance measures (including, without
limitation, Performance Criteria and Performance Goals); provided, that in the
case of any “equity restructuring” (within the meaning of the Financial
Accounting Standards Board Accounting Standards Codification Topic 718 (or any
successor pronouncement thereto)), the Committee shall make an equitable or
proportionate adjustment to outstanding Awards to reflect such equity
restructuring.

 

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(b) Adjustment Events. Without limiting the foregoing, except as may otherwise
be provided in an Award Agreement, in connection with any Adjustment Event, the
Committee may, in its sole discretion, provide for any one or more of the
following:

(i) substitution or assumption of Awards (or awards of an acquiring company),
acceleration of the vesting of, exercisability of, lapse of restrictions on, or
termination of, Awards, or establishment of a period of time (which shall not be
required to be more than ten (10) days) for Participants to exercise outstanding
Awards prior to the occurrence of such event (and any such Award not so
exercised shall terminate upon the occurrence of such event);

(ii) cancellation of any one or more outstanding Awards and payment to the
holders of such Awards that are vested as of such cancellation (including,
without limitation, any Awards that would vest as a result of the occurrence of
such event but for such cancellation or for which vesting is accelerated by the
Committee in connection with such event pursuant to clause (i) above), the value
of such Awards, if any, as determined by the Committee (which value, if
applicable, may be based upon the price per share of Common Stock received or to
be received by other stockholders of the Company in such event), including,
without limitation, in the case of an outstanding Option or SAR, a cash payment
in an amount equal to the excess, if any, of the Fair Market Value (as of a date
specified by the Committee) of the shares of Common Stock subject to such Option
or SAR over the aggregate Exercise Price or Strike Price of such Option or SAR
(it being understood that, in such event, any Option or SAR having a per share
Exercise Price or Strike Price equal to, or in excess of, the Fair Market Value
of a share of Common Stock subject thereto may be canceled and terminated
without any payment or consideration therefor), or, in the case of Restricted
Stock, Restricted Stock Units or Other Equity-Based Awards that are not vested
as of such cancellation, a cash payment or equity subject to deferred vesting
and delivery consistent with the vesting restrictions applicable to such
Restricted Stock, Restricted Stock Units or Other Equity-Based Awards prior to
cancellation, or the underlying shares in respect thereof; and

(iii) subject to any limitations or reductions as may be necessary to comply
with Section 409A of the Code, conversion or replacement of any Award that is
not vested as of the occurrence of such event into or with the right to receive
a payment, based on the value of the Award (as determined consistent with clause
(ii) above), which is subject to continued vesting on the same basis as the
vesting requirements applicable to such converted or replaced Award.

Payments to holders pursuant to clauses (ii) or (iii) above shall be made in
cash or, in the sole discretion of the Committee, in the form of such other
consideration necessary for a Participant to receive property, cash, or
securities (or combination thereof) as such Participant would have been entitled
to receive upon the occurrence of the transaction if the Participant had been,
immediately prior to such transaction, the holder of the number of shares of
Common Stock covered by the Award at such time (less any applicable Exercise
Price or Strike Price).

(c) Internal Reorganization. Notwithstanding anything to the contrary contained
herein, (i) no payments or benefits or acceleration of payments, benefits or
vesting will become

 

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payable or accelerated, as applicable, hereunder or under any Award Agreement or
be triggered for any purpose in the event of any internal reorganization
(whether by merger, consolidation, reorganization, combination, contribution,
distribution, asset transfer or otherwise) or restructuring involving the
Company or any of its Affiliates, including any such reorganization or
restructuring pursuant to a merger or other combination involving the Company in
which an Affiliate of the Company survives or succeeds as a publicly-traded
entity (including, without limitation, by virtue of a triangular merger
structure) and/or any such reorganization or restructuring undertaken in
connection with implementation of an umbrella partnership REIT or downREIT
structure (an “Internal Reorganization”), (ii) in connection with any Internal
Reorganization, the Committee shall have the authority to transfer and assign
the Plan and all related agreements, including Award Agreements, to a direct or
indirect subsidiary of the Company as part of such Internal Reorganization,
subject to compliance with applicable law, and (iii) if any Internal
Reorganization results in a transfer of a Participant’s service from the Company
to one of its direct or indirect subsidiaries, such a transfer shall not be
considered or interpreted as a termination of employment or separation from
service under any other similar provision that addresses an involuntary
termination of employment or service.

(d) Other Requirements. Prior to any payment or adjustment contemplated under
this Section 12, the Committee may require a Participant to (i) represent and
warrant as to the unencumbered title to the Participant’s Awards; (ii) bear such
Participant’s pro rata share of any post-closing indemnity obligations, and be
subject to the same post-closing purchase price adjustments, escrow terms,
offset rights, holdback terms, and similar conditions as the other holders of
Common Stock, subject to any limitations or reductions as may be necessary to
comply with Section 409A of the Code; and (iii) deliver customary transfer
documentation as reasonably determined by the Committee.

(e) Fractional Shares. Any adjustment provided under this Section 12 may provide
for the elimination of any fractional share that might otherwise become subject
to an Award.

(f) Binding Effect. Any adjustment, substitution, determination of value or
other action taken by the Committee under this Section 12 shall be conclusive
and binding for all purposes.

13. Amendments and Termination.

(a) Amendment and Termination of the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time; provided,
that no such amendment, alteration, suspension, discontinuance or termination
shall be made without stockholder approval if (i) such approval is necessary to
comply with any regulatory requirement applicable to the Plan (including,
without limitation, as necessary to comply with any rules or regulations of any
securities exchange or inter-dealer quotation system on which the securities of
the Company may be listed or quoted) or for changes in GAAP to new accounting
standards; (ii) it would materially increase the number of securities which may
be issued under the Plan (except for increases pursuant to Section 5 or 12 of
the Plan); or (iii) it would materially modify the requirements for
participation in the Plan; provided, further, that any such amendment,
alteration, suspension, discontinuance or termination that would materially and
adversely affect the rights of any Participant or any holder or beneficiary of
any

 

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Award theretofore granted shall not to that extent be effective without the
consent of the affected Participant, holder or beneficiary. Notwithstanding the
foregoing, no amendment shall be made to the last proviso of Section 13(b) of
the Plan without stockholder approval.

(b) Amendment of Award Agreements. The Committee may, to the extent consistent
with the terms of the Plan and any applicable Award Agreement, waive any
conditions or rights under, amend any terms of, or alter, suspend, discontinue,
cancel or terminate, any Award theretofore granted or the associated Award
Agreement, prospectively or retroactively (including after a Participant’s
Termination); provided, that, other than pursuant to Section 12, any such
waiver, amendment, alteration, suspension, discontinuance, cancellation or
termination that would materially and adversely affect the rights of any
Participant with respect to any Award theretofore granted shall not to that
extent be effective without the consent of the affected Participant; provided,
further, that in no event shall any such amendment alter the Minimum Vesting
Condition.

(c) No Repricing. Notwithstanding anything in the Plan to the contrary, without
stockholder approval, except as otherwise permitted under Section 12 of the
Plan, (i) no amendment or modification may reduce the Exercise Price of any
Option or the Strike Price of any SAR; (ii) the Committee may not cancel any
outstanding Option or SAR and replace it with a new Option or SAR (with a lower
Exercise Price or Strike Price, as the case may be) or other Award or cash
payment that is greater than the intrinsic value (if any) of the cancelled
Option or SAR; and (iii) the Committee may not take any other action which is
considered a “repricing” for purposes of the stockholder approval rules of any
securities exchange or inter-dealer quotation system on which the securities of
the Company are listed or quoted.

14. General.

(a) Award Agreements. Each Award (other than an Other Cash-Based Award) under
the Plan shall be evidenced by an Award Agreement, which shall be delivered to
the Participant to whom such Award was granted and shall specify the terms and
conditions of the Award and any rules applicable thereto, including, without
limitation, the effect on such Award of the death, Disability or Termination of
a Participant, or of such other events as may be determined by the Committee.
For purposes of the Plan, an Award Agreement may be in any such form (written or
electronic) as determined by the Committee (including, without limitation, a
Board or Committee resolution, an employment agreement, a notice, a certificate
or a letter) evidencing the Award. The Committee need not require an Award
Agreement to be signed by the Participant or a duly authorized representative of
the Company or a Subsidiary.

(b) Nontransferability. Each Award shall be exercisable only by such Participant
to whom such Award was granted during the Participant’s lifetime, or, if
permissible under applicable law, by the Participant’s legal guardian or
representative. No Award may be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by a Participant (unless such transfer is
specifically required pursuant to a domestic relations order or by applicable
law) other than by will or by the laws of descent and distribution and any such
purported assignment, alienation, pledge, attachment, sale, transfer or
encumbrance shall be void and unenforceable against any member of the Company
Group; provided, that the designation of a beneficiary shall not constitute an
assignment, alienation, pledge, attachment, sale, transfer or encumbrance.

 

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(c) Dividends and Dividend Equivalents. The Committee may, in its sole
discretion, provide a Participant as part of an Award with dividends, dividend
equivalents, or similar payments in respect of Awards, payable in cash, shares
of Common Stock, other securities, other Awards or other property, on a current
or deferred basis, on such terms and conditions as may be determined by the
Committee in its sole discretion, including, without limitation, payment
directly to the Participant, withholding of such amounts by the Company subject
to vesting of the Award or reinvestment in additional shares of Common Stock,
Restricted Stock or other Awards; provided, that no dividends, dividend
equivalents or other similar payments shall be payable in respect of outstanding
(i) Options or SARs; or (ii) unearned Performance Compensation Awards or other
unearned Awards subject to performance conditions (other than, or in addition
to, the passage of time) (although dividends, dividend equivalents or other
similar payments may be accumulated in respect of unearned Awards and paid
within fifteen (15) days after such Awards are earned and become payable or
distributable).

(d) Tax Withholding.

(i) A Participant shall be required to pay to the Company or one or more of its
Subsidiaries, as applicable, an amount in cash (by check or wire transfer) equal
to the aggregate amount of any income, employment and/or other applicable taxes
that are statutorily required to be withheld in respect of an Award.
Alternatively, the Company or any of its Subsidiaries may elect, in its sole
discretion, to satisfy this requirement by withholding such amount from any cash
compensation or other cash amounts owing to a Participant.

(ii) Without limiting the foregoing, the Committee may (but is not obligated
to), in its sole discretion, permit or require a Participant to satisfy, all or
any portion of the minimum income, employment and/or other applicable taxes that
are statutorily required to be withheld with respect to an Award by (A) the
delivery of shares of Common Stock (which are not subject to any pledge or other
security interest) that have been both held by the Participant and vested for
any period of time as established from time to time by the Committee in order to
avoid adverse accounting treatment under GAAP) having an aggregate Fair Market
Value equal to such minimum statutorily required withholding liability (or
portion thereof); or (B) having the Company withhold from the shares of Common
Stock otherwise issuable or deliverable to, or that would otherwise be retained
by, the Participant upon the grant, exercise, vesting or settlement of the
Award, as applicable, a number of shares of Common Stock with an aggregate Fair
Market Value equal to an amount, subject to clause (iii) below, not in excess of
such minimum statutorily required withholding liability (or portion thereof).

(iii) The Committee, subject to its having considered the applicable accounting
impact of any such determination, has full discretion to allow Participants to
satisfy, in whole or in part, any additional income, employment and/or other
applicable taxes payable by them with respect to an Award by electing to have
the Company withhold from the shares of Common Stock otherwise issuable or
deliverable to, or that would

 

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otherwise be retained by, a Participant upon the grant, exercise, vesting or
settlement of the Award, as applicable, shares of Common Stock having an
aggregate Fair Market Value that is greater than the applicable minimum required
statutory withholding liability (but such withholding may in no event be in
excess of the maximum statutory withholding amount(s) in a Participant’s
relevant tax jurisdictions).

(e) Data Protection. By participating in the Plan or accepting any rights
granted under it, each Participant consents to the collection and processing of
personal data relating to the Participant so that the Company and its Affiliates
can fulfill their obligations and exercise their rights under the Plan and
generally administer and manage the Plan. This data will include, but may not be
limited to, data about participation in the Plan and shares offered or received,
purchased, or sold under the Plan from time to time and other appropriate
financial and other data (such as the date on which the Awards were granted)
about the Participant and the Participant’s participation in the Plan.

(f) No Claim to Awards; No Rights to Continued Employment; Waiver. No employee
of any member of the Company Group, or other Person, shall have any claim or
right to be granted an Award under the Plan or, having been selected for the
grant of an Award, to be selected for a grant of any other Award. There is no
obligation for uniformity of treatment of Participants or holders or
beneficiaries of Awards. The terms and conditions of Awards and the Committee’s
determinations and interpretations with respect thereto need not be the same
with respect to each Participant and may be made selectively among Participants,
whether or not such Participants are similarly situated. Neither the Plan nor
any action taken hereunder shall be construed as giving any Participant any
right to be retained in the employ or service of the Service Recipient or any
other member of the Company Group, nor shall it be construed as giving any
Participant any rights to continued service on the Board. The Service Recipient
or any other member of the Company Group may at any time dismiss a Participant
from employment or discontinue any consulting relationship, free from any
liability or any claim under the Plan, unless otherwise expressly provided in
the Plan or any Award Agreement. By accepting an Award under the Plan, a
Participant shall thereby be deemed to have waived any claim to continued
exercise or vesting of an Award or to damages or severance entitlement related
to non-continuation of the Award beyond the period provided under the Plan or
any Award Agreement, except to the extent of any provision to the contrary in
any written employment contract or other agreement between the Service Recipient
and/or any member of the Company Group and the Participant, whether any such
agreement is executed before, on or after the Date of Grant.

(g) International Participants. With respect to Participants who reside or work
outside of the United States of America and who are not (and who are not
expected to be) “covered employees” within the meaning of Section 162(m) of the
Code, the Committee may, in its sole discretion, amend the terms of the Plan and
create or amend Sub-Plans or amend outstanding Awards with respect to such
Participants in order to conform such terms with the requirements of local law
or to obtain more favorable tax or other treatment for a Participant or any
member of the Company Group.

(h) Designation and Change of Beneficiary. Each Participant may file with the
Committee a written designation of one or more Persons as the beneficiary(ies)
who shall be

 

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entitled to receive the amounts payable with respect to an Award, if any, due
under the Plan upon the Participant’s death. A Participant may, from time to
time, revoke or change the Participant’s beneficiary designation without the
consent of any prior beneficiary by filing a new designation with the Committee.
The last such designation received by the Committee shall be controlling;
provided, however, that no designation, or change or revocation thereof, shall
be effective unless received by the Committee prior to the Participant’s death,
and in no event shall it be effective as of a date prior to such receipt. If no
beneficiary designation is filed by a Participant, the beneficiary shall be
deemed to be the Participant’s spouse or, if the Participant is unmarried at the
time of death, the Participant’s estate.

(i) Termination. Except as otherwise provided in an Award Agreement, unless
determined otherwise by the Committee at any point following such event: (i)
neither a temporary absence from employment or service due to illness, vacation
or leave of absence (including, without limitation, a call to active duty for
military service through a Reserve or National Guard unit) nor a transfer from
employment or service with one Service Recipient to employment or service with
another Service Recipient (or vice-versa) shall be considered a Termination; and
(ii) if a Participant undergoes a Termination of employment, but such
Participant continues to provide services to the Company Group in a non-employee
capacity, such change in status shall not be considered a Termination for
purposes of the Plan. Further, unless otherwise determined by the Committee, in
the event that any Service Recipient ceases to be a member of the Company Group
(by reason of sale, divestiture, spin-off or other similar transaction), unless
a Participant’s employment or service is transferred to another entity that
would constitute a Service Recipient immediately following such transaction,
such Participant shall be deemed to have suffered a Termination hereunder as of
the date of the consummation of such transaction.

(j) No Rights as a Stockholder. Except as otherwise specifically provided in the
Plan or any Award Agreement, no Person shall be entitled to the privileges of
ownership in respect of shares of Common Stock which are subject to Awards
hereunder until such shares have been issued or delivered to such Person.

(k) Government and Other Regulations.

(i) The obligation of the Company to settle Awards in shares of Common Stock or
other consideration shall be subject to all applicable laws, rules, and
regulations, and to such approvals by governmental agencies as may be required.
Notwithstanding any terms or conditions of any Award to the contrary, the
Company shall be under no obligation to offer to sell or to sell, and shall be
prohibited from offering to sell or selling, any shares of Common Stock pursuant
to an Award unless such shares have been properly registered for sale pursuant
to the Securities Act with the Securities and Exchange Commission or unless the
Company has received an opinion of counsel (if the Company has requested such an
opinion), satisfactory to the Company, that such shares may be offered or sold
without such registration pursuant to an available exemption therefrom and the
terms and conditions of such exemption have been fully complied with. The
Company shall be under no obligation to register for sale under the Securities
Act any of the shares of Common Stock to be offered or sold under the Plan. The
Committee shall have the authority to provide that all shares of Common Stock or
other securities of

 

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any member of the Company Group issued under the Plan shall be subject to such
stop transfer orders and other restrictions as the Committee may deem advisable
under the Plan, the applicable Award Agreement, the Federal securities laws, or
the rules, regulations and other requirements of the Securities and Exchange
Commission, any securities exchange or inter-dealer quotation system on which
the securities of the Company are listed or quoted and any other applicable
Federal, state, local or non-U.S. laws, rules, regulations and other
requirements, and, without limiting the generality of Section 9 of the Plan, the
Committee may cause a legend or legends to be put on certificates representing
shares of Common Stock or other securities of any member of the Company Group
issued under the Plan to make appropriate reference to such restrictions or may
cause such Common Stock or other securities of any member of the Company Group
issued under the Plan in book-entry form to be held subject to the Company’s
instructions or subject to appropriate stop-transfer orders. Notwithstanding any
provision in the Plan to the contrary, the Committee reserves the right to add
any additional terms or provisions to any Award granted under the Plan that the
Committee, in its sole discretion, deems necessary or advisable in order that
such Award complies with the legal requirements of any governmental entity to
whose jurisdiction the Award is subject.

(ii) The Committee may cancel an Award or any portion thereof if it determines,
in its sole discretion, that legal or contractual restrictions and/or blockage
and/or other market considerations would make the Company’s acquisition of
shares of Common Stock from the public markets, the Company’s issuance of Common
Stock to the Participant, the Participant’s acquisition of Common Stock from the
Company and/or the Participant’s sale of Common Stock to the public markets,
illegal, impracticable or inadvisable. If the Committee determines to cancel all
or any portion of an Award in accordance with the foregoing, the Company shall,
subject to any limitations or reductions as may be necessary to comply with
Section 409A of the Code, (A) pay to the Participant an amount equal to the
excess of (I) the aggregate Fair Market Value of the shares of Common Stock
subject to such Award or portion thereof canceled (determined as of the
applicable exercise date, or the date that the shares would have been vested or
issued, as applicable); over (II) the aggregate Exercise Price or Strike Price
(in the case of an Option or SAR, respectively) or any amount payable as a
condition of issuance of shares of Common Stock (in the case of any other
Award). Such amount shall be delivered to the Participant as soon as practicable
following the cancellation of such Award or portion thereof, or (B) in the case
of Restricted Stock, Restricted Stock Units or Other Equity-Based Awards,
provide the Participant with a cash payment or equity subject to deferred
vesting and delivery consistent with the vesting restrictions applicable to such
Restricted Stock, Restricted Stock Units or Other Equity-Based Awards, or the
underlying shares in respect thereof.

(l) No Section 83(b) Elections Without Consent of Company. No election under
Section 83(b) of the Code or under a similar provision of law may be made unless
expressly permitted by the terms of the applicable Award Agreement or by action
of the Committee in writing prior to the making of such election. If a
Participant, in connection with the acquisition of shares of Common Stock under
the Plan or otherwise, is expressly permitted to make such election and the
Participant makes the election, the Participant shall notify the Company of such

 

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election within ten (10) days of filing notice of the election with the Internal
Revenue Service or other governmental authority, in addition to any filing and
notification required pursuant to Section 83(b) of the Code or other applicable
provision.

(m) Payments to Persons Other Than Participants. If the Committee shall find
that any Person to whom any amount is payable under the Plan is unable to care
for the Participant’s affairs because of illness or accident, or is a minor, or
has died, then any payment due to such Person or the Participant’s estate
(unless a prior claim therefor has been made by a duly appointed legal
representative) may, if the Committee so directs the Company, be paid to the
Participant’s spouse, child, relative, an institution maintaining or having
custody of such Person, or any other Person deemed by the Committee to be a
proper recipient on behalf of such Person otherwise entitled to payment. Any
such payment shall be a complete discharge of the liability of the Committee and
the Company therefor.

(n) Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board
nor the submission of the Plan to the stockholders of the Company for approval
shall be construed as creating any limitations on the power of the Board to
adopt such other incentive arrangements as it may deem desirable, including,
without limitation, the granting of equity-based awards otherwise than under the
Plan, and such arrangements may be either applicable generally or only in
specific cases.

(o) No Trust or Fund Created. Neither the Plan nor any Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary
relationship between any member of the Company Group, on the one hand, and a
Participant or other Person, on the other hand. No provision of the Plan or any
Award shall require the Company, for the purpose of satisfying any obligations
under the Plan, to purchase assets or place any assets in a trust or other
entity to which contributions are made or otherwise to segregate any assets, nor
shall the Company be obligated to maintain separate bank accounts, books,
records or other evidence of the existence of a segregated or separately
maintained or administered fund for such purposes. Participants shall have no
rights under the Plan other than as unsecured general creditors of the Company,
except that insofar as they may have become entitled to payment of additional
compensation by performance of services, they shall have the same rights as
other service providers under general law.

(p) Reliance on Reports. Each member of the Committee and each member of the
Board shall be fully justified in acting or failing to act, as the case may be,
and shall not be liable for having so acted or failed to act in good faith, in
reliance upon any report made by the independent public accountant of any member
of the Company Group and/or any other information furnished in connection with
the Plan by any agent of the Company or the Committee or the Board, other than
himself or herself.

(q) Relationship to Other Benefits. No payment under the Plan shall be taken
into account in determining any benefits under any pension, retirement, profit
sharing, group insurance or other benefit plan of the Company except as
otherwise specifically provided in such other plan or as required by applicable
law.

 

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(r) Governing Law. The Plan shall be governed by and construed in accordance
with the internal laws of the State of Delaware applicable to contracts made and
performed wholly within the State of Delaware, without giving effect to the
conflict of laws provisions thereof. EACH PARTICIPANT WHO ACCEPTS AN AWARD
IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY SUIT, ACTION, OR OTHER
PROCEEDING INSTITUTED BY OR AGAINST SUCH PARTICIPANT IN RESPECT OF THE
PARTICIPANT’S RIGHTS OR OBLIGATIONS HEREUNDER.

(s) Severability. If any provision of the Plan or any Award or Award Agreement
is or becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or Award, or would disqualify the Plan or any
Award under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to the applicable laws, or if it cannot
be construed or deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan or the Award, such provision shall be
construed or deemed stricken as to such jurisdiction, Person or Award and the
remainder of the Plan and any such Award shall remain in full force and effect.

(t) Obligations Binding on Successors. The obligations of the Company under the
Plan shall be binding upon any successor corporation or organization resulting
from the merger, consolidation or other reorganization of the Company, or upon
any successor corporation or organization succeeding to substantially all of the
assets and business of the Company (or as otherwise contemplated in connection
with any Internal Reorganization).

(u) Section 409A of the Code.

(i) Notwithstanding any provision of the Plan to the contrary, it is intended
that the provisions of the Plan comply with Section 409A of the Code, and all
provisions of the Plan shall be construed and interpreted in a manner consistent
with the requirements for avoiding taxes or penalties under Section 409A of the
Code. Each Participant is solely responsible and liable for the satisfaction of
all taxes and penalties that may be imposed on or in respect of such Participant
in connection with the Plan (including any taxes and penalties under Section
409A of the Code), and neither the Service Recipient nor any other member of the
Company Group shall have any obligation to indemnify or otherwise hold such
Participant (or any beneficiary) harmless from any or all of such taxes or
penalties. With respect to any Award that is considered “deferred compensation”
subject to Section 409A of the Code, references in the Plan to “termination of
employment” (and substantially similar phrases) shall mean “separation from
service” within the meaning of Section 409A of the Code. For purposes of Section
409A of the Code, each of the payments that may be made in respect of any Award
granted under the Plan is designated as separate payments.

(ii) Notwithstanding anything in the Plan to the contrary, if a Participant is a
“specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code,
no payments in respect of any Awards that are “deferred compensation” subject to
Section 409A of the Code and which would otherwise be payable upon the
Participant’s “separation from service” (as defined in Section 409A of the Code)
shall be made to such Participant prior to the date that is six (6) months after
the date of such Participant’s

 

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“separation from service” or, if earlier, the date of the Participant’s death.
Following any applicable six (6) month delay, all such delayed payments will be
paid in a single lump sum on the earliest date permitted under Section 409A of
the Code that is also a business day.

(iii) Unless otherwise provided by the Committee in an Award Agreement or
otherwise, in the event that the timing of payments in respect of any Award
(that would otherwise be considered “deferred compensation” subject to Section
409A of the Code) would be accelerated upon the occurrence of (A) a Change in
Control, no such acceleration shall be permitted unless the event giving rise to
the Change in Control satisfies the definition of a change in the ownership or
effective control of a corporation, or a change in the ownership of a
substantial portion of the assets of a corporation pursuant to Section 409A of
the Code; or (B) a Disability, no such acceleration shall be permitted unless
the Disability also satisfies the definition of “Disability” pursuant to Section
409A of the Code.

(v) Clawback/Repayment. All Awards shall be subject to reduction, cancellation,
forfeiture or recoupment to the extent necessary to comply with (i) any
clawback, forfeiture or other similar policy adopted by the Board or the
Committee and as in effect from time to time; and (ii) applicable law. Further,
to the extent that the Participant receives any amount in excess of the amount
that the Participant should otherwise have received under the terms of the Award
for any reason (including, without limitation, by reason of a financial
restatement, mistake in calculations or other administrative error), the
Participant shall be required to repay any such excess amount to the Company.

(w) Detrimental Activity. Notwithstanding anything to the contrary contained
herein, if a Participant has engaged in any Detrimental Activity, as determined
by the Committee, the Committee may, in its sole discretion, provide for one or
more of the following:

(i) cancellation of any or all of such Participant’s outstanding Awards; or

(ii) forfeiture by the Participant of any gain realized on the vesting or
exercise of Awards, and to repay any such gain promptly to the Company.

(x) Right of Offset. The Company will have the right to offset against its
obligation to deliver shares of Common Stock (or other property or cash) under
the Plan or any Award Agreement any outstanding amounts (including, without
limitation, travel and entertainment or advance account balances, loans,
repayment obligations under any Awards, or amounts repayable to the Company
pursuant to tax equalization, housing, automobile or other employee programs)
that the Participant then owes to any member of the Company Group and any
amounts the Committee otherwise deems appropriate pursuant to any tax
equalization policy or agreement. Notwithstanding the foregoing, if an Award is
“deferred compensation” subject to Section 409A of the Code, the Committee will
have no right to offset against its obligation to deliver shares of Common Stock
(or other property or cash) under the Plan or any Award Agreement if such offset
could subject the Participant to the additional tax imposed under Section 409A
of the Code in respect of an outstanding Award.

 

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(y) Expenses; Titles and Headings. The expenses of administering the Plan shall
be borne by the Company Group. The titles and headings of the sections in the
Plan are for convenience of reference only, and in the event of any conflict,
the text of the Plan, rather than such titles or headings, shall control.

 

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