Exhibit 10.12.2

 

HILTON HOTELS CORPORATION
2004 OMNIBUS EQUITY COMPENSATION PLAN
PERFORMANCE UNIT GRANT

 

This PERFORMANCE UNIT GRANT (the “Agreement”), dated as of <date of grant> (the
“Date of Grant”), is delivered by Hilton Hotels Corporation (“Hilton”) to
<name>.

 

RECITALS

 

The Hilton Hotels Corporation 2004 Omnibus Equity Compensation Plan (the “Plan”)
provides for the grant of performance units (“Performance Units”) that relate to
shares of Hilton common stock.  Pursuant to the terms of the Plan, the
Compensation Committee of Hilton’s Board of Directors (the “Committee”) has
decided to grant you Performance Units.

 

NOW, THEREFORE, the parties to this Agreement, intending to be legally bound
hereby, agree as follows:

 

1.                                       Grant of Performance Units.  Subject to
the terms and conditions set forth in this Agreement and in the Plan, Hilton
hereby grants to you <#units> Performance Units.  The Performance Units are
contingently awarded and will be earned and distributable if and to the extent
that the performance goals and other conditions set forth in this Agreement are
met.  Hilton will record the number of Performance Units credited on your behalf
in an Account (as defined below).  The number of Performance Units set forth
above is equal to the target number of shares of Stock that you will earn for
100% achievement of the Performance Goals described in Section 2 below (the
“Target Award”).

 

2.                                       Performance Goals.

 

(a)                                  The distribution of shares of Stock
attributable to your Performance Units is contingent upon achievement of the
performance goal(s) described in the attached Exhibit A for the Performance
Period (as defined below) and your continuing to be employed by, or providing
service to, the Company (as defined below) through the last day of the
Performance Period.

 

(b)                                 The Committee may, but only to the extent
consistent with the requirements of section 162(m) of the Internal Revenue Code
permitting a federal income tax deduction for Performance Unit grants designated
as “qualified performance-based compensation,” at any time prior to the end of
the Performance Period, change the performance measures or the performance goals
to reflect a change in the corporate structure or shares of Hilton or a
comparison group member company, or any other change of a significant nature
that affects the applicability for comparison between Hilton and a comparison
group used in measuring performance.

 

(c)                                  At the end of the Performance Period, the
Committee will determine whether and to what extent the performance goals have
been met and the number of Performance Units you have earned, if any.  Except as
described in Section 3 below, you must be employed by, or

 

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providing service to, the Company on the last day of the Performance Period in
order to earn your Performance Units, unless the Committee determines otherwise.

 

3.                                       Termination of Employment or Service or
Transfer.

 

(a)                      If, at least one year after the beginning of the
Performance Period but prior to the end, you cease to be employed by, or provide
service to, the Company on account of your Retirement (as defined below),
Disability (as defined below) or death, you will earn a pro-rata portion of your
Performance Units, if the performance goals and the requirements of this
Agreement are met as of the last day of the Performance Period.  The prorated
portion will be determined as the number of Performance Units that would have
been earned if you had remained employed through the last day of the Performance
Period multiplied by a fraction, the numerator of which is the number of days
that you were actively employed by, or provided services to, the Company during
the Performance Period and the denominator of which is the number of days in the
Performance Period.  If you cease to be employed by, or provide service to, the
Company on account of Retirement, Disability or death, the prorated number of
Performance Units will be distributed in accordance with Section 4.

 

(b)                     If your business unit is transferred out of the Company,
or as a result of a sale or transfer of assets and, as a consequence, you cease
to be employed by or provide service to the Company, the Committee may take such
action with respect to your Performance Units as the Committee determines.

 

4.                                       Time and Form of Payment with Respect
to Performance Units.  You will receive a distribution with respect to your
Performance Units (to the extent earned) after the end of the Performance Period
but no later than the March 31 following the end of the Performance Period, in
shares of Stock.

 

5.                                       Withholding.  Unless the Committee
provides otherwise, the number of shares of Stock distributed to you will be
reduced by a number of shares sufficient to satisfy the amount of any
withholding tax associated with the distribution.

 

6.                                       Change of Control.  The provisions of
the Plan applicable to a Change of Control (as defined in the Plan) will apply
to your Performance Units, and, in the event of a Change of Control, the
Committee may take such actions as it deems appropriate pursuant to the Plan.

 

7.                                       Definitions.  For purposes of this
Agreement, the following terms will have the meanings set forth below:

 

(a)                      “Account” means a bookkeeping account established on
Hilton’s records in your name to record grants of Performance Units.

 

(b)                     “Company” means Hilton, any successor corporation and
each corporation which is a member of a controlled group of corporations of
which Hilton is a component member.

 

(c)                      “Disabled” or “Disability” means that you are
considered totally and permanently disabled for purposes of the Company’s
long-term disability plan.

 

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(d)                     “Employed by, or provide service to, the Company” means
employment or service with the Company.

 

(e)                      “Performance Period” means the three-year period
beginning on December 31, <year> and ending December 31, <year >.

 

(f)                        “Performance Unit” means a phantom unit representing
a share of Stock.

 

(g)                     “Retirement” means retirement from active employment or
service with the Company at or after age 62.

 

(h)                     “Stock” means a share of Hilton common stock.

 

8.                                       Grant Subject to Plan Provisions.  This
grant is made pursuant to the Plan, the terms of which are incorporated herein
by reference, and in all respects shall be interpreted in accordance with the
Plan.  The grant and distribution of Performance Units are subject to
interpretations, regulations and determinations concerning the Plan established
from time to time by the Committee in accordance with the provisions of the
Plan, including, but not limited to, provisions pertaining to (a) the
registration, qualification or listing of the shares issued under the Plan, (b)
changes in capitalization, and (c) other requirements of applicable law and all
Plan provisions.  The Committee has the authority to interpret and construe this
Agreement pursuant to the terms of the Plan, and its decisions are conclusive as
to any questions arising hereunder.

 

9.                                       No Employment or Other Rights.  The
grant of Performance Units does not confer upon you any right to be retained by,
or in the employ or service of, the Company and will not interfere in any way
with the right of the Company to terminate your employment or service at any
time.  The right of the Company to terminate your employment or service at will
at any time for any reason is specifically reserved.  You will not have any
interest in any fund or specific assets of the Company by reason of this grant
or the Account established on your behalf.

 

10.                                 No Stockholder Rights.  Neither you, nor any
person entitled to receive distribution in the event of your death, will have
any of the rights and privileges of a Hilton stockholder with respect to a share
of Stock, until that share of Stock has been issued.

 

11.                                 Assignment and Transfers.  Your rights and
interests under this Agreement may not be sold, assigned, encumbered or
otherwise transferred except, in the event of your death, by will or by the laws
of descent and distribution.  If you die, any distributions to be made under
this Agreement after your death will be paid to the personal representative of
your estate, or the personal representative under applicable law if you die
intestate.  The rights, protections and obligations of the Company hereunder
extend to any successors or assigns of the Company and to the Company’s parents,
subsidiaries, and affiliates.  This Agreement may be assigned by the Company
without your consent.

 

12.                                 Applicable Law.  The validity, construction,
interpretation and effect of this instrument will be governed by and construed
in accordance with the laws of the State of California, without giving effect to
the conflicts of laws provisions thereof.

 

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13.                                 Notice.  Any notice to Hilton provided for
in this Agreement shall be addressed to Hilton Hotels Corporation in care of the
Corporate Secretary at 9336 Civic Center Drive, Beverly Hills, California,
90210, and any notice to you will be addressed to you at the current address
shown on the Company’s payroll, or to such other address as you may designate to
the Company in writing.  Any notice shall be delivered by hand, sent by telecopy
or enclosed in a properly sealed envelope addressed as stated above, and
deposited, postage prepaid, in a post office regularly maintained by the United
States Postal Service.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, Hilton has caused its duly authorized officers to execute
and attest to this Agreement, and you have executed this Agreement, effective as
of the Date of Grant.

 

 

HILTON HOTELS CORPORATION

Attest

 

 

 

 

 

 

 

By:

 

 

Corporate Secretary

Title: Senior Vice President, Human Resources

 

 

I hereby accept the Performance Units described in this Agreement, and I agree
to be bound by the terms of the Plan and this Agreement.  I hereby further agree
that all the decisions and determinations of the Committee will be final and
binding.

 

 

 

Participant

 

 

If you do not sign and return this Agreement to us by <date>, or if you do not
notify us (in accordance with Section 13) that you do not wish to accept the
Performance Units described in this Agreement, then you will be deemed to have
accepted the Performance Units described in this Agreement and to have agreed to
be bound by the terms of the Plan and this Agreement.

 

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