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


 


1





















 


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.


 


2





















 


(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.


 


3





















 


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]


 


4





















 


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.


 


5